HUD Archives: News Releases

HUD No. 01-038
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In the Washington, DC area: 202/708-0685
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For Release
April 9, 2001


en español

Full Details about HUD's 2002 Budget

WASHINGTON - The U.S. Department of Housing and Urban Development will help more Americans achieve homeownership and better serve communities across the nation with President Bush's proposed 6.8 percent increase in HUD's fiscal year 2002 budget, Secretary Mel Martinez said today.

"This budget helps more people, provides opportunities for Americans in low income communities and provides more support for those with special needs," Martinez explained.

Flanked by two Maryland families soon making the move from renters to homeowners, Martinez revealed specific details of President Bush's proposed $30.4 billion budget, including several key programs that focus on minority home ownership.

"We were living in a one bedroom apartment with the three boys sleeping in one room and me on the couch," explained future homeowner Helena Spencer. "Habitat for Humanity and HUD are making it possible for us to move away from the drugs and the violence."

"This budget provides Habitat for Humanity and organizations like Habitat with additional resources to help more families," Martinez said.

"We want to give as many Americans as possible a stake in their neighborhood and a concern for its future," Martinez said. "The sad fact is only 46 percent of Hispanic and African American families own their own homes. And we must do better."

The President's budget includes a Renewing the Dream tax credit to encourage investors to develop housing for low-income families. This tax credit will help build 100,000 new homes in low-income areas over the next five years.

This budget also adds a new initiative called the American Dream Down Payment Fund, to help low-income people with their down payment on a home of their own. By putting $1 billion into the American Dream Fund over the next five years, HUD's goal is to make owners of 650,000 low-income families.

HUD will also offer assistance to low-income renters who want to become homeowners by expanding the use of Section 8 vouchers for home ownership. "Bringing the pride of home ownership to more and more Americans is definitely one of the goals of this budget," Martinez added.

Martinez also highlighted other parts of the budget proposal:

Gives More Families the Opportunity for Homeownership

  • Proposes Hybrid Adjustable Rate Mortgages. For fiscal year 2002, HUD will seek authority to allow FHA to offer families a hybrid adjustable rate mortgage, reducing families' initial homeownership costs by combining a low fixed rate in the early years with a rate that later adjusts with the market.
  • Proposes to raise FHA Multifamily Loan Limits by 25 percent. The loan limits were last increased in 1992. A 25 percent increase, when combined with the existing ability to multiply loan limits by up to 240 percent, will mean that FHA multifamily insurance will be available to help increase production in virtually every region of the country.

Increases Support for Low-Income Rental Housing Assistance

  • Adds $197 million for 34,000 additional Section 8 housing vouchers. The President's budget renews all expiring contracts with landlords at a cost of $15.1 billion to continue providing rental assistance to more than 2.8 million families currently receiving Section 8 assistance, and includes $197 million for 34,000 new housing vouchers.
  • Increases Public Housing operating subsidies by $150 million. The President's budget funds the Public Housing Operating Fund at $3.38 billion, or $150 million more than 2001, to help public housing authorities cover utility rate increases and other high priorities.

Provides Additional Support to Populations with Special Needs

  • Adds $20 million to house 3,700 additional people with AIDS. The budget provides an additional $20 million for a total of $277 million to house 3,700 more people with AIDS, expanding the number of eligible jurisdictions based on projections of AIDS cases by the Centers for Disease Control and Prevention.
  • Provides $20 million for a Presidential initiative to improve access for the disabled. The budget provides $20 million in the Community Development Block Grant to fund competitive grants to civic, community and religiously affiliated organizations exempt from the Americans with Disabilities Act to make approximately 200 additional facilities accessible to the disabled.

Improves Conditions and Opportunities in Low-Income Communities

  • Contains $80 million for a Presidential initiative for Community Technology Centers. The budget provides $80 million in the Community Development Block Grant program to fund competitive grants to help communities create or expand technology centers in high poverty areas and provide technical assistance to those centers.
  • Increases funding to reduce lead paint hazards by $10 million. The budget provides an additional $10 million for a total of $110 million that, when combined with increased private sector leveraging, supports a ten-year strategy to eliminate lead paint hazards in 2.3 million private housing units occupied by low-income children.

Martinez said the budget proposal also refocuses HUD on its core mission and ends duplicative programs in the Federal government.

"As with every budget there are tough choices,� Martinez said. �We chose to eliminate programs that were duplicative. Eliminating a federal program is always going to be unpopular with someone but we will not shy away from smart cuts for the sake of popularity.�

Eliminates Funding of One-Time Projects in Block Grant Programs

  • Reduces earmarks for special projects within CDBG by $411 million. The budget continues Community Development Block Grant formula funding at the 2001 level of $4.4 billion, but does not provide recurring funding for $411 million appropriated in 2001 for earmarked projects. The net reduction to the program is only $311 million from the 2001 level.

Focuses HUD on its Core Mission and Ends Duplicative Programs

  • Terminates the $309 Million Public Housing Drug Elimination program. The fiscal year 2002 budget proposes to consolidate and streamline the Department's anti-drug use activities. Public housing authorities can currently use funds from the Public Housing Operating Fund program, the Capital Fund program and the Drug Elimination Grant program for anti-drug use and anti-crime activities. The Operating Fund program has been increased by $150 million for these activities and other purposes, as decided by local priorities. Housing authorities will be encouraged to continue major partnerships with local police departments. In addition, the Department will continue to work closely with other Federal agencies such as Justice, Health and Human Services and the Office of National Drug Control Policy to administer proven drug prevention and intervention programs, and with faith-based organizations that also provide treatment and counseling.
  • Terminates the $25 million Rural Housing and Economic Development program. The budget terminates the Rural Housing and Economic Development program, which began in 1999, because it duplicates several programs including CDBG and those of the U.S. Department of Agriculture.
  • Reduces by $700 million the Public Housing Capital Fund. The $2.3 billion requested for the Public Housing Capital Fund fully funds new capital needed for public housing, but is $700 million below the 2001 level. Public housing authorities can address the backlog of capital needs by using more than $6 billion in unspent balances from prior years, $3 billion from the 2001 appropriation and $574 million in HOPE VI funding and regulatory tools to demolish severely distressed units that represent a disproportionate share of the backlog.

Martinez explained that the new budget also addresses the challenges of today and tomorrow by focusing more resources on fighting housing discrimination, protecting vulnerable populations, making housing affordable and increasing home ownership.


The entire budget summary is available on HUD's web site
Content Archived: March 26, 2010