Congressional Justifications for 1998 Budget Estimates

Office of Housing
Salaries and Expenses, Housing and Urban Development

Budget Activity 3: Housing Programs

The consolidated discussion for the appropriation "Salaries and Expenses, HUD" is shown in Part 3 of the Justification. All data are presented on a comparable basis for the 3 fiscal years: 1996, 1997, and 1998.

Summary of Budget Request

For 1998, Housing's Salaries and Expenses budget request is for $22,302 thousand in contract funds and $9,202 in travel funds. These increases of $20,000 thousand in contract funds and $6,000 thousand in travel funds over the 1997 estimates are part of the total funding requested for HUD's Multifamily Enforcement Strategy.

The goals of the HUD's Multifamily Enforcement Strategy are to remove every troubled property from the portfolio in the next 4 years and to ensure that the rest of the portfolio remains in good condition. In order to accomplish these goals, resources for the Multifamily Enforcement Strategy include the contracting related to non-FHA projects for physical inspections of all properties; specialized asset management services; expanded SWAT teams to identify, diagnose and resolve problems; and legal services as well as the travel for HUD staff engaged in implementing the Enforcement Strategy.

The Office of Housing is consolidating and reorganizing its Field and Headquarters structures to provide better service:

  • Single Family Homeownership Centers are planned to consolidate the services currently provided in 80 Field Office locations. Three have already been established in Denver, Philadelphia and Atlanta and functions are being gradually shifted there. Two more are under consideration.

  • Multifamily Housing is proposing to establish five Matrix Teams, which will permit shifting workload and staff to match changing requirements. In addition, Multifamily Hubs have been established for coinsurance, property disposition and Section 8 voucher processing.

Scope of Activity

The Housing staff is responsible for implementing legislation which authorizes the Department to enter into contracts for the development and operation of projects for occupancy by very low-income, low and moderate-income households, to provide direct loans to nonprofit sponsors for the development of housing for the elderly or handicapped, to underwrite mortgage or loan insurance to finance new construction, rehabilitation or the purchase of existing dwelling units, and to conduct several regulatory functions. The legislation includes:

  • The U.S. Housing Act of 1937, as amended, which authorizes rental assistance to certain lower-income households under Section 8 of the Act;

  • The National Housing Act, as amended, which authorizes the provision of mortgage or loan insurance for single family and multifamily housing and healthcare facilities such as hospitals and nursing homes;

  • Sections 201 and 203 of the Housing and Community Development Amendments of 1978, as amended, which govern the management and disposition of housing projects;

  • Section 202 of the Housing Act of 1959, as amended, which authorizes capital grants for teve´┐Żo m opment of housing for the elderly or handicapped;

  • Section 811 of the National Affordable Housing Act which authorizes capital grants and rental assistance for the development of housing for the disabled;

  • Title IV of the Housing and Community Development Amendments of 1978, as amended, which authorizes the Congregate Housing Services program;

  • Section 101 of the Housing and Urban Development Act of 1965, as amended, which authorizes rent supplements on behalf of needy tenants living in privately owned, privately operated and privately financed housing;

  • The Interstate Land Sales Full Disclosure Act, as amended, which requires developers of subdivisions to file registration statements with the Secretary where mail or interstate commerce is involved;

  • The National Manufactured Home Construction and Safety Standards Act of 1974, which authorizes HUD to develop and enforce construction and safety standards for all manufactured homes sold in the United States;

  • The Real Estate Settlement Procedure Act of 1974, as amended, which authorizes the regulation of certain lending practices and settlement and closing procedures in Federally related mortgage transactions to eliminate unnecessary costs and to minimize difficulties of settlement; and

  • The Lead-Based Paint Poisoning Prevention Act of 1971, as amended, which authorizes: (1) the establishment of procedures to eliminate the hazards of lead-based paint in any existing house which is covered by an application for mortgage insurance or housing assistance payment, and (2) procedures to eliminate the hazards of lead-based paint poisoning in all Federally owned properties prior to sale when their intended use is residential.

