Rick Sharga: Is this the end of the housing recovery?

Rick Sharga: Is this the end of the housing recovery?

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Lending / The Ticker

Congress takes a bite out of housing agency budgets

Gives HUD $687 million less

tighten money

A proposed $1 trillion congressional spending bill means less money for key housing agencies, analysts claim.

Congress released its proposed spending bill for this week, showing a proposed $1.012 trillion in spending for fiscal 2014. Unfortunately, the Department of Housing and Urban Development is one of the losers with $32.8 billion in allocated funding — a $687 million reduction when compared to 2013 budget levels.

"The bulk of the spending cuts are localized in programs supporting community planning and development programs," analysts with Compass Point Research & Trading Group pointed out.

Additionally, the Federal Housing Administration received $45 million of funding to support housing counseling efforts.

"We continue to believe that there is a conversation in D.C. regarding the merits of lowering mortgage insurance premiums (MIPs) if certain borrowers attend housing counseling," the report explained.

If there is a change in the MIPs, it would directly impact borrower pricing decisions, Compass Point said.

Congress will pass a short continuing resolution to avoid a Jan. 15 deadline, but is expected to pass the broader budget measure by the end of this week. 

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