Appropriations for Fiscal Year 2008

Click here for information on the Administration’s budget proposal for FY 2009.

All bills and accompanying reports related to FY 2008 appropriations are available at https://thomas.loc.gov/home/approp/app08.html.

Congress imposes conditions on RD office closings (reprinted from HAC News, 1/16/08). The omnibus appropriations act for FY 2008 prohibits closing RD offices until the impact on cost and program delivery is determined, and requires reporting the justification for any closure or relocation to Congress at least 60 days in advance reporting the possibility of some office closures. Visit https://thomas.loc.gov/home/approp/app08.html to access the omnibus act; a joint statement by the appropriations committees expressing concern about office closures was printed in the December 17, 2007 Congressional Record, pp. H15761-62.

Farmworker housing added to rental preservation program for FY 2008 (reprinted from HAC News, 1/16/08). The FY 2008 omnibus appropriations act makes Section 514/516 properties eligible for RD’s Multi-Family Housing Preservation and Revitalization Restructuring Program. In FY 2006 and 2007, RD has offered these “MPR” funds through a NOFA published in the spring. The omnibus act is available at https://thomas.loc.gov/home/approp/app08.html.

President signs omnibus appropriation for 2008. On December 26, President Bush signed the omnibus spending bill for 2008. This means USDA and HUD housing programs will be funded through September 30, 2008 at the amounts shown in the last columns in the tables below.

Dec. 20: After votes on December 17, 18, and 19, the House of Representatives and the Senate had passed an omnibus appropriations bill that would fund most of the federal government, including USDA and HUD, for fiscal 2008. The two houses initially adopted different dollar figures for war funding, but came to an agreement by the end of the day on December 19 and sent the omnibus bill to President Bush for signature.

The omnibus bill cuts some programs, but protects most, in order to reach a total budget ceiling sought by President Bush. The omnibus is H.R. 2764 and is technically a very large amendment to the House Foreign Operations spending bill for 2008. The bill groups together 11 appropriations bills for the 2008 fiscal year that began on October 1. The White House had been threatening a veto of any bill that exceeds the President’s budget request for 2008. The text of the bill is available at https://www.rules.house.gov/110_fy08_omni.htm.

Continuing Resolutions. On December 19, the House and Senate both passed a Fourth Continuing Resolution that would extend funding at FY 2007 levels from December 21, when the Third CR expires, to December 31.

Nov. 14, 2007 — On November 13, 2007, President Bush signed into law the second Continuing Resolution passed by Congress for fiscal year 2008, which began on October 1, 2007. This new stopgap measure funds the government through December 14, keeping most programs at FY 2007 levels. It does provide $3 million in new Community Development Block Grant funds for Louisiana’s Road Home program for survivors of Hurricanes Katrina and Rita.

Sept. 14, 2007 — With the 2008 fiscal year beginning on Oct. 1, USDA, HUD and all other federal programs are operating under a continuing resolution through Nov. 16. President Bush signed the CR on Sept. 29. Congress has yet to complete and send to the President any of the 12 appropriations bills. The White House has threatened a veto of any bill that exceeds the President’s budget request for 2008. It is unclear whether Congress may send separate spending bills, a large omnibus package, or some combination of both approaches. Final negotiations will likely go beyond Nov. 16.

USDA. In the near-final omnibus bill, some USDA rural housing programs are cut while others are at higher levels than in 2007. Sec. 502 guaranteed loans would rise sharply to $4.22 billion, with Congress urging this program’s use as an alternative to subprime mortgages. Sec. 523 self-help housing would increase to $39 million. But Sec. 515 rental loans, rental assistance and farm labor housing loans and grants would be cut. Like the House and Senate bills passed earlier this year, the omnibus bill rejects the very deep budget cuts for rural housing programs that were proposed in the Administration’s 2008 budget. That February 2007 proposal had called for the elimination of Section 502 and 515 direct loans and a drastic cut in self-help housing.