Workload

The principal workload for Housing staff, partners and contractors is:

  • encouraging homeownership opportunities for first-time homebuyers and very low-income, low and moderate-income families and families living in areas under-served by the housing finance and mortgage credit markets by insuring mortgages on both existing and new homes as well as supporting and encouraging related efforts by Fannie Mae and Freddie Mac;

  • providing programmatic regulation of the mortgage finance activities of Government Service Enterprises (GSE) by establishing, monitoring and enforcing housing goals, approving new programs, establishing additional fair lending requirements, and expanding awareness of the GSE's mortgage purchase activities;

  • reengineering the portfolio of project-based Section 8 assistance so that FHA losses will be minimized and all projects will be financially viable with market-rate rents;

  • maintaining and preserving homeownership by insuring mortgages and loans used for the rehabilitation or improvement of existing homes;

  • preserving homeownership for elderly Americans through the insurance of "reverse" mortgages that allow elderly homeowners to remain in their homes by converting the equity in their homes to a stream of income;

  • insuring mortgages on Indian reservation lands where conventional insured financing is not available due to title restrictions on reservation lands;

  • encouraging the development of affordable rental housing by insuring mortgages on both new and existing apartment buildings;

  • supporting the provision of community-based health care by insuring mortgages on hospitals and other health-care facilities, such as nursing homes and assisted living facilities;

  • developing underwriting standards, making actuarial determinations, and establishing fees and premiums for mortgage insurance for homes and projects and other financial and related assistance authorized by the National Housing Act;

  • collecting FHA mortgage insurance premiums, processing and accounting for premiums, refunds to lenders/homeowners and insurance premium claims, providing financial/accounting services for assigned loans, HUD-insured/HUD-held mortgages/notes, real property acquisitions/dispositions and asset sales for Single Family/Multifamily/Title I insured programs;

  • managing FHA financial assets through loan sales, debt restructuring and other loss mitigation initiatives;

  • performing property disposition activities which include supervision of Real Estate Asset Managers, rehabilitation of acquired properties, management of the property inventory and the sale of HUD-owned properties;

  • providing debt management and collection services to recover debts owed the Federal government arising from FHA insurance and loan programs, Section 312, and other HUD programs;

  • performing preapplication and other review activities through to construction completion, execution and closing of contracts and mortgages;

  • participating in the analysis, review, and evaluation of HUD-insured and/or Section 8, and other multifamily projects during the construction and occupancy stages;

  • reviewing and monitoring multifamily projects including analyzing operating statements and annual financial reports and inspecting the physical condition of projects to ensure that appropriate management activities are conducted as well as enforcing the terms and conditions of contracts between HUD and participants;

  • reviewing and monitoring State agency administration of Federal housing programs;

  • setting standards and providing oversight for servicing and managing the disposition of HUD-insured and HUD-held mortgages for Single Family and Multifamily insurance programs, negotiating forbearance agreements, and handling assignments of mortgages;

  • managing housing programs for the elderly and disabled;

  • developing new instructions and issuances and revising existing issuances such as Annual Adjustment Factors for the Section 8 program;

  • managing short-term contract renewals, opt-outs and replacement subsidies for expiring Section 8 project-based subsidy contracts;

  • directing special initiatives such as Neighborhood Networks and the Safe Neighborhood Action Program (SNAP), which require coordination with owners, managers, residents, community groups, local businesses and providers of social and educational services;

  • monitoring and reviewing the performance of mortgage lenders and other program participants for compliance with Federal housing program requirements under the National Housing Act, as well as approving lenders for participation;

  • certifying or recertifying housing counseling agencies;

  • developing and enforcing the Manufactured Home Construction and Safety Standards which require extensive coordination with State agencies, industry and consumer groups to regulate over one-third of the total U.S. Single Family housing production;

  • examining registration statements and other required material from developers of subdivisions involved in interstate commerce to determine their formal and legal adequacy and issuing exemption orders and advisory opinions under the Interstate Land Sales Registration Act;

  • protecting consumers of real estate settlement services by requiring disclosures of settlement costs;

  • training and educating the market place, industry participants and potential homebuyers and renters in the availability of the insurance programs;

  • establishing minimum property standards for all buildings constructed under HUD housing programs. This includes multifamily housing and health care facilities as well as Single Family dwellings; and

  • reviewing and accepting use of new products and materials for buildings financed with HUD-insured mortgages.

Staff Functions

  1. Headquarters Staff Functions

    Headquarters staff have the responsibility for performing the following principal functions:

    • developing, revising and evaluating program and policy recommendations for all Housing programs;

    • directing and coordinating the administration of all Housing programs and providing technical assistance and procedural guidance to the Field staff;

    • monitoring, reviewing, and evaluating Field program operations and reviewing administrative practices of local agencies to ensure that programs are managed efficiently and that services and assistance are provided as intended;

    • operating and evaluating national asset disposition strategies;

    • providing accounting, actuarial and debt management support for FHA programs to ensure the fiscal health of these funds;

    • providing administrative, budgetary contract administration support for Housing programs;

    • administering regulatory functions of the Department as required; and

    • providing budget formulation and execution support for Housing's Programs and Salaries and Expenses to ensure proper fiscal control and resource management.

