The Fiscal Year (FY) 2004 budget proposed by President Bush for
the U.S. Department of Housing and Urban Development (HUD) is a
budget of opportunity. It offers new opportunities for families
and individuals to lift themselves toward self-sufficiency and achieve
the American Dream. It offers new opportunities for communities
nationwide to generate renewal, growth and prosperity through their
participation in programs that promote local decision-making. And
it provides HUD with new opportunities to improve the Department's
management and performance, ensuring that HUD is well run and results-oriented.
Reflecting HUD's role as the Federal agency responsible for addressing
America's housing needs and improving and developing the nation's
communities, the Administration is proposing $31.3 billion in funding
for HUD for FY 2004. These funds will support HUD's broad, yet focused
- Increasing homeownership opportunities
- Promoting decent affordable housing
- Strengthening communities
- Ensuring equal opportunity in housing
- Promoting the participation of faith-based and community organizations
- Embracing high standards of ethics, management and accountability
HUD has achieved measurable success since 2001 in carrying out
its mission and meeting the many challenges a Cabinet-level Department
must confront. Today, HUD annually subsidizes housing costs for
approximately 4.5 million low-income households through rental assistance,
grants and loans. It helps revitalize over 4,000 localities through
community development programs. The Department provides housing
and services to help homeless families and individuals become self-sufficient.
HUD also encourages homeownership by providing mortgage insurance
for more than six million homeowners, many of whom would not otherwise
qualify for loans.
Supported by the Administration's FY 2004 budget, this important
work will continue.
Increasing Homeownership Opportunities
For many families, the American Dream means owning their own home.
HUD is dedicated to helping more Americans - especially minorities
- realize the dream for themselves. The President has committed
this nation to creating 5.5 million new minority homeowners by the
end of this decade, and said last October, "We can put light
where there's darkness, and hope where there's despondency in this
country. And part of it is working together as a nation to encourage
folks to own their own home."
To achieve this, HUD is working to break down the barriers that
lock too many families out of homeownership. These barriers include
high down payments and closing costs; the inability of would-be
homeowners to access information about their rights, responsibilities
and financing options; and a confusing and costly homebuying process.
By eliminating these barriers, HUD is empowering families to know
the security of self-sufficiency, and strengthening communities
and the nation as a whole in many measurable ways.
Several new or expanded proposals in the FY 2004 budget will increase
the availability and production of affordable homes, and help hundreds
of thousands of families come to know the security of homeownership.
- American Dream Downpayment Initiative. HUD proposes
to fund the American Dream Downpayment Initiative, providing $200
million to help approximately 40,000 low-income families -
for whom coming up with down payment cash is the most significant
obstacle to homeownership - with the down payment on their
- New FHA Financing Option. The budget proposes
a new FHA mortgage product that rewards credit-risk borrowers
who make timely mortgage payments. This will help families with
poor credit records who would otherwise be forced to rely on high-cost
- Housing Counseling. Helping families learn about
the loan products and services available to them and how to identify
and avoid predatory lending practices is critical to increasing
homeownership. Housing counseling is an invaluable tool for not
only prospective homebuyers, but for renters as well, and anyone
struggling to keep their home amidst financial stress. The budget
increases housing counseling by $10 million, providing $45 million
to help take the mystery out of buying a home.
- Housing Choice Voucher Homeownership. The FY
2004 budget proposes to help low-income families move into homeownership
by allowing them to put up to a year's worth of their Housing
Choice Voucher assistance toward a home down payment. Housing
Choice Vouchers can also be used to subsidize the ongoing costs
of a mortgage.
- Self-Help Homeownership Opportunity Program (SHOP).
The FY 2004 budget continues President Bush's commitment to SHOP,
a key initiative of the Administration that reaches out to faith-based
and other community organizations working to turn low-income Americans
into homeowners. Funded at $65 million - triple the funding
level of 2002- the program will support the construction of 5,200
homes and reduce the cost of homeownership through sweat equity
and volunteer labor.
- Single-Family Affordable Housing Tax Credit.
To promote the production of affordable single-family homes in
areas where such housing is scarce - and to help revitalize
distressed communities - a tax credit of up to 50 percent
of the cost of constructing a new home or rehabilitating an existing
home would be provided. This new tax credit targets low-income
individuals and families; eligible homebuyers would have incomes
of not more than 80 percent of their area median.
Promote Decent Affordable Housing
At the same time HUD pursues its mission of increasing the ranks
of homeowners, the Department's work encompasses housing in every
other form as well, from single-family rentals and multifamily developments
to meeting the special needs of society's most vulnerable citizens.
Improving the quality and accessibility of public and assisted housing
remains a top priority.
The HUD FY 2004 budget proposal expands housing choice and opportunity
by offering new flexibility to state and local governments.
