For other versions of this document, see http://wikileaks.org/wiki/CRS-RL34504 ------------------------------------------------------------------------------ ¢ ¢ ¢ ¢ ¢ ¢ ¢ £ ¢ ¢ ¢ Prepared for Members and Committees of Congress ¢ President Bush's FY2009 budget requested $39 billion for the Department of Housing and Urban Development (HUD), an increase of 4% in net budget authority from the FY2008 non-emergency level. That increase in net budget authority is largely attributable to a decline in the amount available to offset the HUD budget. The President's budget request would result in an overall decline in appropriations for HUD's programs and activities of just over 1% from the FY2008 level. Despite the request for an overall decline in appropriations for HUD's programs and activities, the President's FY2009 budget did request increased appropriations in several areas, including project-based Section 8 rental assistance, the HOME Investment Partnerships block grant program, and Homeless Assistance grants. The President's FY2009 budget requested reductions in funding for several programs, including the Section 202 Housing for the Elderly program and the Section 811 Housing for the Disabled program. It proposed eliminating funding for several programs that were funded in FY2008, including the HOPE VI public housing revitalization program, the Brownfields Redevelopment program, Section 108 loan guarantees, and the Rural Housing and Economic Development block grant program. The President also requested no new funding for each of these programs in his FY2004-FY2008 budget requests, although Congress continued to fund them in each of those years. On June 20, 2008, the Transportation-HUD Subcommittee of the House Committee on Appropriations approved a draft FY2009 Transportation-HUD appropriations bill. On July 9, 2008, the Transportation-HUD Subcommittee of the Senate Committee on Appropriations approved its version of the FY2009 Transportation-HUD appropriations bill; the bill was approved the following day (July 10, 2008) by the Senate Committee on Appropriations (S. 3261). On September 30, 2009, the President signed a continuing resolution funding most government agencies, including HUD, at their FY2008 levels through March 6, 2009 (P.L. 110- 329). The CR also provided $150 million in emergency supplemental assisted housing funds for use in areas affected by the 2005 hurricanes and $6.5 billion in emergency supplemental CDBG funding to be used to respond to presidentially declared disasters taking place in 2008. The FY2009 appropriations legislation was not enacted before the close of the 110th Congress and the end of the Bush Administration. The 111th Congress is expected to consider legislation to provide appropriations for the remainder of FY2009 sometime before the expiration of the continuing resolution (March 6, 2009). The 111th Congress may also consider economic stimulus legislation that may provide emergency funding to select HUD accounts. This report will be updated to track legislative activity. Developments.................................................................................................................................. 1 President's Budget and the Budget Resolution ......................................................................... 1 House and Senate Consideration............................................................................................... 1 Continuing Resolution, Emergency Funding and Stimulus Proposals...................................... 2 Introduction to the Department of Housing and Urban Development (HUD) ................................ 3 Overview and Recent Trends in HUD Funding............................................................................... 4 FY2009 Appropriations ................................................................................................................... 6 Accounts.................................................................................................................................... 9 Tenant-Based Rental Assistance (Section 8 Vouchers) ....................................................... 9 Project-Based Section 8 Rental Assistance....................................................................... 15 Public Housing.................................................................................................................. 18 Native American Housing Block Grants........................................................................... 21 Housing for Persons with AIDS (HOPWA)...................................................................... 21 Office of Rural Housing and Economic Development (RHED)....................................... 22 Community Development Fund/Block Grants ................................................................. 23 CDBG Section 108 Loan Guarantees ............................................................................... 25 Brownfields Economic Development Initiative................................................................ 25 The HOME Investment Partnership Program................................................................... 26 Self-Help and Assisted Homeownership Opportunity Program ....................................... 27 Homeless Programs .......................................................................................................... 29 Housing Programs for the Elderly and Persons with Disabilities ..................................... 30 Federal Housing Administration ....................................................................................... 33 Government National Mortgage Association (Ginnie Mae) ............................................. 34 Research and Technology ................................................................................................. 35 Fair Housing ..................................................................................................................... 36 Lead-Based Paint Hazard Reduction ................................................................................ 37 Office of Federal Housing Enterprise Oversight (OFHEO) ............................................. 38 Figure 1. HUD Funding, FY2002-FY2008 ..................................................................................... 5 Figure 2. Funding for Section 8 as a Percentage of Total HUD Appropriations, FY2002 and FY2008.................................................................................................................................. 6 Figure 3. FHA Offsetting Receipts, FY2002-FY2008..................................................................... 6 Figure 4. Illustration of Project-Based Contract Partial Funding................................................. 17 Table 1. Department of Housing and Urban Development Appropriations, FY2004- FY2008......................................................................................................................................... 3 Table 2. Appropriations: Housing and Urban Development, FY2008-FY2009 .............................. 7 Table 3. Section 8 Tenant-Based Rental Assistance (Vouchers), FY2008-FY2009 ...................... 10 Table 4. Section 8 Project-Based Rental Assistance, FY2008-FY2009 ....................................... 16 Table 5. Public Housing, FY2008-FY2009 ................................................................................... 19 Table 6. Native American Block Grants, FY2008-FY2009 .......................................................... 21 Table 7. HOPWA, FY2008-FY2009 ............................................................................................. 22 Table 8. Rural Housing and Economic Development, FY2008-FY2009 .................................... 22 Table 9. Community Development Fund (CDF): Community Development Block Grants (CDBG) and Related Set-Asides, FY2008-FY2009 ................................................................. 23 Table 10. CDBG Section 108 Loan Guarantees, FY2008-FY2009............................................... 25 Table 11. Brownfields Redevelopment, FY2008-FY2009 ............................................................ 26 Table 12. The HOME Investment Partnership Program, FY2008-FY2009 ................................. 26 Table 13. Self Help Homeownership Opportunities, FY2008-FY2009 ....................................... 28 Table 14. HUD Homeless Programs, FY2008-FY2009 ................................................................ 29 Table 15. Sections 202 and 811, FY2008-FY2009........................................................................ 31 Table 16. Federal Housing Administration, FY2008-FY2009 ...................................................... 33 Table 17. Government National Mortgage Association, FY2008-FY2009 .................................. 35 Table 18. Research and Technology, FY2008-FY2009................................................................. 36 Table 19. Fair Housing Programs, FY2008-FY2009..................................................................... 37 Table 20. Lead-Based Paint Hazard Control, FY2008-FY2009.................................................... 38 Author Contact Information .......................................................................................................... 38 On February 4, 2008, President Bush sent his FY2009 budget to Congress. It included $39 billion for the Department of Housing and Urban Development (HUD). On June 4, 2008, the Senate passed the FY2009 budget resolution conference agreement (H.Rept. 110-659); the House passed it the following day. The budget resolution is used to establish the amount of funding each appropriations subcommittee will have available to allocate. The budget resolution cannot generally be used for determining congressional funding levels for any specific program.1 On June 20, 2008, the Transportation-HUD subcommittee of the House Committee on Appropriations approved a draft FY2009 HUD appropriations bill by voice vote. According to a press release issued by the subcommittee, the draft bill included the following: · $110 million for new incremental vouchers: $75 million to fund 10,000 new housing vouchers for homeless veterans and $30 million for 4,000 new housing vouchers for the disabled; · $75 million for foreclosure counseling and assistance to assist more than 200,000 families at risk of losing their homes; · $1.69 billion for Homeless Assistance Grants ($55 million above the President's request); · $4 billion for Community Development Block Grants ($1 billion above the President's request); · $765 million for housing for the elderly ($225 million above the Administration's request) and $250 million for disabled housing ($90 million above the President's request); and · $4.5 billion for the public housing operating account, $2.5 billion for the public housing capital account, and $120 million for HOPE VI (combined, $896 million more than the Presidents' request for the public housing accounts). (Note: The remainder of this report is not updated to reflect House subcommittee action. It will be updated if and when the legislation becomes publicly available.) On July 10, 2008, the Senate Committee on Appropriations approved its version of the FY2009 Transportation-HUD appropriations bill, following subcommittee approval the previous day (S. 3261). 