HUD's FY99 Budget
Congressional Justifications
Office of Housing
Salaries and Expenses
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 three fiscal years: 1997, 1998, and 1999.
SUMMARY OF BUDGET REQUEST
- HUD 2020 Management Reform
The HUD 2020 Management Reform Plan will revitalize Housing�s mission in order to meet the needs of the next century. As a result of a comprehensive analysis of Housing programs and program delivery, the Office of Housing identified some areas needing improvement: poor alignment of staff and resources, lack of integrated computer systems, and high risks in the multifamily portfolio. Management Reform for Housing will achieve the needed improvements for these and other areas through the consolidation of skills and functions and the reengineering of Housing programs.
For Housing Headquarters, HUD 2020 Management Reform will streamline operations to better focus on such HUD-wide responsibilities as policy and budget development, troubleshooting, industry relations, and those that support field office service delivery. The field support provided by Headquarters will focus on personnel, procurement/contracting, information technology, training and auditing, and technical assistance.
For Field Housing, HUD 2020 Management Reform will improve performance through the better alignment of staff and resources with workload needs and through the reduction of the level of risk in the multifamily portfolio. Each Housing program/function will restructure its field operations to meet its specific requirements.
a. Single Family
Single Family Housing will consolidate all Single Family operations into four Homeownership Centers, in Philadelphia, Atlanta, Denver and Santa Ana. This reform will generate economies of scale, encourage better use of technology, and allow Housing to dedicate staff solely to customer assistance. To jump start the transition, Housing will either streamline or outsource Real Estate Owned activities and sell nearly all assigned notes.
b. Multifamily
Multifamily Housing will consolidate its field functions, which have been supported in 51 field offices, into 18 Program Hubs. These Hubs will be supported by staff in 33 subordinate Program Centers; staff will be on detail to various locations, moving across Hubs and Program Centers. Shifting assignments will allow staff to adapt to resources and focus as needed to respond to changing markets.
c. Housing-FHA Comptroller
Title I asset recovery operations, which have been performed in three Asset Recovery Centers, are being consolidated in one Center in Albany, New York. The Housing-FHA Comptroller is also working with the Department of Treasury to transfer appropriate asset recovery activities to Treasury.
SCOPE OF ACTIVITY
The Housing staff is responsible for implementing legislation which authorizes the Department to assist projects for occupancy by very low-income and low-income and moderate-income households, to provide capital grants 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 for health care 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 and rental assistance for the development 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;
-- 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; and
-- 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.
WORKLOAD
The principal workload for Housing staff, partners and contractors is:
-- encouraging homeownership opportunities for first-time homebuyers and very low-income, low-income 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;
-- 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 and economic development 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 to 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 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 existing housing programs for the elderly and disabled, (development of new housing will be done as part of the HOME program which is administered through NAHA);
-- 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;
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
a. 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 preparation, review, and approval of applications for grants, and mortgage insurance; and
-- 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.
b. 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 neighborhoods;
-- preserving the housing quality and fiscal integrity of HUD assisted/subsidized/insured housing programs; and
-- managing and servicing HUD-insured and HUD-held mortgages, including the disposition of HUD-held properties and mortgages, managing Housing's subsidized programs, and managing the Direct Loan and grants portfolios.
c. ASSET RECOVERY
-- 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 for the Office of Housing are: Technical Services, Data and Statistical Services, Management Studies, and Public Information Services. The following table identifies the estimated costs in Housing for these contract categories and description of the 1999 estimate.
These funds are for specialized technical services, not otherwise identified. They include such services as actuarial services, translation services, manual preparation and debt collection, preparation of marketing materials, technical writing, etc.
This subobject class represents the cost of gathering data such as conducting surveys of unregulated mortgage companies and lenders doing business with FHA programs.
This represents the cost of preparing and promulgating information about the Office Housing�s activities.
TRAVEL
The table below identifies travel requirements for the Office of Housing:
The 1999 travel estimate of $5,632 thousand represents an increase of $2,230 thousand over the 1998 current estimate. Travel funding estimates reflect increased requirements associated with improved program management, increased community involvement, and consolidated field structure.
Content Archived: January 20, 2009