HUD Finally Gets Funding
by Lew Sichelman
Congress has cleared an omnibus appropriations measure which includes more than $37 billion in funding for the Department of Housing and Urban Development in fiscal 2005. In that the current fiscal year began more than 60 days ago -- October 1, to be exact -- the funding bill brings a measure of relief to HUD and all those who depend on the housing department. But it does not make some affordable housing advocates happy. Nor is President Bush particularly pleased. Although the $37.3 billion allocated for HUD is $521 million more than the White House had requested, it is $618 million short of last year's level and cuts some vital programs, including the President's pet American Downpayment Assistance Act. Lawmakers slashed Mr. Bush's request for $200 million to provide downpayment and closing cost assistance by 75 percent, to a mere $50 million. Calling the omnibus bill a "clean package" that was free of controversial riders, House Appropriations Committee Chairman C.W. Bill Young, R-Fla., said, "We have resisted many requests for additions to the package that would have busted the budget by billions ... The only provisions that were included had bipartisan, bicameral support." According to Rep. Young's office, the final spending package fully complies with the spending targets agreed to by the Congress and the Administration. But Sheila Crowley of the National Low Income Housing Coalition wasn't pleased. "Tougher times are ahead for low income people in the United States," she said bluntly. People who need or rely on public housing, Indian housing, elderly housing, housing for people with AIDS or who are disabled, block grants for affordable housing and community development and even homeless assistance will have to make due with less in the coming year, Crowley complained. "This heralds the future of federal low income housing programs in the second Bush Administration," the housing advocate said. "While public housing residents have had to struggle with reduced resources since FY02, this year marks the first time under the Bush Administration that all HUD programs will get less money for the coming year than they got in the last." There are some bright spots in the budget bill, however. For one thing, it renewed loan commitment authority for the Federal Housing Administration mortgage insurance programs. While it maintains the funding level for the profit-generating FHA single-family program at $185 billion and keeps Ginnie Mae's loan guarantee limit at $200 billion -- the same as last year -- it raises the loan commitment authority for the FHA multi-family program from $25 billion in fiscal '04 to $35 billion in '05. The increase is intended to prevent the multi-family program from shutting down, as it has been forced to do several times over the past few years, until Congress can approve supplemental appropriations. Funding for the Office of Federal Housing Oversight, the safety-and-soundness regulator of Fannie Mae and Freddie Mac, the two secondary market institutions which keep lenders flush with cash for home loans, also was increased by nearly 50 percent to $59.2 million as the White House had asked. The two government-sponsored enterprises have been under the gun lately for accounting problems and for what some perceive as overstepping the boundaries set for them years ago by Congress, so lawmakers are giving OFHEO more money to bolster the agency's oversight of the GSEs. However, other several other key programs were cut: - The HOME program was funded at $1.87 billion for FY 2005, down from $2.01 billion.
- Community Development Block Grants were funded at $4.15 billion, down from $4.93 billion in '04.
- Rural housing and economic development lost $1 million, from $25 million in fiscal '04 to $24 million in '05.
At the same time, though, money earmarked for Section 8 vouchers was set at $13.46 billion, up from $12.7 billion. For the first time, funding for Section 8 is split into two accounts, one for tenant-based assistance (vouchers) and the other for project-based aid. But the Administration's Flexible Voucher Program was axed. And the NLIHC's Crowley moaned that language governing how HUD can administer housing voucher funding is restrictive and unresponsive to local conditions. | 