1 For more information, see CRS Report RL34419, The Budget for Fiscal Year 2009, by D. Andrew Austin. ¢ On September 30, 2008, the President signed a continuing resolution funding most government agencies--including HUD--at their FY2008 levels (P.L. 110-329). The CR was included as Division A of a larger bill that also included supplemental emergency funding (Division B) and the Defense, Homeland Security, and Military Construction/Veterans Administration FY2009 full-year appropriations acts (Divisions C-E). It was attached to the FY2008 Homeland Security bill (H.R. 2638) and passed by the House on September 24, 2008, and the Senate on September 27, 2008. The CR funds agencies through the earlier of March 6, 2009, or enactment of a final FY2009 funding bill. The CR includes several additional provisions related to HUD. Specifically, it authorizes the Secretary to spend funds at a faster rate in order to ensure the timely renewal of project-based Section 8 contracts, extends the authorization for the HOPE VI program, raises the loan commitment levels for the Federal Housing Administration's (FHA) mortgage insurance programs, and allows HUD to use salaries and expenses funding to meet FHA's technology needs. Division B of the act, which includes emergency disaster funding, provides $85 million to provide new Section 8 vouchers to households affected by the 2005 hurricanes, $50 million in new project-based Section 8 vouchers to be used in areas affected by the 2005 hurricanes, $15 million to redevelop public housing developments damaged by the 2005 hurricanes, and $6.5 billion in Community Development Block Grant (CDBG) funding for communities affected by presidentially declared disasters declared in 2008. On January 15, 2009, the House Appropriations Committee released a draft economic stimulus plan. It includes emergency funding for several HUD accounts, as listed below: · $5 billion for the Public Housing Capital Fund; · $2.5 billion to be used to make energy efficiency modifications to project-based Section 8, Section 202, and Section 811 assisted properties; · $1.5 billion for the HOME Investements Partnership Program; · $500 million for the Native American Housing Block Grants account; · $5.2 billion for the Community Development Fund account, $4.2 billion of which is for the Neighborhood Stabilization Grant program and $1 billion of which is for the Community Development Block Grant program; · $1.5 billion for the Emergency Shelter Grant program; · $10 million for the Self-Help and Assisted Homeownership account; · $100 million for the Lead Hazard Control account. Most of the funding for the activities of the Department of Housing and Urban Development (HUD) comes from discretionary appropriations provided each year in the annual appropriations acts enacted by Congress. HUD's programs are primarily designed to address housing problems faced by households with very low incomes or other special housing needs. These include several programs of rental assistance for the poor, elderly, and/or disabled. Three rental assistance programs--Public Housing, Section 8 Vouchers, and Section 8 project-based rental assistance-- account for the majority of the Department's non-emergency funding (more than 75% in FY2008). Two flexible block grant programs, HOME and Community Development Block Grants, help communities finance a variety of housing and community development activities designed to serve low-income families. Other, more specialized, block grants help communities meet the needs of homeless persons, including those with AIDS. In recent years, HUD has also focused more attention on efforts to increase the homeownership rates for lower-income and minority households, with programs providing funding for downpayment assistance and housing counseling. HUD's Federal Housing Administration (FHA) insures mortgages made by lenders to lower- income home buyers, many with below-average credit records, and to developers of multifamily rental buildings containing relatively affordable units. FHA collects fees from insured borrowers, which are used to sustain the insurance fund and offset its administrative costs. Surplus FHA funds have been used to offset the cost of the HUD budget. Table 1 presents total enacted appropriations for HUD over the past five years, including emergency appropriations. dna gnisuoH fo tnemtrapeD . 1 elbaT 8002YF-4002YF ,snoitairporppA tnempoleveD nabrU )sn oillib ni ytirohtua tegdub ten( 4002YF 5002YF 6002YF 7002YF 8002YF 02.13 29.13 a86.05 36.63 b95.74 slevel snoitairporppa laniF .eettimmoC snoitairporppA esuoH eht yb decudorp selbat morf nekat era serugiF :ecruoS fo setamitse desiver tcelfer ton od yehT .snoissicser ro snoitairporppa latnemelppus lla edulcni raey lacsif yna rof .stpiecer gnittesffo ycnegreme ni )432-901 .L.P ni noillib 2.5$ dna 841-901 .L.P ni noillib 9.11$( noillib 1.71$ sedulcni erugiF .a DUH 6002YF ralugeR .senacirruh 5002 eht ot esnopser ni detcane snoitairporppa latnemelppus .noillib 6.33$ rednu tsuj delatot snoitairporppa eht ot esnopser ni anaisiuoL rof gnidnuf latnemelppus ycnegreme ni )611-011 .L.P( noillib 3$ sedulcni erugiF .b rof gnidnuf latnemelppus ycnegreme ni noillib )923-011 .L.P dna 252-011 .L.P( 59.6$ dna senacirruh 5002 .noillib 46.73$ delatot snoitairporppa 8002YF ralugeR .sretsasid 8002 HUD's annual funding, or budget authority, is made up of several components, including regular annual appropriations, emergency appropriations, rescissions, and offsets.2 HUD's programs and activities are funded almost entirely through regular annual appropriations, also referred to as discretionary appropriations.3 As a result, the amount provided in the annual appropriations acts each year generally determines how much will be obligated and eventually spent for each of HUD's programs and activities. In some years, Congress will also provide emergency appropriations, generally in response to disasters, through one or more of HUD's programs. These funds are generally provided outside of the regular appropriations acts--often in emergency supplemental spending bills--and are generally provided in addition to regular program level funding. Congressional appropriators are generally subject to limits in the amount of new, non-emergency, discretionary appropriations they can provide in a year. One way to stay within these limits is to provide less in regular annual appropriations. Another way to stay within these limits is to find offsets for spending. A portion of the cost of HUD's regular annual appropriations acts is generally offset in two ways. The first is through rescissions or cancellations of unobligated or recaptured balances from previous years' funding. The second is through offsetting receipts and collections, generally derived from fees paid by HUD partners or clients. The interaction between new appropriations and offsets provided through rescissions, receipts, and collections, determines HUD's total budget authority. Budget authority is also the "cost" of the HUD budget, as estimated by the Congressional Budget Office in its scorekeeping process.4 The total amount of budget authority provided to HUD each year, while important for federal budgeting purposes, is not necessarily the best measure of the amount of funding that is being provided for HUD's programs and activities. For example, if Congress has increased appropriations for HUD's programs and activities at the same time that offsetting receipts are increasing by a greater amount, then HUD's total budget authority may appear to be declining. Conversely, if Congress has reduced appropriations for HUD's programs and activities at the same time that offsetting receipts are declining by a greater amount, then HUD's budget authority may appear to be increasing. If Congress wished to maintain level budget authority for HUD programs, Congress would increase appropriations if offsets are declining (or, provide less appropriations if offsets are increasing). 2 For more information, see CRS Report RS20095, The Congressional Budget Process: A Brief Overview, by James V. Saturno. 3 According to the Congressional Quarterly's American Congressional Dictionary, discretionary appropriations are defined as appropriations not mandated by existing law and therefore made available annually in appropriation bills in such amounts as Congress chooses. The Budget Enforcement Act of 1990 defines discretionary appropriations as budget authority provided in annual appropriation acts and the outlays derived from that authority, but it excludes appropriations for entitlements. 4 According to the Congressional Quarterly's American Congressional Dictionary, scorekeeping is defined as the process of calculating the budgetary effects of pending and enacted legislation and assessing its impact on applicable budgetary targets, as required by the Congressional Budget Act of 1974. As shown by the line in Figure 1. , total non-emergency budget authority for HUD increased 28% between FY2002-FY2008, from over $29 billion to just under $38 billion. However, the increase in total budget authority masks several important trends. From FY2002 to FY2008, regular annual appropriations, which is the amount available to fund HUD's programs and activities, grew by 20%. During the same period, the amount available in offsetting receipts and collections, which Congress uses to reduce the cost of providing new appropriations, declined by more than 65% (see Figure 1). As a result, the increase in total non- emergency budget authority for HUD from FY2002-FY2008 is not fully attributable to increases in appropriations for HUD's programs and activities; rather, part of the increase in total budget authority is attributable to decreases in the amount available in offsetting receipts. For example, in FY2007, Congress provided $39 billion in regular appropriations for HUD's programs and activities. Since $3 billion was available from offsets and rescissions, HUD's total budget authority was $36 billion. If less had been available in offsets, the cost to Congress of providing $39 billion in regular appropriations would have been higher. 8002YF-2002YF ,gnidnuF DUH .1 erugiF Emergency $60 Appropriations $50 Regular Appropriations $40 Rescissions $30 Offsets billions $20 Total Non- $10 Emergency Budget Authority $0 -$10 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 .stnemucod snoitairporppa launna fo sisab eht no SRC yb deraperp trahC :ecruoS The increase in regular (non-emergency) appropriations shown in Figure 1. (from just over $35 billion in FY2002 to over $40 billion in FY2008) is largely attributable to the growth in appropriations for the project-based and tenant-based Section 8 program. From FY2002-FY2008, appropriations for Section 8 grew by more than 40%; appropriations for all other programs and activities during that period declined by about 4%. As can be seen in Figure 2, appropriations for the Section 8 program have grown from about 45% of HUD's regular appropriations in FY2002 to about 55% of HUD's regular appropriations in FY2008. ,snoitairporppA DUH latoT fo egatnecreP a sa 8 noitceS rof gnidnuF .2 erugiF 8002YF dna 2002YF .stnemucod snoitairporppa launna fo sisab eht no SRC yb deraperp trahC :ecruoS The large decline in offsetting receipts over this period is largely attributable to declines in excess receipts in the Federal Housing Administration's (FHA) mortgage insurance programs (discussed later in this report). As shown in Figure 3, from the peak (in FY2004) to the lowest point (in FY2008), the amount of offsetting receipts available from the FHA mortgage insurance program declined by 92%. 8002YF-2002YF ,stpieceR gnittesffO AHF .3 erugiF $3.5 $3.0 $2.5 billions $2.0 $1.5 $1.0 $0.5 $- FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 .stnemucod snoitairporppa launna fo sisab eht no SRC yb deraperp trahC :ecruoS Table 2 presents the President's FY2009 budget request for HUD compared to the prior year's enacted budget authority and the congressional response. Four totals are given in Table 2: "budget authority provided" and "available budget authority," both including and excluding emergency appropriations. Total budget authority provided includes current year appropriations, plus advance appropriations provided in the current fiscal year for use in the next fiscal year; total available budget authority includes current year appropriations, plus advance appropriations provided in the prior fiscal year for use in the current fiscal year. Congress is scored by CBO for the amount of available budget authority in an appropriations bill; however, the Appropriations Committees' documents often discuss budget authority provided. The President's FY2009 Budget requests a less than 4% increase in total, regular (non- emergency) budget authority for HUD. Following recent trends, the requested increase in budget authority is largely driven by declines in the amount available for rescission (88% decline from FY2008) and projected to be available in offsetting receipts (23% decline from FY2008). The FY2009 request for regular (non-emergency) appropriations--which is the amount available for HUD's programs and activities--represents a slight decline (1.4%) from FY2008. The 110th Congress adjourned before work on the FY2009 appropriations acts was complete. In the House, an FY2009 funding bill was marked up in subcommittee, but not reported, and in the Senate, a bill was reported by committee. Before the end of FY2008, Congress approved a continuing resolution funding most federal agencies at their FY2008 levels through March 6, 2009. (For an expanded discussion, see "Recent Developments" at the beginning of this report.) The unreported House subcommittee-passed bill and the continuing resolution are not reflected in Table 2 or in the remainder of this report. 