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HUD Archives: News Releases

HUD No. 98-509
Further Information:For Release
In the Washington, DC area: 202/708-0685Wednesday
Or contact your local HUD officeOctober 21, 1998


WASHINGTON - President Clinton today signed the Department of Housing and Urban Development's appropriations bill into law, giving HUD its best budget in a decade and enacting landmark measures that transform public housing, create housing assistance vouchers for 90,000 families, and enable more families to get FHA mortgages to become homeowners.

In addition to these provisions, all proposed by President Clinton, the $24.5 billion budget bill meets the President's request for increased funding for key HUD programs including: public housing revitalization and capital improvements, Community Development Block Grants, homeless assistance, combating housing discrimination, and the Youthbuild job training program.

The bill also allows HUD to create a new program of homeownership vouchers requested by the President and authorizes HUD to develop a home rehabilitation demonstration program proposed by Congressman Joseph Kennedy of Massachusetts.

President Clinton said: "This Act also makes landmark housing reform a reality. This bipartisan bill will allow more economic integration and deconcentration in our nation's public housing; encourage and reward work; provide protections for those most in need; and put the Nation back into the housing business with the first new housing vouchers in five years."

Housing and Urban Development Secretary Andrew Cuomo said: "This bill is a historic victory for President Clinton and the Democrats who stood firm in support of his policies to transform public housing, expand the supply of affordable housing and increase homeownership. But far more importantly, this legislation is a victory for America's people and communities in greatest need, because it brings them new opportunities to build better futures."

"I would especially like to thank Senator Paul Sarbanes and Congressman Joseph Kennedy for their tremendous work to win approval of this important legislation," Cuomo added.

The legislation will:

  • Transform public housing by reducing segregation by race and income, encouraging and rewarding work, bringing more working families into public housing, and increasing the availability of subsidized housing for very poor families. To deconcentrate poverty, additional moderate-income working families will be admitted to public housing where the poorest residents on welfare are now concentrated. At the same time, the poorest families will be admitted to public housing where families with higher incomes are now concentrated. The final legislation provides that at least 75 percent of Section 8 vouchers go to families with incomes below 30 percent of the area median income - compared with just 40 percent of the vouchers in the earlier version of the bill passed by the House. In public housing, the final bill says that at least 40 percent of newly available public housing units will go to the poorest households (with limited exceptions) - compared with only 35 percent of units (with broad exceptions) under the original House bill. Median family income varies from city to city. Nationally, it stands at $45,300. The legislation also is designed to improve living conditions and reduce crime in public housing. In addition, the bill implements public housing reforms that were proposed by the Clinton Administration to require improved public housing management and increased program efficiency.

  • Create housing assistance vouchers for 90,000 more families with low and moderate incomes though the Section 8 program to enable them to rent privately owned apartments. This is the first increase in vouchers in five years. 50,000 new vouchers will be created for families moving from welfare to work, and 40,000 vouchers will be made available by eliminating a mandatory three-month waiting period to reissue vouchers that go from one family to another. In addition, the bill authorizes another 200,000 vouchers - 100,000 in the year 2000 and an additional 100,000 in the year 2001.

  • Enable more families to qualify for FHA mortgages by raising the limit on home mortgages insured by the FHA (Federal Housing Administration). Until now, FHA insurance could cover mortgage loans ranging from $86,317 in low-cost housing areas to $170,362 in high-cost areas. The legislation increases the loan limits substantially - ranging from $109,032 in low-cost areas to $197,621 in high-cost areas. The higher ceiling on FHA mortgages opens the door to homeownership for thousands of families each year who need FHA insurance to get mortgages but are locked out now because the current ceilings have not kept pace with rising home prices.

  • Revitalize and improve public housing developments with substantial increases in two programs. Funding for the public housing revitalization program known as HOPE VI rises from $550 million last year to $625 million this year - an increase of 14 percent. Under HOPE VI, HUD is replacing decaying public housing with new housing and is also helping residents get education, training and jobs to become self-sufficient. Funding for public housing capital improvements is rising even more dramatically, from $2.5 billion last year to $3 billion this year - a 20 percent increase. Capital improvement funds are used to upgrade public housing, tear down obsolete units, provide assistance to displaced families and build replacement units.

  • Increase funding for Community Development Block Grants from $4.675 billion last year to $4.75 billion this year - a $75 million expansion of the program, which provides flexible federal assistance to help local governments to carry out a wide range of community and economic development activities.

  • Increase funding for homeless assistance from $823 million last year to $975 million this year - an 18 percent increase. HUD's award-winning Continuum of Care Program assists homeless people to obtain health care, job training and jobs, and permanent housing to help them become self-sufficient.

  • Expand fair housing programs that reduce housing discrimination. As part of the President's "One America" initiative, funding for fair housing programs is raised from $30 million last year to $40 million this year - a 33 percent increase. This includes $7.5 million for a new audit-based enforcement initiative proposed by the Administration. HUD will provide funds to local non-profit groups and enforcement agencies to monitor and act against housing discrimination.

  • Expand the Youthbuild Program, which provides on-site training in construction skills, along with academic training, to unemployed high school drop-out ages 16 to 24. Funding is increased from $35 million last year to $42.5 million this year - a 21 percent boost. Youthbuild participants build housing for homeless and other low-income people, and in the process learn construction skills that can land them good jobs.

  • Ceate ar homeownership voucher program that will allow as many as 50,000 families to use their Section 8 rental assistance vouchers to become first-time homebuyers. Under the new program, the same HUD funds now going to help pay a family's rent will instead be used for the family's monthly mortgage payments. Rules for the new program are expected to require each participating family to have income from employment, contribute funds for a downpayment, and receive a mortgage loan from a conventional lending institution.

  • Authorize HUD to develop a home rehabilitation demonstration program under which HUD will provide grants to subsidize interest on loans for home rehabilitation in 10 communities. Grant funds could also be used to help make loan funds available for home rehabilitation by creating revolving loan funds, loan loss reserves and other financial structures. HUD is also authorized to provide technical assistance for home rehabilitation, including counseling and final inspections of rehabilitation work.

Content Archived: January 20, 2009

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