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HUD No. 98-21
Further Information:For Release
In the Washington, DC area: 202/708-1420Wednesday
Or contact your local HUD officeJanuary 28, 1998

CUOMO DELIVERS $2.6 MILLION IN ASSISTANCE FOR BALTIMORE HOMELESS PROVIDERS
Touts Clintonís Commitment to Record Level of Homeless Funding

BALTIMORE Ė Housing and Urban Development Secretary Andrew Cuomo today presented more than $2.6 million in critical homeless assistance funding to five Baltimore-area providers, a step he called a further indication of the Clinton Administrationís commitment to helping more homeless Americans find housing and become self-sufficient. Following on the Presidentís State of the Union Address last night, the Housing Secretary said that the Presidentís proposal of a record increase in funding for efforts to combat homelessness will be a key element of the Administrationís FY 1999 urban agenda.

Appearing with U.S. Senator Paul Sarbanes, Congressman Elijah Cummings and Baltimore Mayor Kurt Schmoke at a model, HUD-funded housing facility for formerly homeless individuals, Cuomo said that President Clinton's budget will call for a record $1.15 billion in federal funds to support the Continuum of Care homeless assistance initiative. While past efforts to help homeless people focused on emergency shelters, Cuomo said that the Continuum of Care is designed to meet both emergency and long-term needs of homeless Americans, to help them get jobs and build independent lives.

"These funds serve a critical need in communities like Baltimore," Cuomo said. "Today we are announcing funding to keep important Baltimore-area programs going and the Presidentís commitment to helping even more community-based efforts like these in the years to come."

"We arenít just spending more money on homeless programs Ė we are spending money more effectively and more wisely and we are doing a better job both for homeless people and for the American taxpayer," Cuomo said.

The five homeless grantees receiving 2 year funding of $2,628,271 today are: Housing Assistance Corporation, $438,701; Mercy Medical Center/Baltimore City Office of Homeless Services, $498,737 and $362,317 (two grants); Baltimore Office of Homeless Services, $1,050,701; and Associated Catholic Charities, $277,815. Cuomo presented ceremonial checks to the agencies and Mayor Schmoke after a tour of Paca House, a 106 unit single-room occupancy facility serving formerly homeless individuals, including the elderly, persons with disabilities and residents with HIV/AIDS. Without these grants, funding for these homeless services would have ended during 1998. Todayís funding allows these programs to continue through at least the year 2000.

The President will request $1.15 billion in homeless assistance Ė including $923 million for aid to localities for their own homeless assistance programs and $192 million in rental assistance vouchers under HUD's Section 8 program to make 34,000 apartments available to homeless Americans. In FY 1998, homeless assistance funding was $823 million.

Under the Clinton Administrationís Continuum of Care approach, communities devise local plans to not only provide homeless people with emergency, transitional and permanent housing, but to fund local programs including job training, child care, substance abuse treatment and mental health services. The grants are administered by local governments and non-profit homeless providers across the nation.

"Under President Clinton's leadership, America for the first time is doing more than addressing the symptoms of homelessness -- we are addressing its causes," Cuomo said. "Instead of just giving homeless Americans a hand-out, we are giving them a hand up -- a second chance to reach for the American Dream through hard work and determination."

A Columbia University study concluded a year ago that HUD's Continuum of Care homeless policies "have had a positive impact on communities across the nation" and were an improvement from past efforts that focused on short-term emergency shelter.

In addition to the increase in homeless assistance, Cuomo said that the Clinton Administration will propose a series of new HUD initiatives to Congress next week to enable the Department to better serve the American people. Below are summaries of some of the initiatives already announced by the White House.

FHA LOAN LIMITS

President Clinton is calling for a major new initiative to help millions more hard-working middle-class American families qualify to become homeowners, by lifting the $86,317 limit now covering most FHA-insured home mortgages. The higher ceiling on FHA mortgages will open the door of homeownership to millions of American families locked out. For example, a family with an income of about $46,000 could qualify for an FHA mortgage of $150,000 (the expected average of new loans insured under the new initiative).

In all, about 3 million more families could qualify for FHA mortgages over the next five years -- and millions more in future years. Currently, in over 2,000 counties around the country, FHA mortgages are limited to $86,317. In about 100 high-cost counties, FHA can now insure mortgages up to $170,362. The President is seeking to set a new nationwide limit of $227,150. .

The new proposal will return FHA to its historic role as the driving force for homeownership across the nation. Because FHA loan limits have failed to keep up with rising home values, the agencyís share of home mortgage volume has declined dramatically over the years. In 1970, FHA accounted for 24 percent of home mortgage volume, but by 1996 FHAís share had plummeted to just 10 percent.

The higher loan limits would particularly benefit Americans traditionally underserved by mortgage lenders. For example, over 70 percent of FHA home loans go to first-time homebuyers Ė the group that has the most difficulty coming up with mortgage downpayments.

In addition, FHA disproportionately serves minorities, inner city residents, single heads of households and others who have the most difficulty qualifying for mortgages and have the lowest homeownership rates. Because the FHA mortgage insurance protects lenders from losses, it enables millions of Americans who would otherwise have been unable to qualify for mortgages to get the loans and become homeowners.

FAIR HOUSING ENFORCEMENT

President Clinton is calling for a $22 million budget increase for HUD to intensify the fight against housing discrimination. The increase would boost funding for HUDís Office of Fair Housing and Equal Opportunity to $52 million from the current $30 million -- a 73 percent increase. The initiative is a primary element of the Presidentís "One America" policy to bring Americans together.

The $22 million increase sought by the President would be used to: increase HUD funding to state and local fair housing groups around the nation to combat housing discrimination; create a national Fair Housing Rights Education Campaign to inform Americans about their legal rights and responsibilities under the Fair Housing Act; provide funding in 20 communities to measure the extent of housing discrimination; help over 50 local fair housing and other non-profit groups remove barriers to fair housing; and increase coordination of fair housing enforcement activities between local governments and private organizations.

Housing discrimination is illegal, intolerable and has no place in our present or our future. The 73 percent increase in funding for HUDís fair housing programs will help us do more to protect the right of every American family to live and raise their children in any neighborhood they can afford.

WELFARE TO WORK VOUCHERS

President Clinton is calling for $283 million in budget authority to create 50,000 rental assistance vouchers to help more Americans move from welfare to work. The Presidentís budget will ask Congress to create the vouchers for use by people who are on welfare or have been on welfare in the past year, and need the rental assistance to enable them to get or keep jobs. Under the Presidentís proposal, the new vouchers would be awarded on a competitive basis to local housing authorities around the country. Housing authorities would have flexibility to decide how to select new voucher recipients from among eligible current and former welfare recipients.

Targeting new vouchers to help families move from welfare to work is a sound investment. It rewards men and women who are willing to work hard to climb out of poverty under their own power. The new vouchers would help poor people who are unable to get jobs or able to get jobs only with great difficulty because they lack cars or mass transit to commute to workplaces far from their homes. With vouchers, these people could rent housing on the private market and live closer to available jobs. Currently, about two-thirds of new jobs are being created in the suburbs, but three out of four welfare recipients live in rural areas or central cities.

Content Archived: January 20, 2009

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