2 elbaT 9002YF-8002YF ,tnempoleveD nabrU dna gnisuoH :snoitairporppA . )sra llod fo snoillib ni ytirohtua tegdub( 8002YF 9002YF 9002YF tnuoccA detcanE tseuqeR etaneS .mmoC snoitairporppA noitartsinimdA dna tnemeganaM a 212.1 092.1 403.1 )srehcuov 8 .ceS( ecnatsissA latneR desaB tnaneT )raey tneuqesbus rof ecnavda sedulcni( 193.61 188.51 307.61 )8.ceS( ecnatsissA latneR desaB tcejorP )raey tneuqesbus rof ecnavda sedulcni( 283.6 004.7 054.8 dnuF latipaC gnisuoH cilbuP 934.2 420.2 444.2 dnuF gnitarepO gnisuoH cilbuP 002.4 003.4 004.4 IV EPOH 001.0 000.0 001.0 stnarG kcolB gnisuoH naciremA evitaN 036.0 726.0 056.0 seetnaraug naol gnisuoh naidnI 700.0 900.0 900.0 tnarG kcolB gnisuoH naiiawaH evitaN 900.0 600.0 010.0 seetnaraug naol gnisuoh naiiawaH evitaN 100.0 000.0 100.0 )AWPOH( SDIA htiw snosreP rof gnisuoH 003.0 003.0 513.0 tnempoleveD cimonocE gnisuoH laruR 710.0 000.0 030.0 )GBDC gnidulcni( dnuF tnempoleveD ytinummoC 668.3 000.3 988.3 ydisbus ;eetnaraug naol 801.ceS 500.0 000.0 600.0 tnempoleveder sdleifnworB 010.0 000.0 000.0 spihsrentraP tnemtsevnI EMOH a407.1 a769.1 769.1 pihsrenwoemoH pleh-fleS 060.0 040.0 660.0 463.24 570.93 736.73 snoitairporppA ycnegremE gnidulcxe ,dedivorP ytirohtuA tegduB latoT slatoT 000.0 000.0 d 059.9 latotbuS gnidnuF ycnegremE 000.0 000.0 d008.6 gnidnuF GBDC ycnegremE sretsasiD 8002 000.0 000.0 000.3 gnidnuf GBDC ycnegremE tsaoC fluG 000.0 000.0 d580.0 gnidnuf ARBT ycnegremE tsaoC fluG 000.0 000.0 d050.0 gnidnuf ARBP ycnegremE tsaoC fluG 000.0 000.0 d510.0 gnidnuf gnisuoh cilbup ycnegremE tsaoC fluG gnidnuF ycnegremE 397.0- 008.0- 530.1 - latotbuS stesffO 004.0- 704.0- 045.0- slasoporP evitalsigeL 071.0- 071.0- 361.0- )AMNG( noitaicossA egagtroM lanoitaN tnemnrevoG 041.0- 041.0- 052.0- AHF 760.0- 760.0- 660.0- thgisrevO esirpretnE gnisuoH laredeF fo eciffO 610.0- 610.0- 610.0- dnuF tsurT seeF gnisuoH derutcafunaM stpieceR dna snoitcelloC gnittesffO 838.0- 332.0- 110.2- latotbuS snoissicseR 008.0- 000.0 327.0- noissicser )rehcuov 8 .ceS( ecnatsissA latneR desaB-tnaneT 830.0- 820.0- 830.0- noissicser ecnatsissa gnisuoh latneR 000.0 081.0- 000.0 noissicser evitaitinI stnempoleveD cimonocE snoissicseR 499.34 801.04 386.04 latotbuS snoitairporppA c 760.0 760.0 660.0 thgisrevO esirpretnE gnisuoH laredeF fo eciffO 511.0 511.0 211.0 lareneG rotcepsnI 112.0 422.0 551.0 dnuf latipac gnikroW 002.0 611.0 541.0 noitcudeR drazaH daeL 650.0 150.0 050.0 seitivitca gnisuoh riaF c 541.0 781.0 961.0 sesnepxE )AHF( noitartsinimdA gnisuoH laredeF 060.0 550.0 150.0 ygolonhceT dna hcraeseR c 820.0 820.0 820.0 ecnatsissA gnisuoH latneR b b b 560.0 560.0 ecnatsissA gnilesnuoC gnisuoH c 120.0 120.0 610.0 dnuF tsurT seeF gnisuoH derutcafunaM 052.0 061.0 732.0 )118 .ceS( seitilibasiD htiw snosreP rof gnisuoH 567.0 045.0 537.0 )202 .ceS( ylredlE eht rof gnisuoH 766.1 636.1 685.1 stnarG ecnatsissA sselemoH .mmoC tseuqeR detcanE etaneS 9002YF 8002YF tnuoccA 9002YF vouchers, which are administered at the local level by quasi-governmental Public Housing their housing costs in the private market. HUD currently funds more than 2 million Section 8 McCarty.) Section 8 vouchers are portable rent subsidies that low-income families use to reduce (See CRS Report RL32284, An Overview of the Section 8 Housing Programs, by Maggie The tenant-based rental assistance account funds the Section 8 Housing Choice Voucher program. included in Table 2. The following section of the report provides a detailed discussion of the majority of accounts .setamitse 'seettimmoc eht ni esoht hctam ton od dedivorp slatot eht yhw si hcihw ,elbat siht poleved ot desu erew taht gnidnuf detcane 8002YF fo setamitse 'seettimmoc eht ni detcelfer erew )noillib 59.6$ gnilatot( sdnuf eseht fo enoN .)noillim 58$( margorp ecnatsissa latner desab -tnanet dna ,)noillim 05$( margorp ecnatsissa latner desab-tcejorp ,)noillim 51$( margorp gnisuoh cilbup eht hguorht senacirruh 5002 eht yb detceffa saera rof dia lanoitidda ni noillim 051$ dedivorp osla 923-011 .L.P .8002 ni gnirrucco sretsasid yb detceffa saera rof 923-011 .L.P yb 8002YF ni detairporppa saw ecnatsissa retsasid GBDC ycnegreme ni noillib 5.6$ lanoitidda nA .seitivitca feiler retsasid rehto dna 8002 fo sdoolf tsewdiM eht rof 252-011 .L.P yb 8002YF ni detairporppa saw ecnatsissa retsasid GBDC ni noillim 003$ .d tnuocca etarapes a ni dedivorp eb ecnatsissa gnilesnuoc gnisuoh rof gnidnuf taht detseuqer tegdub s'tnediserP eht ,9002YF rof ;tnuocca EMOH eht nihtiw edisa-tes a sa dedivorp saw ecnatsissa gnilesnuoc gnisuoh rof gnidnuf ,8002YF nI .c .2 elbaT ni retal nwohs snoissicser ro ,stpiecer ,snoitcelloc hguorht tesffo yllareneg si tnuocca siht rof gnidnuF .b .noitcudeR drazaH daeL dna ,semoH yhtlaeH ,ytinutroppO lauqE dna gnisuoH riaF ,hcraeseR dna tnempoleveD yciloP ,AMNG ,gnisuoH ,tnempoleveD dna gninnalP ytinummoC ,gnisuoH naidnI dna cilbuP fo seciffO eht rof stifeneB dna noitasnepmoC lennosreP dna ,tnemeganaM snoitarepO dna noitartsinimdA ,noitceriD evitucexE gnidulcni ,stnuocca evitartsinimda dna ,lennosrep ,tnemeganam lareves rof gnidnuf sedulcnI .a .raey lacsif tnerruc eht ni esu rof raey lacsif roirp eht ni dedivorp erew taht snoitairporppa ecnavda eht sedulcni ytirohtua tegdub elbaliava ;raey lacsif tneuqesbus eht ni esu rof raey lacsif tnerruc eht ni dedivorp snoitairporppa ecnavda sedulcni dedivorp ytirohtua tegdub latoT .elbaliava semoceb noitalsigel eht nehw dna fi noitca esuoH tcelfer ot detadpu eb lliw elbat sihT .emit siht ta elbaliava ylcilbup llib eht edam ton sah eettimmocbus ehT .8002 ,02 enuJ no llib snoitairporppa DUH 9002YF eht fo noisrev sti devorppa snoitairporppA no eettimmoC esuoH eht fo eettimmocbus DUH-noitatropsnarT ehT :setoN .923-011 .L.P dna ,252-011 .L.P yb dedivorp gnidnuf ycnegreme rof detsujda dna 814-011 .tpeR.S ,1623 .S ,snoitacifitsuJ tegduB lanoissergnoC DUH ,stnemucod tegduB 9002YF s'tnediserP eht ,eettimmoC snoitairporppA eht yb dedivorp selbat fo sisab eht no SRC yb deraperP :ecruoS 275.04 338.83 d226.74 snoitairporppA ycnegremE gnidulcni ,ytirohtuA tegduB elbaliavA latoT 463.24 570.93 d785.74 snoitairporppA ycnegremE gnidulcni ,dedivorP ytirohtuA tegduB latoT 275.04 338.83 276.73 snoitairporppA ycnegremE gnidulcxe ,ytirohtuA tegduB elbaliavA latoT .mmoC tseuqeR detcanE etaneS 9002YF 8002YF tnuoccA 9002YF .814-011 .tpeR.S dna 1623 .S ,snoitacifitsuJ tegduB lanoissergnoC DUH ,stnemucod tegduB 9002YF s'tnediserP eht ,eettimmoC snoitairporppA eht yb dedivorp selbat fo sisab eht no SRC yb deraperP :ecruoS b8 b8 6 dnuF latipaC gnikroW 431 411 521 srehcuoV latnemercnI weN 002 051 002 srehcuoV noitcetorP tnaneT c05 84 94 srotanidrooC )SSF( ycneiciffuS fleS ylimaF 05 04 53 seeF lanoitiddA c 054,1 004,1 a 153,1 seef evitartsinimdA sedisA-teS rehtO 001 05 05 evreser ydisbus latneR b910,41 b913,41 a179,31 slaweneR rehcuoV rof ytirohtuA tegduB teN 008 0 327 noitairporppA ecnavdA morf noissicseR b918,41 b913,41 a596,41 slaweneR rehcuoV rof ytirohtuA tegduB ssorG gnidnuF laweneR rehcuoV 853,3 851,4 074,3 )woleb ees( noissicseR sseL ,raeY tnerruC rof elbaliavA noitairporppA ecnavdA 851,4 851,4 391,4 raeY tnerruC rof elbaliavA noitairporppA ecnavdA 002,4 000,4 851,4 raeY txeN rof dedivorP noitairporppA ecnavdA 305,21 188,11 332,21 ytirohtuA tegduB raeY tnerruC 168,51 930,61 307,51 )noissicser-tsop ,ytirohtuA tegduB elbaliavA( ecnatsissA latneR desaB-tnaneT 8 noitceS ,latoT 166,61 930,61 624,61 )noissicser-erp ,ytirohtuA tegduB elbaliavA( ecnatsissA latneR desaB-tnaneT 8 noitceS ,latoT 307,61 188,51 193,61 )dedivorP ytirohtuA tegduB( ecnatsissA latneR desaB-tnaneT 8 noitceS ,latoT .mmoC tseuqeR detcanE etaneS 9002YF 8002YF 9002YF )sra llod fo snoillim ni( 9002YF-8002YF ,)srehcuoV( ecnatsissA latneR desaB-tnaneT 8 noitceS . 3 elbaT Appropriations and Rescissions") use in FY2008. (See expanded discussion below under "Current Appropriations, Advance FY2008, Congress enacted a rescission from the advance appropriations provided in FY2007 for advance appropriations provided in the prior fiscal year for use in the current fiscal year. In subsequent fiscal year; available budget authority includes current year appropriations, plus appropriations, plus advance appropriations provided in the current fiscal year for use in the post-rescission. As described earlier, total budget authority provided includes current year authority provided; available budget authority, pre-rescission; and available budget authority, Table 3 presents three totals for the Section 8 tenant-based rental assistance account: budget vouchers and the cost of administering the program. Authorities (PHAs). This account--the largest in HUD's budget--funds the cost of those saw gnidnuf ecnatsissa latner desab-tnanet latnemelppus ycnegreme 8002YF ni noillim 58$ lanoitidda nA :etoN siht ni dedulcni ton era senacirruh 5002 eht yb detceffa saera ni esu rof era sdnuf esehT .923-011 .L.P yb dedivorp .elbat rehgih noillim 01$ tuoba gnidnuf lawener ssorg wohs 9002YF rof snoitacifitsuJ tegduB lanoissergnoC ehT .a nwohs tnuoma eht naht ssel noillim 01$ tuoba gnidnuf eef evitartsinimda dna ereh nwohs tnuoma eht naht ot seef evitartsinimda morf noillim 01$ yletamixorppa derrefsnart evah yam DUH taht sraeppa tI .ereh rof elbaliava stnuoma eht taht etacidni snoitacifitsuJ tegduB lanoissergnoC eht ,revewoh ;8002YF ni slawener ot lauqe si )sisab raey radnelac a no deretsinimda dna dednuf si margorp rehcuov eht( 8002 raey radnelac .elbat siht ni nwohs stnuoma eht .dnuF latipaC gnikroW eht rof gnidnuf fo tnemtaert eht egnahc ot sesoporp tegdub 9002YF s'tnediserP ehT .b a sa ti taert ot sesoporp tegdub s'tnediserP eht ,tnuocca eht nihtiw edisa-tes a sa ti gnitaert naht rehtaR detpoda 1623 .S .gnidnuf lawener rof elbaliava tnuoma eht morf nekat eb dluow ,ylbamuserp ,hcihw ,refsnart .lasoporp siht latot ehT .seef evitartsinimda rof gnidnuf eht ni edisa-tes a sa dedivorp si srotanidrooc SSF rof gnidnuF .c .srotanidrooc SSF rof noillim 05$ htiw ,noillim 005,1$ si seef evitartsinimda rof dedivorp tnuoma The budget authority for the tenant-based rental assistance account is made up of two components: current year appropriations and advance appropriations. Current year appropriations are provided in a fiscal year for use in that fiscal year. Advance appropriations are provided in a fiscal year for use in the subsequent fiscal year. For budget scoring purposes, the Appropriations Committee is charged for an advance appropriation in the year it becomes available for use. Since FY2001, funding for the Section 8 program has included an advance appropriation, and for most years, the advance appropriation was the same amount every year. As a result, the amount of funding that was provided in a given year (the current year appropriation, plus the advance for the next year) was equal to the amount of budget authority available to the program for that year (the current year appropriation, plus the advance from the previous year). In FY2008, the advance appropriation provided by Congress to become available in FY2009 was less than the amount of the advance appropriation that became available in FY2008 (and was provided in FY2007). As a result, the amount of budget authority provided in FY2008 ($16,391 million) was less than the amount of budget authority available to the program in FY2008 ($16,426 million). Congress was "scored" by CBO for the amount of budget authority available in the fiscal year, rather than the amount provided by the bill. FY2008 funding for the tenant-based rental assistance account was further complicated by a rescission that was included in the administrative provisions of the FY2008 appropriations law. Section 238 of Division K (P.L. 110-161) directed that HUD reduce the advance appropriation that was provided in FY2007 for use in FY2008 by $723 million. This rescission did not affect the amount of budget authority provided by the FY2008 funding bill, but it did affect the amount of budget authority available to the program in FY2008, reducing it from $16,426 million to $15,703 million. In his FY2009 budget request, the President requested that Congress again provide less in advance appropriations for the Section 8 tenant-based rental assistance account than will become available in FY2009. The President requested that Congress provide $4,000 million in advance appropriations for use in FY2010 (a decrease from the $4,158 million in advance appropriations provided in FY2008 for use in FY2009). In addition to the advance, the President's budget requested $11,881 million in current year funding for FY2009. Combined, the President's request would result in $16,039 million in available budget authority for FY2009 (an increase from the $15,703 million available post-rescission in FY2008) and $15,881 million in budget authority provided in FY2009 (a decrease from the $16,391 million provided in FY2008). S. 3261 would provide more in current year funding than the President's request ($12,503 million, compared to $11,881 million) and more in advance appropriations for use in FY2010 than the President's request ($4,200 million, compared to $4,000 million). However, S. 3261 includes a rescission of $800 million from the advance appropriation provided in FY2008 for use in FY2009. As a result, S. 3261 would make less budget authority available for use in FY2009 ($15,861 million)5 than the President requested ($16,039 million)6 but would make more budget authority available in FY2009 than was available in FY2008 ($15,703 million). In FY2008, Congress provided $14,695 million to renew existing vouchers, but also rescinded $723 million from advance appropriations intended to be used for renewal funding (as described above). The net funding for renewals in FY2008--$13,971 million--was intended to be supplemented with agencies' use of their net restricted assets. Net restricted assets are accumulated unspent funds that agencies are not permitted to spend because their use would result in the agency leasing more than their allocated number of vouchers (referred to as overleasing).7 In order to enable agencies to spend their net restricted assets, Congress directed HUD to reduce agencies' FY2008 funding by the amount by which their net restricted assets exceeded 7% of their prior year renewal funding (see discussion under "Renewal Formula" heading below). It was estimated that roughly the same amount of net restricted asset funding would be freed up as was rescinded ($723 million). As a result, it was assumed that the overall funding available for renewals in FY2008 would be equal to just under $14,695 million ($13,971 million in appropriations plus $723 billion in newly freed-up net restricted assets). For FY2009, the President requested $14,319 million for voucher renewals, an increase over FY2008 ($13,971 million). HUD's Congressional Budget Justifications indicated that the President anticipated supplementing the amount requested for renewals by "freeing-up" PHAs' remaining net restricted assets, which HUD estimated to be worth roughly $600 million. Combining the President's requested appropriations level with the $600 million anticipated to be available from net restricted assets, the FY2009 program level would be $14,919 billion, an increase over the estimated FY2008 program level ($14,695 million, including the use of $723 million in net restricted assets), of about $250 million, or 1.7%. This rate of increase is likely below the annual adjustment factor (AAF), which is the inflation measure that is generally used for calculating PHAs' budgets; in FY2008, the unweighted average AAF was about 4%.8 5 $12,503 million in current year funding + $4,158 million in prior year advance appropriations - $800 million rescission = $15,861 million available in FY2009. 