HUD emphasizes affordable housing In testimony March 3 before the House Appropriations Committee, John C. Weicher HUD's assistant secretary for housing and Federal Housing Commissioner and Assistant Secretary for Public and Indian Housing Michael Liu, discussed the specifics of the agency's $31.3 billion fiscal year 2005 budget. While three-fourths of the budget proposal is dedicated to rental housing, HUD is also continuing its efforts to promote affordable housing and strengthen communities.
"This budget shows just how committed this administration is to the people and places who need help," said Weicher. "Whether it's promoting homeownership and affordable housing or serving our most vulnerable citizens, the resources we are requesting signal a strong investment in neighborhoods throughout America."
HUD remains committed to increasing homeownership, particularly among minority families. Census data continues to shows that while nearly 70 percent of all American households own their own homes, less than half of African-American and Hispanic families are homeowners.
Intent on closing this "homeownership gap," President Bush announced "America's Homeownership Challenge," committing the nation to adding 5.5 million minority homeowners by the end of the decade.
In fact, more than 1.6 million new minority homeowners were created in the United States since June of 2002 when the challenge was issued. HUD is proposing the following initiatives to increase homeownership and affordable housing opportunities for low-income Americans:
* Zero Down Payment Mortgage. HUD is seeking legislation to offer a new NO DOWN PAYMENT mortgage product to help an estimated 150,000 families a year to purchase their first home. Currently FHA requires at least a three percent down payment.
* American Dream Downpayment Initiative. For the third consecutive year, HUD's spending plan includes $200 million for the American Dream Downpayment Initiative to help tens of thousands of low-income families a year to become first-time homeowners.
* HOME Investment Partnerships Program (HOME). HUD is proposing more than $2 billion for the HOME program to be allocated to 630 state and local governments. HOME funds encourage the production of affordable housing by financing the cost of land acquisition, new construction, rehabilitation, downpayment assistance and rental subsidies.
* Housing Counseling. The budget includes a record $45 million to support 550,000 families with home purchase and homeownership counseling and about 250,000 families with rental counseling. In the past three years, the Bush Administration has more than doubled funding to this program.
* Flexible Voucher Program. HUD is proposing sweeping reform of the nation's rental assistance voucher program that will give local housing officials the flexibility they have long requested to better address their local needs and potentially serve more families. The new Flexible Voucher Program (FVP) will allow public housing authorities (PHAs) to set rents using local rental market data. Giving local officials the authority to use local rental market data will stop the spiraling cost of the Housing Choice Voucher Program.
The Flexible Voucher Program will lead to significant cost savings to the voucher program and will provide performance-based incentives for PHAs to serve more families presently waiting for rental assistance.
* Public Housing Operating and Capital Funds. HUD seeks $3.6 billion to fund local public housing authorities in their daily operation. In addition, the FY 2005 budget will provide nearly $2.7 billion to help local public housing authorities fund major repairs and modernizations in their housing units. Also in 2005, up to $55 million will be targeted for the Resident Opportunity and Self-Sufficiency (ROSS) program that provides supportive services and assists public housing residents in becoming economically self-sufficient.
* Flexible Voucher Program � Homeownership. HUD is also encouraging local housing agencies to use rental assistance vouchers toward moving low-income families into homeownership. The housing agencies may either provide mortgage assistance in lieu of a rental subsidy or offer families a one-time down payment grant equaling up to one-year's worth of their rental assistance.
* Single-Family Affordable Housing Tax Credit. To stimulate the production of affordable homes in distressed communities where such housing is scare, the administration will again propose a tax credit of up to 50 percent of the cost of new construction or rehabilitation. This tax credit targets low-income households earning less than 80 percent of an area's median income.
* Self-Help Homeownership Opportunity Program (SHOP). President Bush is renewing his request for $65 million to fund so-called "sweat equity" homeownership programs. This proposal would provide grants to support nonprofit organizations like Habitat for Humanity, which requires low-income families to help construct the homes they will eventually own. These funds will help produce approximately 5,200 new affordable homes nationwide.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The department also promotes economic and community development as well as enforces the nation's fair housing laws.