To: Interested Parties
From: Julián Castro, Secretary, U.S. Department of Housing and Urban Development
Date: December 23, 2014
Re: HUD's 2014 Year in Review and 2015 Look-Ahead
We call HUD the Department of Opportunity because its mission to both provide housing assistance and revitalize communities by laying a strong foundation for millions of Americans to achieve their dreams. In the past year, the Department has made significant strides on critical Obama Administration priorities while bringing renewed focus on HUD as a smarter, more efficient agency that focuses on enhancing opportunity for hard-working Americans.
As we enter the New Year, I'm happy to report that HUD achieved notable progress in 2014 on a number of priority issues, including:
- A 33 percent reduction in veteran homelessness since 2010, according to the national point in time survey conducted by HUD, VA, and the U.S. Interagency Council on Homelessness (USICH). This includes a 43 percent drop in the number of veterans sleeping on the street nationally, and the effective end of chronic veteran homelessness in Phoenix and Salt Lake City.
- The successful leveraging of private investment to rebuild the nation's public housing stock through HUD's Rental Assistance Demonstration (RAD) program. The first 57 RAD deals have raised $437 million in private financing—a ratio of $19 in private funding for every $1 in public funding—for the renovation of 7,500 public housing units. Overall, public housing authorities have submitted 187,000 units for this demonstration, but Congress previously capped the number of participating units at 60,000.
- The turnaround of the Federal Housing Administration's (FHA) Mutual Mortgage Insurance (MMI) Fund, which grew by $6 billion in value in 2014 only a year after falling into the red. The fund now stands at $4.8 billion thanks to aggressive policy actions that led to a 14 percent drop in delinquency rates and a 16 percent improvement in recovery rates since 2013.
- Notable progress in providing access to credit for responsible homebuyers who are underserved by the private market. In the first half of FY2014, 52.5 percent of FHA loans involved borrowers with a credit score under 680, up from 45.5 percent in 2013 and 40 percent in 2011.
- Significant accomplishments in combating housing discrimination. In FY2014, HUD and its fair housing partners obtained relief for more than 19,700 persons alleging discrimination under the Fair Housing Act, a 120 percent increase from FY2013. HUD led efforts in protecting victims of sex discrimination including a $5 million settlement with Wells Fargo resolving allegations of maternity leave-related lending discrimination. HUD also conducted unprecedented work to protect survivors of domestic violence in their housing.
- As part of the Administration's effort to update or do away with outdated regulations to reduce burden, HUD has made a 10.6 percent reduction in obsolete and expired regulations, which exceeds the Administration's goal of 5 percent.
- The continued emergence of Ginnie Mae as a stabilizing force in the secondary housing market. In 2014, Ginnie Mae saw its mortgage-backed securities portfolio top $1.5 trillion for the first time in history.
- HUD completed the transfer of responsibility for the Sandy Program Management Office to FEMA in November 2014. The Sandy PMO tracks interagency progress on spending Sandy supplemental funding and accomplishing recommendations of the Hurricane Sandy Rebuilding Strategy. To date, more than three-quarters of those recommendations have been completed.
- The launch of the National Disaster Resilience Competition which allows communities that have experienced natural disasters to compete for nearly $1 billion in funding to help them rebuild and increase their resilience to future disasters.
- The launch of new place-based initiatives to strengthen the middle class, create jobs and engage local leaders in a holistic fashion to advance opportunity in cities across America. In 2014, HUD named seven new locations to receive technical advice and expertise through the Strong Cities, Strong Communities (SC2) initiative and oversaw the opening of the competition for a second round of Promise Zone designations.
2015: Building a Stronger HUD
As we approach 2015, HUD will remain focused on enhancing opportunity in communities across America while seeking internal reforms to improve employee morale and performance. Since September, HUD's senior leadership has held three meetings designed to enhance transparency, refine policy and operational priorities, raise standards and emphasize accountability so that every employee is able to succeed in the true spirit of public service. We expect this internal transformation to accelerate in the coming year with the confirmation of Nani Coloretti as HUD's new Deputy Secretary.
On the policy side, we know that we are operating in a time of limited budgets and legislative challenges. We need to be smarter and more creative than ever before. We will see through our commitment to end veteran homelessness and increase Promise Zones as well as explore some new ideas including expanded broadband access.
Challenges and Opportunities in 2015
In addition to specific policy initiatives, HUD will push to implement a number of existing programmatic, legislative and regulatory proposals to create efficiencies, streamline processes and save taxpayer dollars. They include:
- Rental Assistance Demonstration (RAD) - The Rental Assistance Demonstration allows public housing units to convert to a new, more sustainable financing mechanism by leveraging private funding to make much needed capital improvements to publicly owned projects. Overall, public housing authorities have submitted 187,000 units for this demonstration. Congress recently raised the cap on the number of participating units from 60,000 to 185,000. The Administration's ultimate goal is to have the cap eliminated so that billions of dollars of private investment can be used to renovate and revitalize public housing.
- Housing Finance Reform (HFR) - HUD and the Administration welcome bipartisan legislation (The Housing Finance Reform and Taxpayer Protection Act (S. 1217)) that will reduce the exposure of taxpayers and risk to the nation's mortgage finance system while helping responsible citizens to access the American Dream.
- Tribal Veterans Affairs Supportive Housing (VASH) - The Tribal VASH program brings the successful HUD-VASH program to veterans living in Indian Country. HUD requested and Congress approved in the FY2015 Appropriations bill the necessary language to offer voucher assistance to tribal communities. HUD-VASH combines housing choice vouchers with critical supportive services from The Department of Veterans Affairs and is a key component of the Administration's effort to eliminate veteran homelessness by 2016. According to the 2012 Annual Homeless Assessment Report, American Indians and Alaska Natives made up 3.2 percent of the homeless population, but just 1.2 percent of the total U.S. population.