6 $11,881 million in current year funding + $4,158 in prior year advance appropriations = $16,039 million available in FY2009. 7 PHAs have been prohibited from using excess budget authority to fund vouchers above their allocated baseline-- referred to as overleasing--since FY2003. 8 Calculated by CRS using FY2008 AAFs, Table 1, highest cost utility included. Data available from HUD at http://www.huduser.org/datasets/aaf.html. S. 3261 would adopt a renewal funding strategy similar to the one used in FY2008. The bill would provide $14,819 million for renewals but also rescind $800 million from the advance appropriation provided in the prior year. The resulting net funding level ($14,019 million) would be less than the amount requested by the President for renewals ($14,319 million). However, the bill assumes that PHAs will have access to their net restricted assets in an amount roughly equal to the amount rescinded, making $14,819 million available for renewals. This amount would be more than was provided in FY2008 and more than the overall program level proposed by the President (including the use of net restricted assets). One of the most contentious aspects of the HUD budget in recent years has been how Congress directs HUD to allocate voucher renewal funding to PHAs. Although a statutory allocation formula exists, it has been overridden in the annual appropriations acts each year since FY2003. In some years, PHAs have been funded according to the cost of their vouchers and the number of vouchers they have leased (called their utilization rate); in other years, PHAs have been funded on the basis of what they received in the previous year, without adjustments for cost or utilization changes. (For more information, see CRS Report RL33929, Recent Changes to the Section 8 Voucher Renewal Funding Formula, by Maggie McCarty.) In FY2008, Congress directed HUD to fund PHAs on the basis of their costs and utilization from the previous year, adjusted for inflation and other factors. Congress then directed HUD to reduce each PHA's allocation by the amount that their net restricted assets exceeded 7% of their previous year's allocation, and then prorate PHAs' budgets to fit within the amount appropriated ($13,921 million9). Some PHAs--PHAs participating in the Moving to Work demonstration, PHAs that spent more than they were allocated in the previous year, certain PHAs affected by the 2005 hurricanes, and PHAs under a HUD receivership--were subject to a different formula. Moving to Work PHAs were funded on the basis of their contracts with HUD; PHAs that spent more than their allocations were funded on the basis of what they received in the previous year, plus inflation; and the others were funded on the basis of the higher of what they received in the previous year (plus inflation), or what they were eligible to receive under the FY2008 funding formula. The prohibition on overleasing was continued in FY2008. Additionally, Congress provided $50 million for a rental subsidy reserve that HUD could use to fund PHAs that would either not have enough funding to maintain their current vouchers or that faced high portability10 costs. For FY2009, the President requested that PHAs be funded on the basis of what they received in the previous year, plus inflation, reduced by their remaining net restricted assets, and prorated to fit within the amount appropriated. The President's budget also included a request for a $50 million rental subsidy reserve to adjust the budgets of PHAs facing unforeseen circumstances or high portability costs. Finally, the President's budget proposed allowing PHAs to use excess budget authority to fund additional vouchers above their baseline allocation (overleasing), which, as noted earlier, they have been prohibited from doing since FY2003. 9 $13,971 million less the $50 million rental subsidy reserve. 10 Portability is the term used to describe the process in which a family with a voucher moves from the jurisdiction of one PHA to the jurisdiction of another. In some cases, PHAs can face increased costs due to portability moves. For PHAs whose costs and utilization remain relatively steady from FY2008 to FY2009, this formula change would have little impact; for PHAs with increases/decreases in costs and/or utilization, this formula change could result in a relative funding decrease/increase from FY2008 to FY2009. S. 3261 included a renewal funding formula similar to the one used in FY2008. Specifically, PHAs would be funded on the basis of their costs and utilization from the previous year, adjusted for inflation and other factors, reduced by the amount of net restricted assets they had accumulated (up to $800 million in aggregate), and prorated to fit within the amount appropriated. The only agencies that would be funded under an alternate formula would be Moving to Work agencies, who would continue to be funded on the basis of their agreements. S. 3261 would maintain the prohibition on overleasing. Of the amount available for renewals, $100 million would be set aside to adjust the budgets of agencies (1) with a significant increase in costs due to unforeseen exigencies or portability; (2) with increased leasing between the end of the fiscal year (the period upon which the cost and utilization data are based) and the end of the calendar year (the period for which PHAs are funded); or (3) with low utilization because of vouchers that were set aside for prior, project- based commitments. Prior to FY2003, administrative fee funding was provided as a part of voucher renewal funding. PHAs were paid administrative fees on a per voucher basis, in an amount based on a formula tied to HUD-established fair market rents (FMRs) in their communities. In FY2003, Congress separated administrative fee funding from voucher renewal funding and directed HUD to provide administrative fees to PHAs on a pro-rata basis, according to what they received in the previous year. This formula change was maintained until FY2008, when Congress directed HUD to allocate administrative fees to PHAs on the basis of the per voucher formula tied to FMRs that was in use prior to FY2003. However, Congress continued to set-aside a fixed amount of funding for administrative fees ($1,351 million in FY2008). While more administrative fee funding was made available to PHAs in FY2008 than FY2007, it is estimated that the amount provided in FY2008 would not be sufficient to fund 100% of PHAs administrative fee eligibility under the formula. For FY2009, the President's budget requested an increase in administrative fee funding (by about $50 million to $1,400 million). The President's budget request proposed using the same formula for allocating administrative fees as was used in FY2008. S. 3261 would provide $1,500 million for administrative fees. That amount includes $1,400 million for administrative fees, to be allocated using the formula used in FY2008, as requested by the President. Of the remaining $100 million, $50 million would be set aside for PHAs requiring extra funds to administer their vouchers, and $50 million would be set-aside for Family Self Sufficiency (FSS) coordinators. (FSS coordinators have historically been funded separately from administrative fees.) FY2008 was the first year since FY2002 that Congress funded new incremental vouchers. From FY2003 through FY2007, the only "new" vouchers that were funded by Congress were vouchers for families displaced from other forms of housing assistance (called tenant protection vouchers). In FY2008, Congress provided $125 million to fund new vouchers for homeless veterans,11 non- elderly disabled families, and families in the child welfare system (including youth aging out of foster care).12 In his FY2009 budget, the President requested $39 million to fund incremental vouchers for elderly and disabled families who were displaced by the 2005 hurricanes and whose FEMA- funded rental assistance will be ending in March 2009. He also requested $75 million for new incremental vouchers for homeless veterans (VASH vouchers). S. 3261 would provide $20 million for FUP vouchers, $75 million for VASH vouchers, and $39 million for vouchers for elderly and disabled households displaced by the 2005 hurricanes. This account provides funding to administer and renew existing project-based Section 8 rental assistance contracts between HUD and private landlords. Under those contracts, HUD provides subsidies to units owned by private landlords that allow eligible low-income families to live in the units but pay only 30% of their incomes toward rent. No new contracts have been entered into under this program since the early 1980s. When the program was active, Congress funded the contracts for 20-40 year periods, so the monthly payments for landlords came from old appropriations. However, once those contracts expire, if they are renewed, they require new annual appropriations. Two totals are provided in Table 4: budget authority provided, which includes advance appropriations provided for use in the subsequent fiscal year; and available budget authority, which includes the advance appropriation provided in the prior fiscal year for use in the current fiscal year. 11 Called Veterans-Affairs Supported Housing (VASH) vouchers. 12 Called Family Unification Program (FUP) vouchers. short-funding contracts was the subject of a hearing before the House Financial Services indicate that funding might not be set aside for the full length of the contract. This practice of for the remainder of FY2007 (including retroactive payments), and HUD modified its contracts to (OMB) and HUD worked together to identify sufficient funding to resume payments to landlords to fund all contract renewals for their full 12 month terms. The Office of Management and Budget The FY2007 funding level had been sufficient to fund partial contract renewals, but not sufficient which had been the Department's past practice. obligate partial funding when it entered into a 12-month contract renewal with a property owner, the problem arose because HUD's legal counsel had determined that HUD could no longer sufficient funding to meet the needs of their existing contracts. Department officials stated that owners and suspended renewals of expiring contracts. At the time, HUD stated that they lacked In July 2007, HUD stopped making monthly payments to project-based Section 8 property .lasoporp siht detpoda S. 3261 .gnidnuf lawener rof elbaliava tnuoma eht morf nekat eb dluow ,ylbamuserp ,hcihw ,refsnart a sa ti taert ot desoporp tegdub s'tnediserP eht ,tnuocca eht nihtiw edisa-tes a sa ti gnitaert naht rehtaR .dnuF lotipaC gnikroW eht rof gnidnuf fo tnemtaert eht gnignahc desoporp tegdub 9002YF s'tnediserP ehT .c .srotartsinimda tcartnoc rof noillim 682$ naht erom on dna noillim 932$ naht ssel on etangised dluoc yraterceS eht taht deificeps llib ehT .b .)woleb b etoN elbaT ees( srotartsinimda tcartnoc rof gnidnuf esaercni ot redro ni decuder eb yam tnuoma sihT .slawener dnuf ot elbaliava edam eb ot si tnuoma siht ot pu taht deificeps llib ehT .a .elbat siht ni dedulcni ton era senacirruh 5002 eht yb detceffa saera ni esu rof era sdnuf esehT .923-011 .L.P yb dedivorp saw gnidnuf ecnatsissa latner desab-tcejorp latnemelppus ycnegreme 8002YF ni noillim 05$ lanoitidda nA :etoN .snoitacifitsuJ tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS c01 c5 4 dnuF latipaC gnikroW 232 232 b932 srotartsinimdA tcartnoC 057,1 004 AN slaweneR tcartnoC rof noitairporppA ecnavdA slaweneR c 854,6 c 367,6 a 931,6 tcartnoC rof snoitairporppA raeY tnerruC 007,6 000,7 283,6 )ytirohtuA tegduB elbaliavA( ecnatsissA latneR desaB-tcejorP 8 noitceS 054,8 004,7 283,6 )dedivorP ytirohtuA tegduB( ecnatsissA latneR desaB-tcejorP 8 noitceS .mmoC tseuqeR detcanE etaneS 9002YF 8002YF 9002YF )sra llod fo snoillim ni( 9002YF-8002YF ,ecnatsissA latneR desaB-tcejorP 8 noitceS . 