The table below has details.

a. Figures shown for FY 2006 are before 1% across the board cut.
b. Rental Assistance contracts were for four years in FY 2006 and for two years in FY 2007. The FY 2008 bill provides one-year contracts

HUD. Also part of the omnibus is the 2008 Transportation-HUD appropriations bill. It cuts Community Development Block Grants, HOME and Section 8 vouchers below the levels in both House and Senate spending bills passed earlier this year. Most other HUD programs retained the funding levels of 2007 or the increases won in Congress earlier this year for 2008. The HUD rural housing program would receive $17 million, the same as in 2007. The SHOP program would rise from 19.8 million in 2007 to $26.5 million in 2008.

a. Figures shown for FY 2006 and 2007 are before 1% across the board cut.
b. $200 million in counseling and foreclosure prevention activities is provided to the Neighborhood Reinvestment Corporation.
c. Housing counseling funding is under the HOME program.
d. Foreclosure prevention activities moved to appropriation for Neighborhood Reinvestment (not in HUD).

Updated: Jan. 22, 2008

If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

Administration Proposes Eliminating Many Rural Housing Programs

If the Bush Administration’s budget for fiscal year 2008 proposed winds of change for rural housing, the FY 2009 budget proposes a hurricane. As it did last year, the Administration proposes no funding for the major direct housing loan programs of the U.S. Department of Agriculture (USDA) – Section 502 direct for homebuyers and Section 515 for organizations developing rental housing – as well as USDA’s Rural Community Development Initiative and theRural Housing and Economic Development program at the U.S. Department of Housing and Urban Development (HUD). This year zeroes are also suggested for Section 523 support for community organizations that run self-help “sweat equity” programs, rental housing preservation efforts, and Section 514/516 farmworker housing loans and grants.

The Administration’s proposed budget for fiscal year 2009 was released on February 4, 2008. Congress will consider the Administration’s budget as it decides appropriations for FY 2009 (which begins October 1, 2008), but is not bound by the budget.

Complete budget documents are available at https://www.gpoaccess.gov/usbudget/ or https://www.budget.gov.
A PDF version of the following budget summary is available here.

More about USDA rural housing in the FY 2009 budget
More about HUD in the FY 2009 budget

USDA: One Big Number and Many Zeroes

Rental Assistance and Vouchers

The budget does propose a very large increase in the Section 521 Rental Assistance (RA) program, from $482.1 million in 2008 to $997 million in 2009. This increase is needed because RA contract lengths were shortened over the last several years, thus reducing the appropriations needed each year from 2004 to 2008. In FY 2004 Congress’s appropriation cut contracts to four years instead of the previous five years. In FY 2007, contracts were shortened further, most to two years and some to one year. All RA contracts issued in FY 2008 will be for one year. This means that in FY 2009 the contracts issued in 2005, 2007, and 2008 will need to be renewed. RD estimates that in 2009 about 230,000 of the 280,000 existing contracts will need to be renewed at a total cost of close to $1 billion.

The Rental Assistance request contains two innovations. First, the Administration proposes to use $100 million of the $997 million for a “pilot voucher program” for RA-eligible tenants. Few details are given, but it appears these vouchers would replace RA for some tenants in Section 515 properties. Unlike RA, which is project-based and remains with a property when a tenant moves out, each voucher would be tenant-based and would move with the tenant.

It seems these vouchers would be unlike the vouchers issued by USDA since 2006 for tenants who live in properties where Section 515 mortgages have been prepaid. RA is available only where a Section 515 loan exists, so tenants in a prepaid property lose their RA and receive vouchers to help them afford the rents in non-Section 515 properties, whether they remain in the prepaid property or move elsewhere. In contrast, the new vouchers would replace RA in properties that remain in the Section 515 program.

The budget’s second new rural housing proposal would require every tenant receiving RA or a voucher to pay a minimum rent of $50 per month.

Direct and Guaranteed Lending

The budget would eliminate or reduce all of USDA’s direct lending programs, and would instead emphasize loan guarantees. Unfunded programs would include Section 502 direct loans for single-family home purchases, Section 515 loans for multifamily housing development, and Section 514 farm labor housing loans. Section 504 repair loans would be greatly reduced, from $34.7 million in FY 2008 to $17.7 million.