- Housing Assistance for the Needy. The Administration
proposes converting the Section 8 Housing Choice Voucher program
- one of HUD's major rental housing programs - to a
state-run block grant called Housing Assistance for Needy Families
(HANF). By giving administration of the program to the states,
the states could allocate resources to highest priority needs
and assist more low-income households to locate decent and affordable
housing in a timely and more effective manner.
- HOME Investment Partnerships Program. Our proposed
budget provides a five percent, or $113 million, increase in HUD's
HOME program. HOME is one of HUD's major tools for helping communities
meet housing-affordability needs, and offers maximum flexibility
to ensure local decision-making. An estimated $2.2 billion in
total funds will be provided through HOME to state and local grantees
to help finance the costs of land acquisition, new construction,
rehabilitation, down payments and tenant-based rental assistance.
- Public Housing Reinvestment Initiative (PHRI).
By giving public housing authorities (PHAs) a new ability to leverage
private capital, the proposed Public Housing Reinvestment Initiative
would substantially improve public housing conditions. A partial
loan guarantee is included to increase the proposal's effectiveness.
- Low-Income Housing Tax Credit. One of the major
Federal programs that finances new and rehabilitated affordable
rental housing is the Low-Income Housing Tax Credit. In 2002,
the tax credit supported an estimated 90,000 units of completed
low- to moderate-income rental housing. This number will increase
in subsequent years as the recent 40 percent increase in the tax
credit becomes fully effective.
- Regulatory Barriers to the Development of Affordable
Housing. HUD is committed to working with states and local
communities to reduce regulatory barriers to the development of
rental and affordable housing.
State and local governments depend upon HUD and its system of grants
to support community development projects that revive troubled neighborhoods
and spark urban renewal. In FY 2004, HUD will support and strengthen
these core programs by ensuring that grantees have even greater
flexibility to address locally determined priorities and maintain
- Community Development Block Grant (CDBG) Program. The
CDBG program will provide $4.436 billion, including insular areas,
in funding to meet locally identified community and economic development
needs in more than 1,000 eligible cities, counties and states.
In 2004, HUD will reform the program and make it more effective
by studying ways to reward communities that commit to results-oriented,
outcome-based performance plans.
- Colonias Gateway Initiative (CGI). The FY 2004
budget proposes $16 million for a new Colonias Gateway Initiative.
The CGI is a regional initiative, focusing on the rural communities
and neighborhoods - the colonias - located in many border
Through its FY 2004 budget, HUD will strengthen its efforts to
protect the nation's most vulnerable: those individuals and families
who truly need government assistance. The FY 2004 budget provides
services to adults and children from low-income families, the elderly,
those with physical and mental disabilities, victims of predatory
lending practices and families living in housing contaminated by
lead-based paint hazards.
HOMELESSNESS. Homelessness remains a special focus of the
Bush Administration, which made a commitment in 2001 to end chronic
homelessness within a decade. The latest research suggests that
persons experiencing chronic homelessness - a number estimated
to be approximately 150,000 - may make up less than 10 percent
of the homeless population, yet consume more than half of all homeless
services. Meeting a goal as ambitious as ending chronic homelessness
requires investing in permanent solutions that decrease the number
of homeless men and women, not simply moving individuals off the
street and into shelters. Highlights within the FY 2004 budget include:
- The Samaritan Initiative. The new Samaritan Initiative
is an important new element of the Administration's strategy to
end chronic homelessness. The Samaritan Initiative includes a
proposed competitive grant, to be administered jointly by HUD
and the Departments of Health and Human Services (HHS) and Veterans
Affairs (VA). For 2004, HUD provides $50 million for the housing
component of this initiative, while HHS and VA will each provide
$10 million for services such as substance abuse treatment and
primary health care. Priority will be given to state and local
grantees who seek to expand access to mainstream federal programs
by those who experience chronic homelessness.
- Consolidation of Homeless Assistance Grants.
To increase the flexibility of communities in combating homelessness,
the budget proposes to consolidate the current three homeless
assistance programs. The move will provide more consistent funding
and eliminate the burden of administering the current competitive
- Interagency Council on Homelessness. In the previous
fiscal year, the Administration reactivated the U.S. Interagency
Council on Homelessness and doubled its funding to $1 million.
In recognition of the Council's effectiveness in coordinating
the efforts of the 18 Federal agencies that support homeless men,
women and families, the Department will provide $1.5 million to
operate the Interagency Council, a 50-percent funding increase
over FY 2003.
OTHER VULNERABLE POPULATIONS. The following are highlights
of those HUD programs that provide essential support to a wide range
of populations with special needs:
- Elderly Housing and Services. For FY 2004, HUD
will continue its support for older Americans by providing $783
million for the Section 202 supportive housing for the elderly
- Persons with Disabilities. The FY 2004 budget
provides $251 million under HUD's Section 811 program to improve
access to affordable housing for persons with disabilities.