4 elbaT Committee. At that hearing, a HUD official testified that HUD's FY2008 funding request would be sufficient to partially fund contracts through the end of FY2008.13 Figure 4 helps illustrate the concept of full contract funding versus partial contract funding. Project-based contracts expire throughout the year. When a contract expires, HUD can either provide funding for the full 12-month term of the contract (the light plus dark shaded areas of Figure 4) or some shorter period, such as through the end of the federal fiscal year, September 30 (the dark shaded areas of Figure 4). For example, if a contract expires at the beginning of July, in order to fund it through the end of the federal fiscal year (as shown in the dark shaded area in Figure 4), HUD would be required to provide 3 months' worth of funding. To fund the contract for a full year, through the following July, HUD would be required to provide 12 months of funding (as shown in the dark and light shaded area in Figure 4). Assuming all of the roughly 18,000 project-based Section 8 contracts expire evenly across the months of the year (which is likely not the case), in order to fund all 18,000 contracts through the end of the fiscal year, HUD would need 78 months worth of funding (see dark shaded area of Figure 4). In order to fund all 18,000 contracts for their full 12 month terms, HUD would need 144 months worth of funding (sum of dark shaded and light shaded areas in Figure 4). tcartnoC desaB-tcejorP fo noitartsullI .4 erugiF gnidnuF lait raP .raey eht revo stnemercni lauqe ni eripxe stcartnoc gnimussa SRC yb deraperp erugiF :ecruoS 13 See transcript from "The Impact of Late Housing Assistance Payments on Tenants and Owners in the Project-Based Rental Assistance Program," hearing before the House Financial Services Committee, Wednesday, October 17, 2007. For FY2008, Congress provided about $600 million more for project-based rental assistance than the President requested. That amount of funding was estimated to be sufficient to fund all of the existing contracts through at least the end of the fiscal year, but not sufficient to provide a full 12 months worth of funding for all of the contracts. HUD estimated that it would need an additional $1,900 million to fully fund all contracts for 12 months.14 For FY2009, the President requested $6,763 million for project-based contract renewals and also requested that Congress provide an additional $400 million in advance appropriations to become available in FY2010. HUD's Congressional Budget Justifications indicate that the amount of current year funding requested would be sufficient to fund all contracts through the end of the 2009 federal fiscal year (September 30, 2009), and that the $400 million advance would be sufficient to cover the program's payment needs on the first day of the next fiscal year (October 1, 2009). The requested funding level would not be sufficient to fully fund all contracts for 12 months. S. 3261 would provide $6,458 million in current year funding for project-based contract renewals in FY2009 and $1,750 million in advance appropriations to become available in FY2010. The total amount provided by S. 3261 for renewals would be $8,498 million, $1,335 million more than the President's request. The Senate committee report (S.Rept. 110-415) noted that the increased funding would not be sufficient to fund all contracts for 12 months but would "restore some stability to the program by allowing the Department to enter into longer-term contracts with owners." The public housing program provides publicly owned and subsidized rental units for very low- income families. Although no new public housing developments have been built for many years, Congress continues to provide funds to the more than 3,100 public housing authorities (PHAs) that own and maintain the existing stock of more than 1.2 million units. Through the Operating Fund, HUD provides funds to PHAs to help fill the gap between tenants' contributions toward rent and the cost of ongoing maintenance, utilities, and administration of public housing. Through the Capital Fund, HUD provides funding to PHAs for large capital projects and modernization needs. HOPE VI is a competitive grant program that provides funds to help demolish and/or redevelop severely distressed public housing developments, with a focus on building mixed- income communities. 14 See transcript from "Fiscal 2009 Budget for the Department of Housing and Urban Affairs," hearing before the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, February 13, 2008. level. provided to PHAs after applying the across-the-board reduction is referred to as the proration HUD applies an across-the-board reduction to PHAs' budgets. The percentage of eligible funding Congress. If the amount provided by Congress is less than PHAs' aggregate budget eligibility, of funding PHAs are eligible to receive in aggregate to the amount of funding provided by year, HUD estimates PHA budgets on the basis of this formula. HUD then compares the amount between what it costs to maintain public housing and what PHAs receive in tenant rents. Each PHAs receive operating funding on the basis of a formula that is meant to make up the difference .sdeen ytiruces dna ytefas ycnegreme sa llew sa ,sriaper latipac ycnegreme ot detcerid eb dluow sdnuf esehT .c .lasoporp siht detpoda 1623 .S .stnarg alumrof rof elbaliava tnuoma eht morf nekat eb dluow ,ylbamuserp ,hcihw ,refsnart a sa ti taert ot desoporp tegdub s'tnediserP eht ,tnuocca eht nihtiw edisa-tes a sa ti gnitaert naht rehtaR .dnuF latipaC gnikroW eht rof gnidnuf fo tnemtaert eht gnignahc desoporp tegdub 9002YF s'tnediserP ehT .b .esaercni yam stnarg alumrof rof elbaliava tnuoma eht ,deificeps tnuoma eht "ot pu" sa deificeps era sedisa-tes lareves esuaceB .latot tnuocca eht morf sedisa-tes eht gnitcartbus yb detaluclac si tub ,noitalsigel ni deificeps ton si tnuoma sihT .a .elbat siht ni dedulcni ton era senacirruh 5002 eht yb detceffa saera ni esu rof era sdnuf esehT .923-011 .L.P yb dedivorp saw gnidnuf latipac gnisuoh cilbup latnemelppus ycnegreme 8002YF ni noillim 51$ lanoitidda nA :etoN .snoitacifitsuJ tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS -- -- 51 gnidnuF ycnegremE 001 0 001 IV EPOH b51 b51 71 dnuF latipaC gnikroW 51 51 51 stnemssessa lacisyhp dna laicnaniF 04 83 04 )SSOR( secivres evitroppus dna srotanidrooc ecivreS c02 0 91 sdeen ycnegremE 9 01 9 pihsreviecer laiciduJ/evitartsinimdA 2 7 21 noitaidemer/ecnatsissa lacinhceT b243,2 b939,1 723,2 a stnarg alumroF 444,2 420,2 934,2 dnuF latipaC gnisuoH cilbuP 6 6 6 tnemeganam desab-tessa ot noitisnarT 493,4 492,4 491,4 seidisbuS gnitarepO 004,4 003,4 002,4 dnuF gnitarepO gnisuoH cilbuP .mmoC tseuqeR detcanE etaneS 9002YF 8002YF 9002YF )sra llod fo snoillim ni( 9002YF-8002YF ,gnisuoH cilbuP .5 elbaT In FY2008, Congress provided $4,200 million for public housing operating funds, which was sufficient to fund an estimated 84% of PHA budget eligibility.15 In FY2009, the President requested just under $4,300 million, which HUD's Congressional Budget Justifications estimate would result in a proration level of 81%. S. 3261 would provide $100 million more than the President's request and $200 million more than the amount provided in FY2008. Using the estimates from HUD's Congressional Budget Justifications, the funding level provided by S. 3261 would result in a proration level of just under 83%. The President's FY2009 budget requested a roughly 17% decrease in funding for formula grants under the Capital Fund, compared to FY2008. The amount requested is roughly equal to the estimated $2 billion in new capital needs that accrue every year in public housing. In addition to new needs, there is an estimated backlog of roughly $20 billion in unmet capital needs.16 These estimates of need, however, are more than 10 years old, and the public housing stock has changed significantly during that time, due to demolition and disposition of many units. HUD's Congressional Budget Justifications note that HUD is in the process of undertaking a Capital Needs Assessment in order to estimate the current capital needs of public housing. HUD's Congressional Budget Justifications also note that PHAs can use their capital funding to leverage outside resources to help address unmet capital needs. S. 3261 would provide $2,342 million for capital grants, roughly 21% more than the President's requested funding level and slightly more (<1%) than was provided in FY2008. Each year since FY2003, the President has requested no new funding for the HOPE VI public housing revitalization program. In response, each year, Congress has continued to fund the program. Up until FY2003, the program was generally funded at just under $600 million, although in recent years its funding level has generally been around $100 million. HUD's Congressional Budget Justifications criticize the program for a slow expenditure of grant funds and also note that PHAs are able to use their capital fund grants to leverage resources in much the same way HOPE VI grants are used to leverage additional resources, making HOPE VI less necessary. Proponents of HOPE VI cite the program's transformative effects on severely distressed communities. (For additional information, see CRS Report RL32236, HOPE VI Public Housing Revitalization Program: Background, Funding, and Issues, by Maggie McCarty). S. 3261 would provide $100 million for HOPE VI, setting aside $2 million for technical assistance. The bill also includes language to extend the authorization for the program through the end of FY2009. Authorization for the HOPE VI program is currently slated to sunset at the end of FY2008. 15 See http://www.hud.gov/offices/pih/programs/ph/am/of/cy2008oblig2.pdf. 16 Abt Associates, "Capital Needs of the Public Housing Stock in 1998 Formula Capital Study," January 2000. The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA) reorganized the system of federal housing assistance to Native Americans by eliminating several separate programs of assistance and replacing them with a single block grant program. In addition to simplifying the process of providing housing assistance, the purpose of NAHASDA was to provide federal assistance for Indian tribes in a manner that recognizes the right of Indian self- determination and tribal self-governance. NAHASDA provides block grants to Indian tribes or their tribally designated housing entities (TDHE) for affordable housing activities. Affordable housing activities include any programs currently authorized in law, as well as model activities as approved by HUD. 6 elbaT 9002YF-8002YF ,stnarG kcolB naciremA evitaN . )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC stnarg kcolb gnisuoh naciremA evitaN 036 726 056 stnarG alumroF SN 126 336 )ydisbuS tiderC IV eltiT( eetnarauG naoL 2 2 2 ecnatsissA lacinhceT 4 4 4 ecnatsissa lacinhcet ,gniniart ,snoitcepsnI 4 4 4 licnuoC gnisuoH naidnI naciremA lanoitaN SN 0 0 lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ tegduB .stroper gniynapmocca ro sllib snoitairporppa eht ni )SN( deificeps ton era sedisa-tes emoS :etoN .stseretni gnisuoh naciremA evitaN gnitneserper noitazinagro lanoitan a ot noillim 4$ edivorp dluow 1623 .S .a The President's budget requested an appropriation of $627 million in Native American Block Grants for FY2009, a decrease of $3 million from the level enacted for FY2008. The request included $2 million in credit subsidy to support about $17 million in loans under the Title VI program. No set-aside was requested for the National American Indian Housing Council. The Senate committee recommended an appropriation of $650 million in Native American Block Grants for FY2009, a $23 million increase over the budget request and a $20 million increase over the FY2008 level. As requested by the Budget, the committee recommended $2 million in credit subsidy that would support up to $17 million in guaranteed loans. The committee also recommended $4 million for inspections of Indian housing units, contract expertise, training, technical assistance, oversight, and management. The HOPWA program (42 U.S.C. §§12901-12912) provides housing assistance and related supportive services for low-income persons with HIV/AIDS and their families. Funding is distributed both by formula allocation and competitive grants to states, localities, and nonprofit organizations. (For background, see CRS Report RL34318, Housing for Persons Living with HIV/AIDS, by Libby Perl). 