$31.5 BILLION HUD BUDGET MEANS EXPANDED HOMEOWNERSHIP, RENTAL ASSISTANCE, ECONOMIC DEVELOPMENT AND JOB GROWTH FOR KANSAS

KANSAS CITY, KS - President Bush's request for $31.5 billion for the Department of Housing and Urban Development
in Fiscal Year 2003 would help more Kansans become homeowners, and provide additional rental assistance, protect vulnerable people, and stimulate economic development and job growth across the country. The proposal represents an increase of $2.1 billion over HUD's initial FY 2002 budget.

The President's budget proposal includes $200 million for the American Dream Downpayment Fund to continue to help more Americans reach the dream of homeownership. Administered under HUD's HOME program, this fund will help an estimated 40,000 low-income families a year to become first time homeowners. Since the Administration recognizes homeownership is not an option for everyone, the budget also provides 34,000 new incremental housing choice vouchers to provide rental assistance to assist millions of families struggling to find an affordable place to live.

"This budget will open the door of homeownership to more and more Americans and offer assistance to millions of other families struggling to find an affordable place to live," said HUD Secretary Mel Martinez. "We want to give every American the opportunity to become stakeholders in their community. The President's budget allows us to accomplish this, while stimulating economic development and job growth at the local level and providing a continuum of care to the homeless and others with special needs."

The spending plan will also include resources to combat predatory lending, prevent housing discrimination and
continue reforming the homebuying process to eliminate hidden fees paid by consumers.

Martinez also highlighted other parts of the Department's budget proposal and how it will impact Kansas residents:

Expanding Homeownership

During the President's first year in office, the national homeownership rate rose to an all-time high of 67.8 percent.
In Kansas, 72.6 percent of all residents are homeowners. Homeownership among minorities, while also rising to
historic levels, continues to lag far behind the national average. In response, this budget will seek to support President Bush's commitment in the State of the Union address to expand homeownership among all Americans in
the following ways:

• Home Investment Partnership Program (HOME). The budget plan includes $2.1 billion for the HOME program, an increase of $238 million over current year funding. HOME grants to States and localities fund a
  wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income people. Kansas will receive an estimated $17.5 million in HOME funding under the President's proposed budget, an increase of approximately $2.9 million over current funding.
• Self-Help Homeownership Opportunity Program (SHOP). Fulfilling a commitment to triple funding for
  HUD's "sweat equity" programs, President Bush is proposing to increase funding of the SHOP program to $65 million. SHOP grants support nonprofit organizations, such as Habitat for Humanity International, and require low-income families to help construct the homes they will eventually own.
• Housing Counseling Assistance Program. The Administration is requesting a record $35 million, a $15 million increase, for a separate Housing Counseling Assistance Program to low-income families in the coming year.
  Once a set-aside within the HOME Program, these competitively awarded grants are available for Kansas agencies to provide comprehensive counseling services, including pre-purchase, default and renter counseling
  to potential and current homeowners and tenants.
• Section 8 Homeownership Program. HUD permits Kansas housing agencies the flexibility to use HUD's rental assistance to help move 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 downpayment grant equaling up to one-year's worth of their rental assistance.

Providing Affordable Rental Housing

• Section 8 Incremental Vouchers. The FY 2003 budget includes funding for approximately 34,000 additional incremental housing choice vouchers. This increase is nearly double the 18,000 incremental vouchers provided
  in FY 2002 and will help more Kansas families find affordable rental housing.
• Public Housing Operating Fund. The FY 2003 budget proposes to increase the Public Housing Operating
  Fund by $35 million to $3.53 billion, which will provide Public Housing Authorities in Kansas with additional
  support for utility, administration, maintenance and repair costs in public housing facilities.

Stimulating Economic Development and Job Growth

• Community Development Block Grant (CDBG) Program. CDBG provides funding to meet locally identified community and economic development needs. For FY 2003, HUD is seeking to increase CDBG formula grants by $95 million to $4.436 billion. Kansas would receive an estimated $35 million in CDBG funding under the
  President's FY 2003 budget.
• Faith-Based and Community Organizations. In FY 2003, HUD will examine its programs and policies to identify ways to strengthen the capacity of these nonprofit groups in Kansas and to reduce any barriers that may impede their access to HUD funding.
• The Brownfields Economic Development Initiative (BEDI). The BEDI program makes competitive economic development grants for the economic development, redevelopment and remediation of qualified Brownfields projects. Brownfields grants are required to be leveraged with private sector funds. In 2003, the Department
  will award $25 million in grants, the same level that has been made available since 1999.

Protecting Vulnerable Populations

HUD programs provide housing and other essential support to a wide range of people with special needs, including homeless individuals, elderly, disabled persons and people living with HIV/AIDS. Protecting children from the dangers
of lead-based paint hazards in low-income housing is also a focus of the President's budget request. The following
are highlights of HUD's FY 2003 budget in these areas:

• Homeless Assistance Programs. President Bush is proposing to increase funding to HUD's homeless assistance programs to $1.13 billion in the coming fiscal year. Last year, Kansas was awarded $4.8 million in Continuum of Care grants. Under the President's spending plan, the state is also expected to receive an estimated $1.1 million in Emergency Shelter Grant funding next year.
• Elderly Housing and Services. For FY 2003, HUD plans to continue support for the elderly by providing $783 million for the Department's Section 202 Program, which supports elderly housing programs. These are competitively awarded grants, for which Kansas is eligible to apply.
• Disabled Persons. The FY 2003 budget provides $251 million under HUD's Section 811 Program, which gives low-income people with disabilities greater access to affordable housing. These are competitively awarded grants, for which Kansas is eligible to apply.
• Lead Hazard Control and Healthy Homes Initiative. Protecting young children from the potential lifelong effects of lead poisoning is an important focus of this budget request. Funding for lead-based and other home health hazards will increase significantly in the President's budget, from $110 million this year to $126 million in FY 2003. These are competitive grants for which Kansas is eligible to apply.

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