The president’s proposed budget includes $46.7 billion for the Department of Housing and Urban Development, about $1.2 billion more than what Congress approved for fiscal 2014.
Programs designed to help the homeless and those in need of rental assistance would get the biggest boost. The administration proposed about $20 billion for the Housing Choice Voucher program. Those funds would restore cuts imposed on assisted housing units by the 2013 sequestration, and support all existing vouchers. Another $9.7 billion would go toward the Project-Based Rental Assistance Program, slightly less than the previously enacted level.
The president also requested $6.5 billion for preserving affordable public housing and $2.4 billion for Homeless Assistance Grants, slightly more than the levels approved in fiscal 2014 in both cases.
Under a “tough choices” heading, the proposal requests $2.8 billion for the Community Development Block Grant that aims to rehabilitate housing and invest in primarily low-income neighborhoods and $950 million for HOME investment Partnerships Program. That’s $280 million less than previously enacted the previous fiscal year for both initiatives combined. In budget documents, the administration said the cuts will strengthen the “long term viability” of the block grant program.
The budget would provide $15 billion for the Project Rebuild program that helps address blight and in hard hit communities and $60 million for the department’s housing counseling program, a $15 million increase over the 2014 enacted level.
The budget proposal also projected that the Federal Housing Administration, which tapped taxpayer money for the first time in its history last year, no longer needs to reach into federal coffers to shore up its funds.
Just as the last fiscal year ended, the FHA informed Congress that it would draw $1.7 billion from the Treasury to maintain a required cash cushion. The agency said at the time that the $30 billion it had in its reserves would not be enough to cover expected losses for the next 30 years. But Tuesday’s proposal showed no need for taxpayer money in fiscal 2015.
The shortfall was driven mainly by a $5 billion loss in the FHA’s reverse-mortgage program, which allows seniors to withdraw equity from their homes. A jump in mortgage rates in June and higher borrower fees imposed imposed by the agency also cut into the FHA’s revenue by slowing demand for the agency’s loans, administration officials said last year.
The FHA does not make loans; it insures lenders against losses should loans go bad. It has always used the fees it charges borrowers to cover losses.