7 elbaT 9002YF-8002YF ,AWPOH . )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC )AWPOH( SDIA htiw snosreP rof gnisuoH 003 003 513 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ For FY2009, the President proposed to fund the HOPWA program at the FY2008 level--$300 million. For the third year in a row, the Administration's budget also recommended changing the formula used to allocate funds to states and localities. Currently the formula uses the cumulative number of AIDS cases in a recipient jurisdiction (including those individuals who have died) to determine how funds are distributed. The method proposed by the President would use as formula factors the number of persons living with AIDS and would include a housing cost factor to account for rents in high cost areas. S. 3261 would provide $315 million for HOPWA, an increase of $15 million over both the FY2008 enacted level and the President's request. The bill does not discuss the President's proposal to change the HOPWA formula. This office was established to enable HUD to have a comprehensive approach to rural housing and rural economic development issues. The RHED program provides funding for capacity building in rural, under-served areas; and grants for Indian tribes, state housing finance agencies, state and local economic development agencies, rural nonprofits, and rural community development corporations to pursue strategies designed to meet rural housing and economic development needs. ,tnempoleveD cimonocE dna gnisuoH laruR .8 elbaT 9002YF-8002YF )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC tnempoleveD cimonocE dna gnisuoH laruR 71 0 03 yllaredeF rof ecnatsissA tnempoleveD cimonocE 0 sebirT naidnI dezingoceR 0 21 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ As in previous years, the Administration proposed no funding for RHED for FY2009. The Administration argued that if its proposed revisions of the Community Development Block Grant program (CDBG) are enacted, the needs of America's rural communities will be addressed through the state CDBG program, the HOME program, and through the U.S. Department of Agriculture (USDA) rural housing programs. The Senate committee recommended an appropriation of $30 million for RHED for FY2009, which is $13 million more than the FY2008 level. The committee noted that the Office plays an important role in HUD's community development activities and that the RHED programs are sufficiently different from the housing programs administered by the USDA to warrant separate appropriations. The committee noted its concern about the high rates of unemployment and poverty experienced by Native Americans and believes that it is critical to give federally recognized Indian tribes the resources and tools that will enable them to promote economic development, create jobs, and increase housing capacity. Therefore the committee recommended that $12 million of the increased RHED funds be used for conducting economic development and entrepreneurship activities for federally recognized Indian tribes. ¢ The Community Development Fund (CDF) account supports activities undertaken through the Community Development Block Grant program. In addition, the CDF has funded other community development-related programs in past years, including the Economic Development Initiatives and Neighborhood Initiative demonstrations. :)FDC( dnuF tnempoleveD ytinummoC .9 elbaT )GBDC( stnarG kcolB tnempoleveD ytinummoC 9002YF-8002YF ,sedisA-teS detaleR dna )sra llod fo snoillim ni( 8002YF 9002YF 9002YF detcanE tseuqeR etaneS .mmoC FDC 668,3 000,3 988,3 stnarG alumroF GBDC 685,3 729,2 685,3 saerA ralusnI 7 7 7 GBDC naidnI 26 75 56 ecnatsissA lacinhceT 3 5 5 latipaC gnikroW 2 3 3 )IDE( skramraE evitaitinI tnempoleveD cimonocE 081 a0 102 )IN( skramraE evitaitinI doohrobhgieN 62 a0 22 stnarG yrevoceR retsasiD GBDC emoH daoR anaisiuoL--gnidnuF ycnegremE 000,3 b 0 0 stnarG yrevoceR retsasiD GBDC sretsasiD 8002--gnidnuF ycnegremE 008,6 c 0 0 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ .gnidnuor ot eud dda ton yam slatoT :etoN ni dedivorp gnidnuf kramrae IN dna IDE eht lecnac ssergnoC taht detseuqer tegdub 9002YF s'tnediserP ehT .a .8002YF emoH daoR s'anaisiuoL rof 611-011 .L.P ni detairporppa saw ecnatsissa retsasid GBDC ni noillib 3$ .b .margorP 8002 fo sdoolf tsewdiM eht rof 252-011 .L.P ni detairporppa saw ecnatsissa retsasid GBDC ni noillim 003$ .c -011 .L.P ni detairporppa saw ecnatsissa retsasid GBDC ni noillib 5.6$ dna seitivitca feiler retsasid rehto dna .yrevocer retsasid 8002 rof 923 The President's FY2009 budget recommendation of $2,927 million for the formula portion of CDBG is $659 million (18.4%) less than the $3,586 million appropriated for distribution to communities and states in FY2008. In addition, the President's FY2009 budget request stated that the Administration would seek to reform the CDBG program during the 110th Congress by again offering Congress a proposal that was first unveiled during the 109th Congress, namely, the Community Development Block Grant Reform Act. The Administration proposal, which would restructure the CDBG distribution formula, includes the following changes: · replacement of the existing dual CDBG formula with a single weighted formula that would target assistance on the basis of a community's or state's share of households living in poverty (excluding college students), the number of female- headed households with minor children, the number of overcrowded housing units, the number of housing units 50 years or older occupied by low-income families and per capita income; · a requirement that entitlement communities would have to meet a minimum grant threshold in order to receive a direct annual allocation; · a two-year transition for communities that no longer met the minimum grant threshold amount; and · a new $200 million bonus grant program called Economic Development and Revitalization Challenge Grants to reward entitlement communities with programs resulting in improved living conditions in distressed neighborhoods.17 In addition to requesting reduced funding for CDBG formula grants, the Administration's FY2009 budget proposed eliminating funding for several other community development related programs, including Rural Housing and Economic Development Grants, Community Development Block Grant Section 108 loan guarantees, and Brownfields Economic Development Initiatives. The budget characterized these programs as duplicative of the activities funded by the CDBG formula grant program. S. 3261, as reported to the Senate on July 14, 2008, recommended an appropriation of $3,889 million for Community Development Fund activities. This includes $3,586 million for formula- based allocations to 1,173 entitlement communities and the 50 states and Puerto Rico, which is 17 The proposal may be viewed at http://www.hud.gov/content/releases/pr06-056act.pdf. Under Section 7(b) of the draft proposal, the Challenge Grant Program would be funded as a set aside within the total appropriated for CDBG formula grant activities. For FY2009, funding of Challenge Grant activities is contingent upon passage of CDBG formula reforms drafted by the Administration. The Administration's proposed CDBG Reform Act, including creation of the Challenge Grant Program, has not been formally introduced in the 110th Congress. the same amount as appropriated for FY2008, but $659 million more than requested by the Bush Administration. The Senate Appropriations Committee also recommended $201 million in EDI assistance to be allocated to 192 congressionally designated projects for an average award of just over $1 million. For FY2008, approximately 820 projects were awarded $180 million in EDI funds for an average allocation of approximately $220,000. In addition, the Senate Appropriations Committee recommended a $4 million increase above the amount appropriated for FY2008 for Neighborhood Initiative earmarks. The Section 108 loan guarantee program allows states and entitlement communities to leverage their annual CDBG allocation in order to help finance brownfield18 redevelopment, large scale economic development, and housing projects. CDBG entitlement communities and states are allowed to borrow an amount equal to as much as five times their annual CDBG allocation for qualifying activities. As security against default, states and entitlement communities must pledge their current and future CDBG allocations. 9002YF-8002YF ,seetnarauG naoL 801 noitceS GBDC .01 elbaT )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC seetnarauG naoL 801 noitceS 5 0 6 gniliec tnemtimmoc naoL 502 0 572 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ The Administration's budget did not include funding for the Section 108 loan guarantee program for FY2009. Citing the results of its Program Assessment Rating Tool (PART), which found the program was duplicative and that results were not demonstrated, the Administration recommended the program be terminated.19 The Senate Appropriation Committee recommended $6 million in subsidies to support $275 million in loan commitments. This is a slight increase above the amount appropriated in FY2008. The Brownfields Economic Development Initiative program is a competitive grant program that provides funds to assist cities with the redevelopment of abandoned, idled, and underused industrial and commercial facilities where expansion and redevelopment are burdened by real or potential environmental contamination. The funds are used in support of CDBG Section 108 loan guarantees and in collaboration with program funding by the Environmental Protection Agency. 18 See discussion under Brownfields Economic Development Initiative heading later in this report. 19 The PART assessment may be viewed at http://www.whitehouse.gov/omb/expectmore/ summary/ 10009066.2007.html. 11 elbaT 9002YF-8002YF ,tnempolevedeR sdleifnworB . )sra llod fo snoillim ni( 9002YF 9002YF 9002YF etaneS detcanE tseuqeR .mmoC 01 tnempolevedeR sdleifnworB 0 0 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ The Bush Administration's FY2009 budget--as in previous years--recommended termination of the Brownfields Redevelopment program. The Senate Appropriations Committee-approved bill did not include funding for brownfield redevelopment activities. Created in 1990, the HOME Investment Partnership Program provides formula-based block grant funding to states, units of local government, Indian tribes, and insular areas to fund affordable housing initiatives. Eligible activities include acquisition, rehabilitation, and new construction of affordable housing, as well as rental assistance for eligible families. The HOME program account has also been used to fund related programs. The American Dream Downpayment Initiative (ADDI), created in 2003 (P.L. 108-186), funds HOME grantees to provide downpayment, closing cost, and rehabilitation assistance to first-time home buyers. Housing counseling assistance is authorized under Section 106 of the Housing and Urban Development Act of 1968 (P.L. 90-448). HUD provides competitive grants to local housing counseling agencies, intermediaries, and state Housing Finance Agencies to provide several categories of housing counseling, including comprehensive counseling, counseling services that address predatory lending, counseling in conjunction with HUD's Homeownership Voucher Program, counseling services that specifically target colonias (rural communities on the U.S.-Mexico border), and Home Equity Conversion Mortgage counseling. ,margorP pihsrentraP tnemtsevnI EMOH ehT.21 elbaT 9002YF-8002YF )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC )latot( EMOH 407,1 769,1 769,1 a stnarg alumroF 826,1 309,1 739,1 evitaitinI tnemyapnwoD maerD naciremA 01 05 01 ecnatsissa lacinhceT 31 01 51 ecnatsissa gnilesnuoc gnisuoH 05 b b refsnart dnuf latipac gnikroW 3 4 4 gnilesnuoC gnisuoH b 56 56 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ .gnidnuor ot eud dda ton yam slatoT :etoN .saera ralusni rof gnidnuf sedulcnI .a ,sraey tsap nI .tnuocca etarapes a ni noillim 56$ ta gnilesnuoc gnisuoh gnidnuf desoporp tegdub 9002YF ehT .b dluow 1623 .S .margorp EMOH eht nihtiw edisa-tes a sa dedivorp neeb sah gnilesnuoc gnisuoh rof gnidnuf .tnediserP eht yb detseuqer sa ,tnuocca etarapes a ni gnilesnuoc gnisuoh dnuf The President's FY2009 budget requested a $275 million increase in funding for HOME formula grants over the FY2008 funding level. HUD's Congressional Budget Justifications identify the HOME program as key to the President's goal of increasing homeownership opportunities, especially for minorities. They also cite the program's relatively strong rating from the Office of Management and Budget's (OMB) Program Assessment and Rating Tool evaluation. According to HUD's Congressional Budget Justifications, OMB found that the program "has a clear purpose, strong management, and can demonstrate results." S. 3261 would provide $1,937 million for formula grants, just under 2% more than the President's requested level and a nearly 19% increase over the FY2008 level. ¢ The President's budget requested a 400% increase in funding for ADDI, from $10 million in FY2008 to $40 million in FY2009. The program was originally authorized through the end of FY2007 at $200 million per year, although it has never been funded at more than $86 million. The program was slated to sunset at the end of FY2007, but it was continued through FY2008 by the FY2008 appropriations law. The President's FY2009 budget requested language to extend the program through FY2011. S. 3261 would provide $10 million for ADDI, an amount equal to the FY2008 funding level. The bill includes language to extend the authorization for ADDI, as requested by the President. In each of the past several years, the President has requested that Congress provide funding for housing counseling assistance in a separate account, and each year, Congress has continued to fund it as a set-aside within the HOME account. For FY2009, the President's budget again requested that housing counseling be funded separately from HOME, at $15 million more than it was funded in FY2008. HUD's Congressional Budget Justifications cite the housing counseling program's ability to aid troubled homeowners during the current period of increased mortgage defaults and foreclosures as the reason behind the request for increased funding. S. 3261 would fund housing counseling in a separate account, at the President's requested level ($65 million). ¢ This account funds the Self-Help Housing Opportunity Program (SHOP) program and several set- asides. Through the SHOP program, HUD provides grants to national and regional organizations and consortia that have experience in providing or facilitating self-help homeownership opportunities. Prospective home buyers and volunteers provide "sweat equity" by contributing labor toward the construction of their homes. 