March 3, 2004
WEICHER AND LIU HIGHLIGHT HUD'S CONTINUED EMPHASIS ON AFFORDABLE HOUSING AND STRONGER COMMUNITIES DURING BUDGET HEARING
Three fourths of HUD's budget dedicated to rental housing assistance
WASHINGTON - In testimony today before the House Appropriations Committee, John C. Weicher HUD's Assistant Secretary for Housing and Federal Housing Commissioner and Assistant Secretary for Public and Indian Housing, Michael Liu, discussed the specifics of the Agency's $31.3 billion fiscal year 2005 budget. While three-fourths of the budget proposal is dedicated to rental housing, HUD is also continuing its efforts to promote affordable housing and strengthen communities.
"This budget shows just how committed this Administration is to the people and places who need help," said Weicher. "Whether it's promoting homeownership and affordable housing or serving our most vulnerable citizens, the resources we are requesting signal a strong investment in neighborhoods throughout America."
Increasing Homeownership and Affordable Housing Opportunities
HUD remains committed to increasing homeownership, particularly among minority families. Census data continues to shows that while nearly 70 percent of all American households own their own homes, less than half of African-American and Hispanic families are homeowners. Intent on closing this "homeownership gap," President Bush announced "America's Homeownership Challenge," committing the nation to adding 5.5 million minority homeowners by the end of the decade. In fact, more than 1.6 million new minority homeowners were created in the United States since June of 2002 when the challenge was issued. HUD is proposing the following initiatives to increase homeownership and affordable housing opportunities for low-income Americans:
- Zero Down Payment Mortgage. HUD is seeking legislation to offer
a new NO DOWN PAYMENT mortgage product to help an estimated 150,000 families
a year to purchase their first home. Currently FHA requires at least a three
percent down payment.
- American Dream Downpayment Initiative. For the third consecutive
year, HUD's spending plan includes $200 million for the American Dream Downpayment
Initiative to help tens of thousands of low-income families a year to become
- HOME Investment Partnerships Program (HOME). HUD is proposing more
than $2 billion for the HOME program to be allocated to 630 state and local
governments. HOME funds encourage the production of affordable housing by
financing the cost of land acquisition, new construction, rehabilitation,
downpayment assistance and rental subsidies.
- Housing Counseling. The budget includes a record $45 million to
support 550,000 families with home purchase and homeownership counseling and
about 250,000 families with rental counseling. In the past three years, the
Bush Administration has more than doubled funding to this program.
- Flexible Voucher Program. HUD is proposing sweeping reform of the
nation's rental assistance voucher program that will give local housing officials
the flexibility they have long requested to better address their local needs
and potentially serve more families. The new Flexible Voucher Program (FVP)
will allow public housing authorities (PHAs) to set rents using local rental
market data. Giving local officials the authority to use local rental market
data will stop the spiraling cost of the Housing Choice Voucher Program. The
Flexible Voucher Program will lead to significant cost savings to the voucher
program and will provide performance-based incentives for PHAs to serve more
families presently waiting for rental assistance.
- Public Housing Operating and Capital Funds. HUD seeks $3.6 billion
to fund local public housing authorities in their daily operation. In addition,
the FY 2005 budget will provide nearly $2.7 billion to help local public housing
authorities fund major repairs and modernizations in their housing units.
Also in 2005, up to $55 million will be targeted for the Resident Opportunity
and Self-Sufficiency (ROSS) program that provides supportive services and
assists public housing residents in becoming economically self-sufficient.
- Flexible Voucher Program - Homeownership. HUD is also encouraging
local housing agencies to use rental assistance vouchers 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 down payment
grant equaling up to one-year's worth of their rental assistance.
- Single-Family Affordable Housing Tax Credit. To stimulate the production
of affordable homes in distressed communities where such housing is scare,
the Administration will again propose a tax credit of up to 50 percent of
the cost of new construction or rehabilitation. This tax credit targets low-income
households earning less than 80 percent of an area's median income.
- Self-Help Homeownership Opportunity Program (SHOP). President Bush is renewing his request for $65 million to fund so-called "sweat equity" homeownership programs. This proposal would provide grants to support nonprofit organizations like Habitat for Humanity, which requires low-income families to help construct the homes they will eventually own. These funds will help produce approximately 5,200 new affordable homes nationwide.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov .
Note to editors: For a more detailed summary of HUD's budget.