Guarantees of loans made by private lenders – which cost the government far less than direct loans – would be substantially increased. The Section 502 guaranteed mortgage program would increase from $4.2 billion in 2008 to over $4.8 billion in 2009. Section 538 guarantees for rental housing would jump from $130 million to $300 million. There are no guarantee programs for repair loans or farmworker housing loans.

The 2008 budget said USDA planned to propose legislation to authorize subsidized guaranteed single-family housing loans for very low- and low-income rural residents, and then request funding for those loans. Such legislation was never introduced in Congress, and the 2009 budget does not mention the possibility of subsidized Section 502 guarantees. The 2009 budget would specifically prohibit providing subsidies for Section 538 multifamily housing guaranteed loans.

This year’s budget, like last year’s, also proposes raising the fee on new Section 502 guaranteed loans from 2 percent to 3 percent, explaining “this causes the loans to be less costly for the government without a significant additional burden to the borrowers, given that they can finance the fee as part of the loan.” Guarantee fees on Section 538 loans, on the other hand, would be prohibited.

Grants

Last year the Administration proposed a sharp cut in funding for the Section 523 self-help technical assistance (TA) program, which supports community organizations that run self-help “sweat equity” programs for low-income first-time homebuyers. This year, the budget suggests defunding Section 523 entirely, explaining that “demand for that program hinges on funding for single family direct loans,” which would receive no funding under this budget. Congress increased the program’s appropriation for FY 2008 rather than cutting it, but even the $39 million it provided is not enough to renew all expiring self-help TA contracts in 2008. Rural Development announced in late January that it will renew the contracts of performing grantees (that is, TA contractors who are meeting contract requirements) at 60 percent of their past funding levels. RD will not consider applications from any new organizations in FY 2008.

Preservation of Rental Housing

Rural Development has devoted serious attention to rental housing preservation over the last few years. Recent budgets have acknowledged the importance of rehabilitating Section 515 properties and assisting tenants displaced by loan prepayments, while requesting low funding levels. This year, USDA’s budget summary explains that because legislation proposed by the Administration in 2005 to authorize preservation efforts has not passed Congress, the budget requests no funding for preservation efforts.

H.R. 5039, a bill based on the Administration’s 2005 proposal, passed the House Financial Services Committee in 2006, and a revised bill, H.R. 4002, is currently pending in the same committee, whose Chairman, Rep. Barney Frank, has announced that rental preservation will be a top committee priority in 2008.

The budget not only provides no new preservation funding, but also proposes to cancel $20 million of the balance remaining in the revitalization program account from previous appropriations. Any other remaining funds could be used to provide vouchers for tenants in Section 515 properties whose owners prepay their mortgages.

a. Figures shown for FY 2006 and 2007 are before 1 percent across-the-board cut.
b. Rental Assistance contracts were for four years in FY 2006, for two years in FY 2007, and for one year in FY 2008.

HUD Programs Face Cuts or Elimination

a. Figures shown for FY 2006 and 2007 are before 1 percent across the board cut.
b. $200 million in counseling and foreclosure prevention activities is provided to the Neighborhood Reinvestment Corporation.
c. Housing counseling funding is under the HOME program.
d. Foreclosure prevention activities moved to appropriation for Neighborhood Reinvestment (not in HUD).
e. $25 million would be provided separately (not in HUD’s funding) to the Neighborhood Reinvestment Corporation (NeighborWorks America) for foreclosure prevention activities.

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Posted: February 4, 2008
Most recent update: February 8, 2008

If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

Legislative Update

VETERANS’ HOUSING BILL PASSES HOUSE

The House of Representatives on June 16 passed HR 403, a bill to expand the supply of housing and related services for very low-income veterans. Sponsored by Rep. Al Green (D-TX), the legislation directs HUD to provide assistance to private nonprofit organizations and consumer cooperatives to expand the supply of supportive housing for very low-income veteran families, makes vouchers available to all homeless veterans, regardless of medical condition, include veterans in public housing planning, and excludes veterans’ benefits from income for purposes of HUD-assisted rental determinations. To access the bill, visit https://thomas.loc.gov.