31 elbaT ,seitinutroppO pihsrenwoemoH pleH fleS . 9002YF-8002YF )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC seitinutroppO pihsrenwoemoH pleH fleS 06 04 66 )POHS( pihsrenwoemoH pleH fleS 72 04 72 ecnatsissA lacinhceT 0 1< 0 dna .veD .mmoC gnidliuB yticapaC 43 0 53 agnisuoH elbadroffA licnuoC ecnatsissA gnisuoH b 0 4 licnuoC gnisuoH naidnI naciremA lanoitaN c 0 0 azaR aL fo licnuoC lanoitaN d 0 0 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ troppus ot desu eb detairporppa tnuoma latot eht fo noillim 5$ ot pu taht gnitcerid egaugnal sedulcnI .a .saera larur ni seitivitca gnidliub yticapac .noillim 3$ fo level gnidnuf a htiw tnuoccabus evitaitinI doohrobhgieN s'FDC ni dedulcni sdnuF .b .noillim 1$ fo level gnidnuf a htiw tnuoccabus evitaitinI doohrobhgieN s'FDC ni dedulcni sdnuF .c .noillim 1$ fo level gnidnuf a htiw tnuoccabus evitaitinI doohrobhgieN s'FDC ni dedulcni sdnuF .d The President's FY2009 budget requested $40 million for the SHOP program, including just under $1 million for technical assistance. The President's budget did not include funding for Section 4 (capacity building) grants. These grants are usually awarded to four national intermediaries--National Community Development Initiative (Living Cities), the Local Initiative Support Corporation, the Enterprise Foundation, and Habitat for Humanity. Recipients use the funds to develop the capacity and ability of local community development corporations and community housing development organizations to develop and manage community development and affordable housing projects and programs. S. 3261, as reported by the Senate Appropriations Committee, recommended an appropriation of $66 million for the Self-Help Homeownership Opportunities account. This is $6 million more than appropriated for FY2008 and $26 million more than requested by the Administration. The bill includes $35 million for capacity-building grants to be awarded to the Enterprise Foundation, the Local Initiative Support Corporation, and Habitat for Humanity. This is $1 million more than appropriated in FY2008. The bill would also appropriate $4 million to be awarded to the Housing Assistance Council for capacity-building activities in rural areas. Homeless Assistance Grants is the blanket title given to four homeless programs authorized by the McKinney-Vento Homeless Assistance Act (P.L. 100-77) and administered by HUD. Three of the four programs are competitive grants: the Supportive Housing Program (SHP), the Shelter Plus Care program (S+C), and the Section 8 Moderate Rehabilitation Assistance for Single Room Occupancy program (SRO). Funding for the fourth HUD program, the Emergency Shelter Grants program (ESG), is distributed via a formula allocation to states and local communities. The Homeless Assistance Grants are codified at Title 42, Chapter 119, Subchapter IV of the U.S. Code. (For more information about the Homeless Assistance Grants, see CRS Report RL33764, The HUD Homeless Assistance Grants: Distribution of Funds, by Libby Perl). 9002YF-8002YF ,smargorP sselemoH DUH .41 elbaT )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC stnarG ecnatsissA sselemoH 685,1 636,1 766,1 stnarG evititepmoC dna alumroF a 226,1 a ataD/ecnatsissA lacinhceT 8 8 8 dnuF latipaC gnikroW 2 3 b 3 margorP noitartsnomeD gnisuoH-eR dipaR 52 3 0 ssensselemoH fo noitneverP eht rof margorP noitartsnomeD 0 0 01 snareteV gnomA htuoY sselemoH tsissA ot sledoM gnisuoH fo noitaulavE 0 0 3 lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ tegduB .deificeps ton si tnuomA .a fo noitaulave dna dnuf dluow margorP noitartsnomeD gnisuoH-eR dipaR eht rof desoporp noillim 3$ ehT .b .margorp eht Funding levels for the Homeless Assistance Grants have increased steadily since FY2005, from $1,230 million in that year to $1,586 million in FY2008. For FY2009, the President proposed to again increase funding for the grants, to $1,636 million. For the seventh year in a row, the Administration's budget proposed to consolidate the three competitive Homeless Assistance Grants--SHP, S+C, and SRO--into one competitive grant. The proposed consolidated grant would include up to $50 million for a Samaritan Housing Initiative, which would provide permanent supportive housing for chronically homeless individuals--those who have been homeless for long periods of time and who have a disability. This proposal is similar to an incentive currently provided in the Homeless Assistance Grants application process. In addition to the Homeless Assistance Grants, the President's budget recommended $75 million for Section 8 vouchers for homeless veterans (see earlier discussion of new incremental vouchers under Section 8 tenant-based rental assistance). Funding for these vouchers would be provided through the Section 8 tenant-based account, and not through the Homeless Assistance Grants. About 1,800 of these vouchers were initially provided for homeless veterans through a collaboration between HUD and the Department of Veterans Affairs (VA) called HUD-VA Supported Housing, or HUD-VASH. Approximately 1,000 of these vouchers are still used by veterans today. In FY2008, Congress appropriated $75 million for additional HUD-VASH vouchers. On April 16, 2008, HUD, together with the VA, announced the communities that would receive HUD-VASH vouchers; a total of 10,070 vouchers will be distributed. The amount requested by the President for FY2009 would likely fund approximately the same number of vouchers. The Senate Appropriations Committee-approved FY2009 funding bill, S. 3261, would appropriate a total of $1,667 million for the Homeless Assistance Grants, which is $81 million more than the FY2008 enacted level and $31 million more than the President's request. Of the amount requested by the Appropriations Committee, $10 million would be available for a demonstration program for the prevention of homelessness among veterans. Under the demonstration program, HUD would collaborate with the VA and the Department of Labor (DOL) and would provide funding to local homeless assistance organizations, which would in turn provide housing and services to veterans who are at risk of homelessness or are temporarily homeless. The Senate bill would also provide $3 million to evaluate housing models that are most effective at preventing and ending homelessness among youth (those age 16-24). Like the President's request, the Senate Appropriations Committee bill would provide $75 million in the Section 8 tenant-based rental assistance account for new Section 8 vouchers for homeless veterans in FY2009. This would fund approximately 10,000 new vouchers. Unlike the President's request, S. 3261 does not set aside funding for a Samaritan initiative to provide permanent supportive housing for chronically homeless individuals. According to the committee report (S.Rept. 110-418), "HUD already targets funding to the chronically homeless, and the Committee believes that increased funding should be made available for both homeless families and homeless individuals." ¢ Formerly known together as Housing for Special Populations, the Section 202 Housing for the Elderly program (12 U.S.C. §1701q) and the Section 811 Housing for Persons with Disabilities program (42 U.S.C. §8013) provide capital grants and ongoing project rental assistance contracts (PRAC) to developers of new subsidized housing for these populations. In addition, the Section 811 program provides vouchers for tenants with disabilities to use in the private housing market. The Housing for the Elderly appropriation includes funds for the Service Coordinator program and the Assisted Living Conversion program. (For more information on Section 202, see CRS Report RL33508, Section 202 and Other HUD Rental Housing Programs for Low-Income Elderly Residents, by Libby Perl). 9002YF-8002YF ,118 dna 202 snoitceS .51 elbaT )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC )202( ylredlE eht rof gnisuoH 537 045 567 CARP dna stnarG latipaC weN a 123 a stnemdnemA dna slaweneR CARP a 69 a srotanidrooC ecivreS 06 08 08 gniviL detsissA ot noisrevnoC rof stnarG 52 52 52 stnarG tnempoleved-erP 02 0 02 dnuF latipaC gnikroW 1 2 2 noitartsnomeD gnicnaniF gnigareveL 0 51 51 )118( delbasiD eht rof gnisuoH 732 061 052 CARP dna stnarG latipaC weN a 03 a stnemdnemA dna laweneR CARP a 23 a srehcuoV maertsniaM weN a 0 a laweneR rehcuoV maertsniaM 57 78 78 dnuF latipaC gnikroW 1 2 2 noitartsnomeD gnicnaniF gnigareveL 0 01 01 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ .deificeps ton stnuomA .a In FY2009, the Administration's budget recommended reducing the overall funding level for the programs that provide housing and services for elderly households (defined by HUD as those with a head of household or spouse age 62 or older). The President's request would cut funding for these programs by nearly $200 million, from $735 million in FY2008, to $540 million in FY2009. For the Section 202 program, funding available for new capital grants and project rental assistance would be $321 million, down from the $566 million that is estimated to be available from the FY2008 appropriation. The proposed FY2009 allocation of $321 million would fund an estimated 2,300 units of Section 202 housing, compared to an estimated 4,100 in FY2008. Under the President's request, funding for the Service Coordinator program would increase from the amount appropriated in FY2008, from $60 million to $80 million, while funds for the Assisted Living Conversion program would remain the same, at $25 million. As in FY2008, the President has proposed to fund a leveraging financing demonstration program through the Housing for the Elderly account in FY2009. Through the program, HUD would work with private sector professionals to increase the use of mixed financing arrangements, such as incorporating Low-Income Housing Tax Credits, to develop Section 202 housing. The demonstration program would also identify changes to existing policy that might make mixed- finance developments more feasible. HUD's goal is that the program would leverage one dollar of outside financing for every dollar of Section 202 funding. S. 3261, as reported by the Senate Appropriations Committee, would provide a total of $765 million for the Housing for the Elderly account, including the Section 202 program, Service Coordinators, and the Assisted Living Conversion program. The amount recommended by the Senate Appropriations Committee is $30 million more than the amount provided in FY2008, and $225 million more than the President's budget request. Of the amount that would be appropriated in S. 3261, $80 million would be available for the Service Coordinator program, the same level requested by the President, and a $20 million increase over FY2008. The bill would provide level funding of $25 million for the Assisted Living Conversion program. Like the President's request, S. 3261 would appropriate $15 million for a leveraging financing demonstration program, described above. S. 3261 includes language that would make a change to the refinancing provisions of the statute governing the Section 202 program. Under current law, Section 202 owners may refinance their properties if they agree to operate the project under terms at least as advantageous to tenants as the terms of the existing loan and if the refinancing results in a lower interest rate and reduced debt service. Under the language in S. 3261, the new loan would not be required to have a lower interest rate as long as the project owner would use the new funding to address the project's physical needs. This would make it possible for older Section 202 developments, many of which have loans with interest rates of 3%, to refinance their loans and use the proceeds to make improvements to the property. The Senate Appropriations Committee bill also includes a provision that would require HUD to provide enhanced vouchers to Section 202 tenants in cases where insufficient project-based rental assistance is made available to the development. The President's budget proposed to reduce funding for the Section 811 Housing for Persons with Disabilities program in FY2009 to $160 million, down from $237 million in FY2008. Of the amount proposed by the President, just under $30 million would be available for new capital grants and project rental assistance, which HUD estimates would support 232 new rental units. In FY2008, approximately $142 million was made available for capital grants and project rental assistance, which is expected to support 1,050 units. The Administration recommendation would not provide any funding for new Section 811 vouchers for persons with disabilities. Although the FY2008 appropriation did not contain funds for new vouchers through the Section 811 program, it provided $30 million for vouchers for non-elderly disabled families through the Section 8 account (see earlier discussion). For FY2009, the Administration has proposed that funds from the Service Coordinator program, provided through the Housing for the Elderly Account, be provided for Section 811 developments as well as developments designed for elderly households. The HUD budget documents note that legislation to expand the Service Coordinator program to include Section 811 could be introduced this Congress, and if it is, that approximately $19 million of the $80 million requested for new Service Coordinator contracts would be available to Section 811 developments. For the second year in a row, the President has proposed to fund a leveraging financing demonstration program, similar to the one proposed for the Section 202 program. The President's budget would make $10 million available for this program, which would encourage mixed finance developments for persons with disabilities. The Senate Appropriations Committee-passed bill would provide $250 million for the Section 811 program, an increase of $13 million over FY2008 and $90 million more than the President's request. As in the committee's proposed Section 202 appropriation, $10 million of the funds appropriated for Section 811 would support a leveraging financing demonstration program. The FHA administers a variety of mortgage insurance programs that insure lenders against loss from loan defaults by borrowers. Through FHA insurance, lenders make loans that otherwise may not be available, and enable borrowers to obtain loans for home purchase and home improvement, as well as for the purchase, repair, or construction of apartments, hospitals, and nursing homes. The programs are administered through two program accounts: the Mutual Mortgage Insurance/Cooperative Management Housing Insurance fund account (MMI/CMHI) and the General Insurance/Special Risk Insurance fund account (GI/SRI). The MMI/CMHI fund provides insurance for home mortgages. The GI/SRI fund provides insurance for more risky home mortgages, for multifamily rental housing, and for an assortment of special-purpose loans such as hospitals and nursing homes. (For more information, see CRS Report RS20530, FHA-Insured Home Loans: An Overview, by Bruce E. Foote and Katie Jones). 