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CUOMO ANNOUNCES PROGRESS BY HUD IN FHA PERFORMANCE, MANAGEMENT REFORM, AND NATIVE AMERICAN HOUSING
WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo told a Senate committee today of progress by HUD in improving the performance of the Federal Housing Administration, implementing management reform, and consolidating housing assistance for Native Americans. Appearing before the Senate Appropriations Subcommittee on Veterans Affairs, HUD and Independent Agencies, Cuomo:
FHA AUDIT AND ACTUARIAL REPORT
Cuomo said the favorable audit and actuarial report on FHA "are a vote of confidence in the FHA that strengthens our commitment to building strong, viable communities through increased homeownership. A healthy FHA Insurance Fund saves taxpayer dollars and ensures that HUD will continue to play a vital role in helping more hardworking families achieve the American Dream."
By approving the audit, KPMG, Peat Marwick LLP has for the fifth consecutive year provided a "clean opinion" of FHA's financial statements, attesting to its confidence that the statements reflect accurately the FHA's cash flows, financial position, and results of operation.
In addition, FHA continued to contribute to the rise in homeownership among first-time homebuyers, with 76 percent of new loans insured in 1997 going to new homeowners. Cuomo said that FHA's success and strong Fund are clear indications that the Department's proposal to raise the FHA loan limit to $227,150 would provide an even greater boost to homeownership.
The audit noted that HUD has made significant progress toward developing processes to effectively manage its current insured portfolio and inventory of notes and properties while continuing to serve the needs of the housing market; implemented an oversight tool that will help identify troubled and potentially troubled housing projects; and reached an agreement with the Department of Health and Human Services that will help increase FHA's ability to manage individual facilities in its $5 billion hospital portfolio. These additional indicators were cited in the audit attest to FHA's improved financial health:
Cuomo said the legislation repealing and streamlining 81 HUD programs will help move the HUD 2020 Management Reform Plan forward. The Management Reform Plan states it aims to transform HUD from "the poster child for inept government" that "has been plagued for years by scandal and mismanagement" into "a new HUD, a HUD that works."
"HUD 2020 is a historic effort to modernize and streamline our operations, improve performance, increase efficiency and fight waste, fraud and abuse," Cuomo said. "Our management reform plan is helping to transform HUD to better serve America's people and communities with improved business practices."
HUD has been criticized by Congress and its Inspector General since 1980 for failing to modernize operations and fight waste, fraud and abuse. The General Accounting Office designates HUD as the only "high risk" agency in the federal government.
NEW ERA IN INDIAN HOUSING
Cuomo also announced the publication of the final rule that implements the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA). NAHASDA reorganizes the system of federal housing assistance provided to Native Americans by consolidating housing assistance programs into a single, formula block grant.
The new program, called the Indian Housing Block Grant (IHBG), was designed specifically for the unique circumstances and housing challenges of Native American communities. To be eligible for IHBG funds, a tribe must develop both short-term and long-term plans that describe the communities' housing needs, financial resources, affordable housing activities and the manner in which IHBG funds will be used. By engaging in both short-term and long-term planning, and relying on community input, tribes can now be proactive in developing a vision for housing in their own communities.
The Department is also making interim funding available to the Tribes, where necessary, to meet current operational needs. The interim funding will enable Indian Housing Authorities to meet their program needs while finalizing their initial applications for block grant funds.
Tribes will receive assistance based on the need for housing within the tribal communities and on the cost to operate and maintain existing federally subsidized housing. Grants are provided directly to Indian tribes or their tribally designated housing entities.
Under NAHASDA, Indian Nations are encouraged to expand housing opportunities by leveraging IHBG funds with an array of private and public funding sources.
The final rule for NAHASDA is the result of a cooperative negotiated rulemaking process where HUD and the Tribes resolved a broad range of issues including: Indian preferences, environmental review procedures, conflict of interest concerns, use of interest income, enforcement and compliance, formula determinations and the method by which funds are distributed.
Content Archived: January 20, 2009