- Persons with HIV/AIDS. In FY 2004, HUD will fund
the Housing Opportunities for Persons with AIDS (HOPWA) program
at $297 million.
The budget also increases funding to $17 million for the Manufactured
Housing Standards program and provides $136 million for the Lead-Based
Paint program, of which $10 million is for the Healthy Homes initiative.
In addition, the budget provides $25 million for a new, innovative
lead hazard reduction demonstration program, to be funded within
the HOME Investment Partnerships program budget request.
PROGRAMS THAT PROMOTE SELF-SUFFICIENCY. Activities that
help low-income working families acquire skills that will increase
their earnings and move them toward self-sufficiency are central
to HUD's mission. HUD also seeks to help low-income families accumulate
assets so that they can achieve homeownership, pursue education
opportunities, start new businesses and reach other important goals.
HUD has a number of programs that contribute to this objective by
providing families with the housing stability they need in order
to secure a job and increase their earnings.
Key initiatives for FY 2004 include:
- Housing Assistance for Needy Families (HANF).
By overhauling the voucher program to allocate vouchers to the
states rather than PHAs, HUD will provide a unique opportunity
to improve the coordination of self-sufficiency efforts between
the voucher program, the Temporary Assistance for Needy Families
program and other state-run self-sufficiency initiatives. State
control of both the housing and welfare programs, along with additional
flexibility in the housing program to allow local needs to be
addressed, should result in more effective self-sufficiency efforts
and better support of the families involved.
- Family Self-Sufficiency (FSS) Program. In FY
2004, the Department will provide $72 million (within the Housing
Assistance for Needy Families account) to continue and expand
the FSS program. The FSS program is designed to link families
with local opportunities for education, job training and counseling
while they receive housing assistance. Over a 5-year period, as
the earnings of a participant grow, an amount equal to the increased
rent attributable to the participant's increased earnings is deposited
into an escrow account to purchase a home, pay for higher education
or even start a business. Currently, the FSS program serves more
than 55,000 families in the tenant-based Section 8 and public
- Resident Opportunity and Self-Sufficiency (ROSS) Program.
As it has since 1999, the Department will provide $55 million
in funds to support the ROSS program for residents of Public and
Native American Housing. The main purpose of the funds is to provide
a link between residents and services that can help them achieve
self-sufficiency. ROSS is funded from both the Public Housing
Capital Fund and the Public Housing Operating Subsidy Account.
Ensuring Equal Opportunity
HUD's commitment to creating equal housing opportunities for all
Americans regardless of race, color, religion, sex, national origin,
age, disability and familial status has never been stronger. Within
the FY 2004 budget, HUD will have the tools it needs to help Americans
receive fair and equal access to housing, without fear of discrimination
- Fair Housing Assistance Program (FHAP). The FY
2004 budget allocates $29.7 million for the Fair Housing Assistance
Program. The program provides funding to state and local jurisdictions
that have entered into cooperative agreements with HUD and whose
housing discrimination laws are substantially equivalent to the
federal fair housing laws. The funds support enforcement, education
- Fair Housing Initiatives Program (FHIP). The
Fair Housing Initiatives Program supports non-profit agencies
that directly target discrimination through education, outreach
and enforcement. The HUD budget proposes funding of $20.3 million
for FY 2004.
Promoting the Participation of Faith-based and
The Administration is committed to knocking down the barriers that
faith-based and community organizations face in acquiring federal
grants. In 2002, HUD conducted an exhaustive review of its internal
regulations to identify barriers to faith-based participation in
its programs. Following this review, the President proposed eliminating
federal regulations that unnecessarily limit the ability of religious
organizations to access grant programs administered by HUD.
HUD's proposed budget for FY 2004 builds on the Administration's
commitment to place faith-based and community organizations on an
equal footing with other programs that serve low-income Americans
and revitalize distressed neighborhoods. Through HUD's Center for
Faith-Based and Community Initiatives, the Department is eliminating
the barriers to participation and substantially strengthening its
partnership - and its communication and information sharing -
with faith-based and community groups.
Embracing High Standards of Ethics, Management
HUD has made great progress over the past 2 years in implementing
the President's Management Agenda and making the Department work
better for the taxpayers and for every American who seeks a place
to call home. HUD today is insisting on completion, performance
and results. The steps the Department has taken have gone a long
way toward restoring the confidence of Congress and the public in
HUD's management of its financial resources.
In accordance with the President's Management Agenda, HUD is embracing
the highest standards of ethics, management and accountability in
carrying out its work. This commitment will continue in FY 2004.
Content Archived: January 20, 2009