Posted June 17, 2009

HUD Spending Bill Clears Congress, Signed by President

President Obama on December 16 signed into law an omnibus bill for FY 2010 appropriations for HUD and several other federal agencies. The House passed the legislation on December 10 and the Senate on December 13. This bill is the result of conference negotiations to resolve differences between House and Senate versions. Many HUD programs received increases, and several new initiatives were funded. Replacing the Rural Housing and Economic Development program is a new $25 million “Rural Innovations Fund,” as proposed by the Obama Administration. The USDA spending bill for FY 2010 was signed into law on October 21. The table below has HUD details. For the full legislation, visit https://thomas.loc.gov/home/approp/app10.html.

(a) Proposed new initiatives under CDBG.
(b) Proposed in President’s budget to replace HOPE VI; included in final bill as $65 million demonstration.
(c) Replaced by Rural Innovations Fund under CDBG.
(d) New initiative to combat mortgage fraud.

Updated: December 18, 2009

UPDATE: USDA SPENDING LEVELS SET, CR APPROVED.

Posted: October 1, 2009

STOPGAP SPENDING MEASURE PLANNED

Congress this week is expected to pass a continuing resolution to fund federal programs as the new fiscal year begins. Reports are that the continuing resolution will go through October at least. No FY 2010 appropriations bills have passed in final form for the new year starting Oct. 1. House- and Senate-passed bills to fund USDA and HUD await conference committees to resolve differences. For details of the HUD bill see below.

Posted: September 21, 2009

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SENATE ADVANCES HUD SPENDING MEASURE

On July 30, the Senate Appropriations passed an FY 2010 spending bill for Transportation-HUD. Full details are not yet available, but a Committee statement notes that the bill includes the following funding levels for HUD programs:

• $18.1 billion for tenant-based Section 8 rental assistance
• $8.1 billion for project-based Section 8
• $3.99 billion for Community Development Block Grants
• $1.975 billion for HOME
• $1.875 billion for homeless assistance grants
• $670 million for Native American housing
• $785 million for Section 202 housing for the elderly
• $265 million for Section 811 housing for the disabled
• $320 million for Housing Opportunities for People With AIDs
• $165 million for housing counseling

Full Senate consideration of this bill, HR 3288, will likely occur in September. The House passed their different version of HR 3288 on July 23.

Posted: July 31, 2009

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HUD PROGRAMS BOOSTED FOR 2010

The House Appropriations Subcommittee for Transportation-HUD approved a spending bill for FY 2010 on July 13. Full details are not yet available, but a Subcommittee release shows substantial increases in many HUD programs. Overall HUD spending would rise from $41.5 billion in 2009 to $47.1 billion in 2010. For many programs the Subcommittee increased funding above both 2009 levels and the Presiden’s 2010 request. Further information will be posted on the HAC website after the full House Appropriations Committee acts on July 17. The Senate Appropriations Committee is expected to act on a Transportation-HUD spending bill within the next few weeks. Details of the House bill are below.

Posted: July 14, 2009

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If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

HUD changes SuperNOFA general section

An April 16 Federal Register notice says some programs may accept applications on paper rather than through grants.gov, with specifics to be provided in forthcoming individual program NOFAs. It does not say when those NOFAs will be released. Other changes include alternative websites where NOFAs will be posted. HAC is monitoring relevant sites daily and will post information here as soon as it becomes available.

HUD Releases General Section and Announces Forthcoming Separate NOFAs, No SuperNOFA, December 29, 2008. The general section published today applies to the programs previously included in HUD’s SuperNOFA. To streamline the application process, the department announced it will issue Notices of Funding Availability for individual programs separately, beginning in January and finishing sometime in June.

Expected timeframes for publication of individual NOFAs are included in the general section.

Additional useful links:

• General Section (needed for all HUD NOFAs)
• Grants.gov registration and renewal information (needed for all programs except Continuum of Care)
• Grants.gov website
• HUD’s SuperNOFA page

Links to Additional Resources

• View HUD’s funding information page.

If you have trouble accessing any information on HAC’s site only (not HUD’s or grants.gov), please contact Leslie Strauss, 202-842-8600.