HUD Archives: News Releases
February 4, 2002
$31.5 Billion HUD Budget Expands Homeownership Opportunities, Rental Assistance, and Economic Development
WASHINGTON - President Bush's proposed Fiscal Year 2003 budget includes $31.5
billion for the Department of Housing and Urban Development to help more Americans
become homeowners, to provide additional rental assistance, to protect vulnerable
people, and to stimulate economic development and job growth across the nation.
This budget request 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. The Administration
recognizes homeownership is not an option for everyone therefore 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
"This budget will open the door of homeownership to more and more Americans
and offer rental 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 also includes resources to combat the practice of 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:
During the President's first year in office, the national homeownership rate
rose to an all-time high of 67.8 percent. Homeownership among minorities, while
also rising to historic levels, continues to lag far behind the national average.
In response, this budget will seek 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.
- Renewing the Dream Tax Credit. To further promote homeownership opportunities,
the Administration is proposing a $1.7 billion tax credit to support the rehabilitation
or new construction of an estimated 100,000 homes for purchase by low-income
households over a five-year period.
- 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, like Habitat for Humanity
International, which requires 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 will provide comprehensive
counseling services including pre-purchase, default and renter counseling
to potential and current homeowners and tenants.
- Section 8 Homeownership Program. HUD permits local housing agencies
the flexibility to use HUD's rental assistance toward moving 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. Although
HUD currently assists nearly 2 million families under the Section 8 tenant-based
program, the number of those in need of assistance remains far greater. To
help reduce the backlog of families on the waiting list, HUD is requesting
that Congress provide an additional $204 million to increase the number of
tenant-based vouchers by 34,000. This increase is nearly double the 18,000
incremental vouchers provided in FY 2002.
- Section 8 Contracts. As long-term Section 8 contracts expire, the
number of contracts that need to be renewed each year (and the funding required
to do so) increases. The cost of renewing the 2.9 million expiring Section
8 contracts in FY 2003 exceeds FY 2002 renewal costs by $1.1 billion.
- Public Housing Operating Fund. The FY 2003 budget proposes to increase
the Public Housing Operating Fund by $35 million to $3.530 billion, which
will provide Public Housing Authorities with 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 will increase CDBG formula grants by $95 million to $4.436 billion.
- 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 and to reduce any barriers that may impede their access to
- Colonias Gateway Initiative. The 2003 budget proposes $16 million
for a new Colonias Gateway Initiative (CGI). The CGI is a regional initiative,
focusing on the 1,500-mile stretch of the U.S.-Mexican border where more than
12 million individuals live, often in severely substandard conditions.
- Section 108 Loan Guarantee Program. In 2003, the Department will
provide $6.3 million in credit subsidy to guarantee a total of $275 million
in private sector loans.
- National Community Development Initiative (NCDI). HUD participates
in the privately organized and initiated NCDI. The 2003 budget will provide
$30 million for the NCDI, in which HUD has funded three phases of work since
1994. A fourth phase will emphasize helping community-based development organizations
build capacity in the economic arena and related community revitalization
activities through the work of intermediaries, the Local Initiative Support
Corporation (LISC) and the Enterprise Foundation.
- 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, the elderly, persons
with disabilities 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. In addition, President Bush is proposing to transfer the $153
million Emergency Food and Shelter Program (EFSP) that is currently
administered by the Federal Emergency Management Agency (FEMA) to HUD.
- 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 that supports elderly housing programs.
- Persons with Disabilities. The FY 2003 budget provides $251 million
under HUD's Section 811 Program that improves access to affordable
housing for low-income persons with disabilities.
- Persons with HIV/AIDS. In FY 2003, HUD will increase funding for
the Housing Opportunities for Persons with AIDS (HOPWA) program by
$15 million to $292 million. This will support an increase in the number of
jurisdictions eligible for funding based on projections from the Centers for
Disease Control and Prevention.
- 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.
Content Archived: April 9, 2010