SECRETARY JACKSON TESTIFIES BEFORE HOUSE FINANCIAL SERVICES COMMITTEE ON FY 2006 BUDGET PROPOSAL

WASHINGTON, D.C.- Today, U.S. Department of Housing and Urban Development (HUD) Secretary Alphonso Jackson testified on HUD's proposed budget before the House Financial Services Committee. His remarks are excerpted below:

"Over the past four years, HUD has expanded homeownership, increased access to affordable housing, fought housing discrimination, tackled homelessness, and renewed its commitment to those most in need. HUD's $28.5 billion in net budget authority for FY 2006 seeks to build on our success and lend a compassionate hand to individuals in need, while also using taxpayer money more wisely through government reform.

HOMEOWNERSHIP

"In June 2002, the President challenged the nation to create 5.5 million new minority homeowners by 2010. In 2004, more Americans achieved the dream of homeownership than at any time in our nation's history. Today, nearly 70 percent of American families own their homes - an all-time record. Since the President's challenge, 2.2 million minority families have become homeowners. This represents 40 percent of the 5.5 million goal. As a result, minority homeownership has surpassed 51 percent for the first time in history.

"To remove one of the largest barriers to homeownership - high downpayment costs - the Budget again proposes a new mortgage program. The Zero Downpayment Mortgage will allow first-time buyers with a strong credit record to finance 100 percent of the home purchase price and closing costs. In 2006, this new program could assist more than 200,000 families achieve homeownership.

REFORMING HUD PROGRAMS TO MAKE GOVERNMENT MORE EFFECTIVE

"The FY 2006 Budget will make government a better steward of taxpayer money through reform of the Section 8 Housing Choice Voucher Program.

"In FY 2001, the three Section 8 programs consumed 43 percent of HUD's annual Budget. That percentage has increased to 57 percent in FY 2005. This rate of increase, combined with an extremely complex set of laws and regulations, has resulted in a program that is difficult to sustain.

"In the past, funds were distributed to public housing authorities (PHAs) for a specific number of vouchers, based upon the number of units leased. Congress recently converted this "unit-based" allocation system to a "budget-based" system. However, for the budget-based system to work, program requirements must be simplified and PHAs must have great decision-making flexibility.

"Building on changes in the 2005 Consolidated Appropriations Act, the Administration will submit authorizing legislation to this Committee to implement this reform. This program fulfills an important component of HUD's mission, and I am committed to it, and to its success.

"The President's Budget also proposes a new initiative to consolidate programs such as the Community Development Block Grant program into a more targeted, unified program that sets accountability standards in exchange for the flexible use of funds. This new initiative will be housed within the Department of Commerce.

SERVING THOSE MOST IN NEED

"Through our Budget, HUD will strengthen its efforts to assist those most in need: adults and children from low-income families, the elderly, those with physical and mental disabilities, victims of predatory lending, and families living in housing contaminated by lead-based paint hazards.

"The Administration is committed to ending chronic homelessness, and has aggressively pursued policies to move more homeless families and individuals into permanent housing. The Budget provides a record level of resources for permanent supportive housing for homeless individuals. This Budget provides $1.44 billion for Homeless Assistance Grants - $25 million will go to the Prisoner Re-Entry Initiative."

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