  2. Field Staff Functions

    1. Production

      1. Single Family

        • working in partnership with lenders, home builders, real estate brokers, State and local governments, non-profits and other members of the residential mortgage market to expand and maintain affordable homeownership opportunities by insuring mortgages on existing and new one-to-four family homes; and

        • insuring, monitoring and reviewing the mortgages originated and underwritten by approved lenders and performing marketing and outreach activities associated with loan production.

      2. Multifamily

        • working directly with mortgage lending partners and reinsurers, sponsors, developers, State and local governments, and mortgagees in the preparatione ir , ew, and approval of applications for grants, and mortgage insurance;

        • processing the initial inquiry about obtaining program assistance and continuing through the review and approval of applications, the execution of assistance contracts, the inspection and completion of construction, and the closing of loans and grants, execution of Project Rental Assistance contracts, and final endorsement of mortgage insurance.

    2. Asset Management and Real Estate Owned

      1. Single Family

        • preserving the quality and fiscal integrity of FHA insured housing including the disposition of Secretary-held properties and mortgages;

        • developing and monitoring lender loss-mitigation techniques and procedures;

        • managing and servicing of FHA-insured and Secretary-held mortgages;

        • managing and disposing of HUD-owned properties;

        • reviewing servicing mortgagees for compliance with FHA guidelines and statutory requirements; and

        • monitoring the housing counseling activities of all HUD-approved counseling agencies.

      2. Multifamily

        • working with residents, owners and communities to make HUD assisted/insured properties better places to live and credits to the surrounding neighborhood;

        • preserving the housing quality and fiscal integrity of HUD assisted/subsidized/insured housing programs; and

        • managing and servicing of HUD-insured and HUD-held mortgages, including the disposition of HUD-held properties and mortgages, managing of Housing's subsidized programs, and managing the Direct Loan and grants portfolios.

    3. Debt Management
      • providing asset recovery services including debt management and collection of FHA and HUD unsecured assets;
      • providing asset management services to Headquarters and the Field including identifying causes of delinquency and debt, and recommending methods to improve debt management and increase collections; and

      • supporting asset sales by providing pre-sale analysis of proposed sales portfolio, marketing the asset sales program to potential bidders, and providing post sales support to reconcile data.

Contracts

The principal Salaries and Expenses contract categories are: Technical Services, Data and Statistical Services, Management Studies, Public Information Services, and Training Contracts (non-Federal). The following table identifies the estimated costs in Housing for each of these contract categories.

  Actual
1996
Budget
Estimate
1997
Current
Estimate
1997
Estimate
1998
Increase+
Decrease-
1998 vs 1997
(Dollars in Thousands)
Technical Services $1,803 $1,344 $1,827 $21,627 +$19,800
Data and Statistical Services 226 525 300 300 ...
Management Studies ... ... 150 350 +200
Public Information Services ... ... 25 25 ...
Training Contracts (non-Fed.) ... ... ... ... ...
Total $2,029 $1,869 $2,302 $22,302 +$20,000

 

