Fiscal Year 2002 Budget Press Conference
Monday, April 9, 2001
Additional Proceedings with Mr. Woodson, Mr. Ventrone, and Mr. Gibbons.
MR. WOODSON: Hi, good morning. My name is Rob
Woodson. I'm Deputy Chief of Staff for Policy and Programs here
at the Department. I'd like to bring up a couple of my colleagues,
and we'll be able to answer any of your detailed questions you may
have. This is Joe Ventrone, Special Assistant here at HUD, Dave
Gibbons, who is our budget director. We'll be happy to answer any
Q: As part of your budget, you want to increase
the loan limits on multifamily housing, but at the same time, you're
increasing the insurance premiums from, like, 50 basis points to
80 basis points. Do you guys have any idea -- like, is this going
to increase housing production, or is the insurance cost going to
make it so that some of these people aren't going to want to pay
A: Brian, I think you had two questions there.
First, the premium increase for the multifamily. First of all, the
multifamily mortgage limit increase of 25 percent. We estimate that
the increase in the multifamily limits will generate approximately
300 million more in multifamily activity. That's an estimate as
good as we can figure. The fiscal year 2002, our multifamily credit
subsidy goes from 101 million to 15 million for the credit subsidy.
And to meet that gap, the budget proposes increasing the premiums
on certain of the General Insurance Special Risk Loans. And I believe
the premium increase would be around 30 basis points, from .5 to
.8. And that will make us less dependent on the credit subsidy annual
appropriations that, over the last 5 or 6 years, has been somewhat
problematic. We do not believe the increase in the premium will
necessarily inhibit further activity under the program.
SPEAKER: Well, because currently, interest
rates are very low. So, there shouldn't be a problem. Yes?
MR. SHERWOOD: Two questions. One, is the HUD
budget -- my name is Wayne Sherwood. Is the HUD budget going to
rely in any way on recaptures? And if so, how much and from where?
And the second question is, the utility costs in public housing
have gone up enormously. And as I understand it, looking at the
operating fund, there's no recognition of that. So, how are they
expected to cope with that?
A: Well, okay. On your first question. The
budget does not rely on any kind of recaptures. Okay? If we get
them, we get them. But they're not predicated upon them occurring.
Second, regarding the --
MR. SHERWOOD: Operating fund?
A: Operating fund, yes.
MR. SHERWOOD: Actually, the operating fund
was increased by $150 million, and that is 100 percent of our PFS.
A: Also, HUD released I believe it was $105
million earlier this year, so that -- and that's immediate relief.
You know, normally, they'd have to wait till their appropriation
next year -- or this year, rather. We gave them $105 million in
immediate relief in March. I'm sorry. Yes.
Q: Yes, on the multifamily loan insurance increase,
you said that you expect that will spur about 300 million. What
does that mean in the sense of units? A: Hard to say. I don't have
a figure. We can get you the figure. And I'm trying to reflect what
our multifamily activity was in this last fiscal year. But we'll
have to get you that information.
Q: According to the outlays by Agency table
in the larger budget, actual outlays will drop 2.5 billion between
2001 and 2002. And I was just wondering what would account for that
based on --
A: That's a -- excuse me. That's the spend
out of prior year appropriations, which had built and is now coming
down to the normal.
Q: Going back to the multifamily, because people
are talking about on the credit subsidy for this year is probably
going to maybe run out early summer, or something like that. Are
you guys already asking for more of a credit subsidy this year to
keep it going?
A: To the best of my knowledge, the administration
is not going to be asking for any supplemental appropriation this
year. Brian, it is right that our credit subsidy needs for this
fiscal year are fast approaching. And we're kind of on a limited
diet to get us through at least to the summer. But I believe we
have a balance, Dave, of what? Twenty --
MR. GIBBONS: About 18 now. A: Eighteen million,
and that was based on an 101 appropriation. And I think we've got
to put it in perspective. When the new administration came here,
most of -- a good 50 percent of that was already exhausted. There's
also -- and if I could anticipate your follow-up question, Brian,
you're going to probably ask that the previous Congress appropriate
40 million in emergency supplemental for credit subsidy? Okay. That
was -- this administration does not view that 40 million for this
credit subsidy program an emergency nature. And the way the Congress
appropriated it, and the way it was enacted by the previous President,
that money did not have to be offset. So, this administration does
not acknowledge that 40 million as emergency. So, we've been dealing
with our Office of Housing. We've been working with the industry
to ensure that the money that we do have available, would be able
to get us through this fiscal year.
Q: So, there's going to be rationing of commitments?
A: I don't know. We don't call it rationing.
We -- Dave, what's the technical term?
MR. GIBBONS: We have allotted -- distributed
the allotment through the rest of the year on a monthly year.
A: Right. OMB would apportion monthly the available
credit subsidy. And I believe it's close to 2.8 million a month.
MR. GIBBONS: It started out to be two and a
half. We're going to frontload some of that in to the next couple
of months, because there's stuff in the queue that needs to get
taken care of. And then there will be a little bit less. But there
will be some funds in every month.
Q: Okay. Thanks.
MR. WOODSON: Anything else?
Q: Do you anticipate running out of credit
subsidy authority to ensure reverse mortgages to seniors?
A: For this year? No, we don't. No.
MR. WOODSON: What he said.
A: No, we don't.
Q: Is there more detailed information available
on the unspent funds in the Public Housing Capital Fund; i.e., where
the bottlenecks are, what kind of programs are letting the money
A: I'm not sure I understood your question.
MR. WOODSON: Yes. There's a total of around
A: Yes. $3.2 billion, plus 2001's funds that
have yet to go out. They're going out very shortly. Those are all
unobligated funds. There's another --
Q: It's all unobligated.
A: It's all unobligated by the PHAs. There's
another $5 billion, which is -- PHAs have, and have assigned to
projects, but the projects haven't been done yet.
Q: So it's3.2 unobligated, 5 billion obligated?
A: 3.2 in prior year appropriations. That's
19 -- basically, 1996 through the year 2000. Those are funds are
out there, and they're with the PHAs, and they have not been assigned
to projects yet.
MR. WOODSON: Anybody else?
Q: In the Senate budget resolution, I think
there's a clause that says -- that would stop Congress from making
advance appropriations. And I was wondering how that might affect
HUD's budget. What happens if they make it retroactive somehow?
A: Well, they can't make it retroactive. But
they -- for 2002, they are eliminating the advance appropriation.
And for HUD, the advance appropriation would have been $4.2 billion.
They paid for that by one-time cost on the mandatory side of the
Q: That's in the budget resolution?
A: It's in our budget proposal, and I believe
-- it should be in the Senate. And I haven't seen the Senate resolution,
but it's definitely in the House and it should be in the Senate.
There was a three-way agreement between OMB and the Congress and
CBO and the House and Senate Budget committees to eliminate that
Q: Oh, okay. Does it come from FHA, or from
mandatory funds? Where does it
A: No. That advance appropriation occurred
in the year 2000. And it was all Section 8. And they are now removing
that. For HUD, that's very good news, by the way. Because it was
very difficult to administer contracts with project owners when
you had a split in when they could get their funds.
Q: Um-hum. Okay, thanks.
MR. WOODSON: Anyone else? Okay. If no further
questions, I think that will conclude the press conference on the
Thank you very much for coming.
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