61 elbaT 9002YF-8002YF ,noitartsinimdA gnisuoH laredeF . )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC snoitairporppA AHF latoT teN )18( 74 17 IMM ,snoitairporppA teN 77 621 041 sesnepxE latoT 77 611 041 stpiecer gnittesffO 0 0 0 IRS/IG morf devom smargorP AN 01 0 IRS/IG ,snoitairporppA teN )851( )97( )96( sesnepxE latoT 29 17 17 stpiecer gnittesffO )052( )041( 041 IMM ot smargorp evoM AN )01( 0 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ In past years, receipts to the MMI fund have exceeded expenses, so the MMI fund did not need appropriations for credit subsidy. The FY2009 Budget estimated that, if no programmatic changes were made, the MMI fund would need either credit subsidy or increases in insurance premiums to continue operation. The Budget proposed to permit FHA to set insurance premiums on the basis of the risk that the borrowers pose to the insurance fund, and it proposed to set the rate at a level that would avoid the need for subsidy appropriations. Barring the authority to establish risk-based premiums, the Budget proposed that FHA would use its existing authority to increase the insurance premiums charged to borrowers. The Budget assumed that the increased premiums coupled with legislative and programmatic changes would avoid the need for credit subsidy appropriations. Legislative changes proposed in the budget would include reform of the FHA single family insurance program to enable FHA to be more flexible in responding to changes in the mortgage market, and to provide a lower cost alternative to borrowers who might otherwise choose subprime mortgage products or even become the victims of predatory lending. The Budget proposed to move several single-family programs from the GI/SRI fund to the MMI fund. The Budget proposed that no new loan insurance would be provided to households using seller- financed downpayments to meet their downpayment requirements. The Budget and S. 3261, as passed by the Senate Appropriations Committee, recommended a commitment limitation of $185 billion for the MMI fund. The Budget requested a commitment limitation of $35 billion for the GI/SRI fund, while the Senate Committee recommended a commitment limitation of $45 billion. The committee report (S.Rept. 110-418) suggests that, in the wake of the present housing crisis, FHA must reestablish itself as America's mortgage lender. The committee suggests that FHA should work to ensure that families are able to purchase and stay in their homes with affordable loans that they fully understand. The committee directs HUD to provide a report to the Committee on Appropriations within 90 days on the proper role of HUD and to establish an Office of Predatory Lending. Working in conjunction with the Department of Justice, the new office would establish rules and requirements to protect the public from fraud and abuse in housing loans. Ginnie Mae is the entity within HUD that guarantees the timely payment of principal and interest on securities backed by mortgages insured or guaranteed by FHA, the Department of Veterans Affairs (VA), or the Rural Housing Service. ,noitaicossA egagtroM lanoitaN tnemnrevoG .71 elbaT 9002YF-8002YF )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC noitairporppA teN )361( )071( )071( sesnepxE evitartsinimdA a b lasoporP evitalsigeL AN ]34[ stpieceR gnittesffO )361( )071( )071( lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ tegduB sesnepxe dna seiralas ediw-tnemtraped eht ni sesnepxe AMNG dednuf tca snoitairporppa 8002YF ehT .a .noillim 52.8$ ta tnuocca -tnemtraped eht ni sesnepxe AMNG dnuf ot eunitnoc ot sesoporp tseuqer tegdub 9002YF s'tnediserP ehT .b .noillim 65.8$ ta tnuocca sesnepxe dna seiralas ediw For FY2009, the President's budget proposes an administrative provision which would bring all of Ginnie Mae's administrative contract expenses under discretionary authority. This change is estimated to cost $43 million, which would be offset in the first year by savings from eliminating HUD's mandatory authority to fund these expenses. The Senate committee does not assume this change in the accounts. ¢ The Office of Policy Development and Research (PD&R) at HUD is responsible for maintaining current information on housing needs, market conditions, and existing programs, as well as conducting research on housing and community development issues. The Research and Technology account funds PD&R's core research activities including program evaluations and housing and community development-related surveys such as the American Housing Survey and the Survey of New Home Sales and Completions. The R&T account was expanded in FY2006 to fund Section 107 University Partnerships, which were previously funded as set-asides within the CDF account. Section 107 grants are awarded to institutions of higher education to assist in building partnerships with the communities in which they are located and to foster and support neighborhood development and revitalization. 9002YF-8002YF ,ygolonhce dna hcraeseR .81 elba T T )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC ygolonhceT dna hcraeseR 15 55 06 ygolonhceT dna hcraeseR eroC 32 14 03 )HTAP( gnisuoH ni ygolonhceT gnicnavdA rof spihsrentraP 5 0 5 spihsrentraP ytisrevinU /stnarG 701 noitceS 32 41 32 seitisrevinU & segelloC kcalB yllacirotsiH 9 5 9 snoitutitsnI gnivreS-cinapsiH 6 4 6 ydutS kroW tnempoleveD ytinummoC 0 0 0 snoitutitsnI gnivreS-naiiawaH evitaN dna evitaN naksalA 3 2 3 seitisrevinU dna segelloC labirT 5 2 5 pihsrentraP hcaertuO ytinummoC 0 0 0 yduts rehcuov gnisuoh desab-tnaneT 0 0 2 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ The Administration's FY2009 budget requested $55 million for research and development activities. The request would increase funding for R&T activities by about 6% or $3 million more than the $51 million appropriated in FY2008. This would be achieved by increasing the amount available for core research activities by 45% from $28 million in FY2008 to $41 million for FY2009. The proposed increase in core research funding would be offset by a proposed 41% decrease in funding for Section 107 Grants/University Partnerships. Under the Administration's budget request, funding for these programs would decline from $23 million to $14 million for FY2009. The Senate Appropriations Committee version of S. 3261 recommended $60 million for activities under the Research and Technology account. This is $9 million more than appropriated in FY2008 and $5 million more than requested by the Administration. The $60 million includes $23 million in grants for university-based community development grants, which is the same amount appropriated in FY2008 and $9 million more than requested by the Administration. The bill also includes $2 million to finance a study of the cost necessary to administer the tenant-based housing voucher assistance program. The committee report (S.Rept. 110-418) noted that the committee proposes to deny HUD its broad demonstration authority, noting that the committee believes HUD has used this authority in the past to administer new and unauthorized programs. S. 3261 would make future demonstrations subject to prior congressional approval. The Office of Fair Housing and Equal Opportunity enforces the Fair Housing Act and other civil rights laws that make it illegal to discriminate in the sale, rental, or financing of housing on the basis of race, color, religion, sex, national origin, disability, or family status. This is accomplished through the Fair Housing Assistance Program (FHAP) and the Fair Housing Initiatives Program (FHIP). FHAP provides grants to state and local agencies to enforce laws that are substantially equivalent to the federal Fair Housing Act. It provides grants on a non-competitive basis. FHIP provides funds for public and private fair housing groups, as well as state and local agencies, for activities that educate the public and housing industry about the fair housing laws. 91 elbaT 9002YF-8002YF ,smargorP gnisuoH riaF . )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC gnisuoH riaF 05 15 65 ecnatsissA gnisuoH riaF 62 52 72 sevitaitinI gnisuoH riaF 42 62 92 snoitalsnarT 1< 0 1< tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ The Budget requests $51 million for the fair housing programs, an increase of $1 million over the FY2008 level. The Senate committee recommends an appropriation of $56 million, a $6 million increase over the level appropriated for FY2008. The Budget requests $25 million for FHAP, whereas the Senate committee recommends $27 million for the program. The Budget requests $24 million for FHIP and proposed to use some of it for a Housing Discrimination Study. The Senate committee recommends over $28 million for FHIP, an increase of over $4 million from the FY2008 enacted level. The committee directs that $2 million of the increased funds be used solely to assist in the protection of the American public from mortgage rescue scams. The committee does not fund or authorize the Housing Discrimination Study proposed in the budget request. The President's budget would not continue funding for the program that creations and promotes the translation of materials to assistance persons with limited English proficiency, while the Senate Committee would fund it at $500,000. £ The Office of Lead Hazard Control at HUD administers both the Lead-Based Paint Hazard Control Grant Program and the Healthy Homes Initiative (HHI). Under the Lead-Based Paint Hazard Control Grant Program, HUD is authorized to make grants to states, localities, and Native American tribes to conduct lead-based paint hazard reduction and abatement activities in privately-owned low-income housing. Under the Healthy Homes Initiative, HUD conducts a number of activities designed to identify and address housing-related illnesses. 9002YF-8002YF ,lortnoC drazaH tniaP desaB-daeL .02 elbaT )sra llod fo snoillim ni( 9002YF 8002YF 9002YF etaneS detcanE tseuqeR .mmoC lortnoC drazaH daeL fo eciffO 541 611 541 tegduB lanoissergnoC DUH dna stnemucod tegduB 9002YF s'tnediserP eht fo sisab eht no SRC yb deraperP :ecruoS .snoitacifitsuJ The President's FY2009 budget requests a total of $116 million for the programs under the Office of Lead Hazard Control. This would be a reduction of $29 million from the FY2008 appropriation. The Senate committee recommends an appropriation of $145 million, the same as the FY2008 level. The committee noted that lead poisoning remains a serious childhood environmental condition and that significant lead risks remain in privately owned housing, particularly in unsubsidized low-income units. The committee encouraged HUD to work with grantees on its lead-based paint abatement hazards programs so that information is disclosed to the public on lead hazard abatements, risk assessment data, and blood lead levels through publications and internet sites. OFHEO is the office within HUD that is responsible for regulating the safety and soundness of Fannie Mae's and Freddie Mac's operations. The appropriations for OFHEO are completely offset by fees collected from Fannie Mae and Freddie Mac. For FY2009, the Budget and the Senate committee recommend an appropriation of over $66 million, an increase of $600,000 over the FY2008 appropriation. Maggie McCarty Eugene Boyd Specialist in Housing Analyst in Federalism and Economic Development mmccarty@crs.loc.gov, 7-2163 Policy eboyd@crs.loc.gov, 7-8689 Libby Perl Oscar R. Gonzales Analyst in Housing Analyst in Economic Development Policy eperl@crs.loc.gov, 7-7806 ogonzales@crs.loc.gov, 7-0764 Bruce E. Foote Analyst in Housing bfoote@crs.loc.gov, 7-7805 ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-RL34504