Estimate 1998

1. Technical Services $21,627 Thousand
    a. Multifamily Enforcement
$20 Thousand
This item is to fund the non-FHA portion of the contracting associated with HUD's Multifamily Enforcement Strategy. The goals of the Enforcement Strategy are to remove every troubled project from the portfolio in the next 4 years and to ensure that the rest of the portfolio remains in good condition. Contracting activities for the Enforcement Strategy include the physical inspection of all properties in the portfolio; specialized asset management services; and expanded SWAT teams to identify, diagnose and resolve problems. Contracting for legal services, also part of the Enforcement Strategy, is listed separately below. (Requested amount for 1997: $0 thousand)
    b. National Homeownership Strategy
$250 Thousand
This contract is designed to assist in the achievement of a record high level of homeownership in the United States by the end of this century. It is a Presidential and Secretarial priority in which Housing will work with national, State and local housing partners. (Requested for 1997: $250 thousand)
    c. Home Mortgage Disclosure Act (HMDA) ADP Support } Services (IAA with the Federal Reserve)
$375 Thousand
This is an interagency agreement with the Federal Reserve Board to cover HUD's share of HMDA requirements that are met by ADP systems which collect and publish data in accordance with the Act. (Requested amount for 1997: $375 thousand)
    d. Manufactured Housing Testing
$0 Thousand
This contract is for ad hoc manufactured home safety enforcement testing which is required by statute and funded by a transfer from the Manufactured Home Inspection and Monitoring Program. Beginning in fiscal year 1998 this cost will be shown as a direct charge to the Manufactured Housing fee account. (Requested for 1997: $200 thousand)
    e. Non-Citizen Rule Implementation - (IAA with Immigration and Naturalization Service)
$130 Thousand
This is an inter-agency agreement between HUD and the Immigration and Naturalization Service (INS) for access to the INS database to implement the statutory requirement of determining the citizenship/resident status of persons receiving or applying for Housing assistance. (Requested for 1997: $175 thousand)
    f. Legal Services for Enforcement Activities
$400 Thousand
This item provides for the investigation of suspected violations of contracts, regulations and regulatory agreements, and it develops the administrative recoequ rquired of the Department before taking enforcement action. (Requested for 1997: $400 thousand)
    g. On-Site Quality Control Monitoring
$250 Thousand
This item provides for the development of a Quality Assurance Monitoring System to evaluate Multifamily management agent activities of assisted projects to ensure that assistance is being provided to eligible tenants. (Requested for 1997: $250 thousand)
    h. Management of Change
$0 Thousand
This contract would provide professional consulting services and technical assistance to help Single Family staff better manage change during this period of Departmental consolidations and restructuring. As Single Family functions are moved from 80 Field Offices to five Homeownership Centers, it is essential that employees continue to be able to provide prompt and efficient service to customers while coping with the disruptive and unsettling aspects of change. (Requested in 1997: $26 thousand)
    i. Manufactured Housing Safety Codes - Advisory Committee
$115 Thousand
This contract provides for the establishment of an Advisory Committee to develop changes in Manufactured Home standards for referral to HUD. This contract is needed only if legislative authority to fund this activity from fees is not provided. (Requested in 1997: $0 thousand)
    j. Installation Review
$30 Thousand
This would study the current installation standards for manufactured homes and proposes recommendations for creating a uniform national installation standards program administered by the states. (Requested for 1997: $0 thousand)
    k. Portfolio Analysis, Technology Integrations, Technical Writing and Other Support
$77 Thousand
This item combines the funding requirement for contracts to provide short-term assistance with specialized, non-FHA portfolio analysis, strategies to integrate technology into the implementation of Housing programs, technical writing,and other support as needed. (Requested for 1997: $151 thousand)
2. Data and Statistical Services $300 Thousand

a. Home Mortgage Disclosure Act (HMDA) Data Survey

$300 Thousand
This contract provides support for conducting a survey of all unregulated mortgage companies as well as lenders doing business under FHA programs. This work is Congressionally mandated with prescribed deadlines. (Requested for 1997: $300 thousand)
3. Management Studies $350 Thousand

a. Surveys of Financial Institutions

$150 Thousand
This contract is for collecting monthly information on the mortgage activity of various types of financial institutions. (Requested amount for 1997: $150 thousand)

b. Risk Analysis/Internal Control Review

$200 Thousand
This contract would provide for risk analysis and internal control reviews of Comptroller programs in accordance with statutes, regulations and accounting principles. The total cost of this contract is $1,000 thousand of which $800 thousand will be provided for in future fiscal years subject to the availability of funds. (Requested for 1997: $0 thousand)
4. Public Information $25 Thousand

a. Public Information Contracts

$25 Thousand

This item combines the funding requirement for contracts to provide short-term assistance with the preparation of public information. (Requested for 1997: $25 thousand)


Travel Actual
1996
Budget
Estimate
1997
Current
Estimate
1997
Estimate
1998
Increase +
Decrease-
1998 vs 1997
(Dollars in Thousands)
Headquarters $1,428 $1,279 $1,440 $7,440 $6,000
Field 1,599 2,370 1,762 1,762 ...
Total $3,027 $3,649 $3,202 $9,202 $6,000

The 1998 travel estimate of $9,202 thousand represents an increase of $6,000 thousand over the 1997 current estimate for travel associated with HUD's Multifamily Enforcement Strategy.

 

 
Content Archived: January 20, 2009