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Sequester creates cracks in HUD's structure

The U.S. Department of Housing and Urban Development is downsizing by consolidating its Office of Multifamily Programs into 10 sites, the agency announced Wednesday.

The decision to restructure HUD comes at a time when sequester cuts are impacting every aspect of the economy, including federal agencies.

The restructuring of HUD is expected to generate up to $45 million in annual savings once complete after consolidating field employees — who are now scattered throughout the nation in 50 offices — into 10 offices that report to five multifamily hubs.

The office’s restructuring plan involves streamlining multifamily’s organization at both the headquarters level and in the field, while implementing several other operational improvements.

This more streamlined model will allow more consistent, efficient processing of loans and servicing of existing assets and will help ensure continued work that creates affordable rental housing opportunities, HUD said.

"The current organizational model for HUD is not sustainable from a financial and a service delivery point of view," said Maurice Jones, deputy secretary of HUD. "We’re in a different budget environment and we’re at a point where we must make some extremely tough choices."

The implementation will undoubtedly challenge the agency’s employees and as a result, HUD is giving all employees the opportunity to continue working at the agency though in some cases in a new location or role.

Completion of the entire restructuring process is expected to take two and a half years, with construction beginning this fall.

The Office of Multifamily Programs provide mortgage insurance to approved lenders to facilitate the construction, substantial rehabilitation, purchase and refinancing of multifamily housing projects as well as the administering a number of project-based assistance programs.

This more streamlined model will allow more consistent, efficient processing of loans and servicing of existing assets and will help ensure continued work that creates affordable rental housing opportunities, according to HUD. 

"We have to change in order to be nimble and keep pace with the marketplace by leveraging technology, reducing our footprint as appropriate, and enhancing customer service in ways that will help ensure that we perform as a 21st century institution," said Marie Head, deputy secretary for multifamily housing programs.

She added, "In today’s budget climate, we must also look for every opportunity to increase our operating efficiency, but we also have to keep in mind the impact of these changes on our employees."

HUD’s Office of Field Policy and Management is also managing towards the future, closing 16 of its 80 field offices this year in a cost-cutting move that is estimated to save the agency between $110 and $150 million over the next 10 years. 

The closures, which will be completed in 2014, will affect 120 employees.

"The most difficult part of implementing these changes is the appreciation of the very personal impact they have on employees who have dedicated years of their life to the mission of HUD," Jones said.

He added, "Realistically, there is no way to make the kind of structural changes we are talking about without there being some impact on our staff, but, again, we are committed to taking all necessary steps to reduce the negative impact they will feel." 

cmlynski@housingwire.com

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