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Real Estate

Here’s what Trump’s proposed budget means for housing

And the affordable housing programs it would cut

President Donald Trump officially released his proposal for the 2018 federal budget which includes a $6.2 billion cut to the U.S. Department of Housing and Urban Development.

The cut was previously announced in the president’s preliminary budget proposal in March. Now, the full budget proposal released Tuesday gives insight into the allocation of funds for HUD.

HUD’s funding would decrease about 13.2% to $40.68 billion under the proposed budget. But how does the department feel about its possible upcoming funding cut? HUD stands behind the budget, saying department would continue to provide rental assistance to 4.5 million households while giving a greater role to state and local governments.

The cuts would be implemented through rental assistance reforms and eliminating funding for certain programs, according to a release from HUD. The department would also see savings through streamlining HUD’s internal operations.

“This Budget reflects this administration’s commitment to fiscal responsibility while continuing HUD’s core support of our most vulnerable households,” HUD Secretary Ben Carson said. “We will work very closely with Congress to support the critical work of our agency as we vigorously pursue new approaches to help work-eligible households achieve self-sufficiency.”

The budget will seeks to reform programs including the Housing Choice Voucher, Public Housing Operating/Capital Fund, Project-Based Rental Assistance, Housing for the Elderly and Housing for Persons with Disabilities. The administration will look to provide funding flexibilities as well as ease regulatory burdens on the programs.

The budget also proposes various changes to tenant rent contributions, with some protections for families who experience hardships.

Here is one program the administration will seek to grow, from HUD’s release:

The Administration proposes removing the statutory limit on the number of public housing units that can participate in HUD’s Rental Assistance Demonstration (RAD). Currently, only 225,000 units of public housing can take advantage of this affordable housing preservation program. RAD is an important strategy to recapitalize the nation’s at-risk public housing stock, which requires billions of dollars to make critical repairs and improvements. In RAD’s short history, the program has generated more than $4 billion in private investment in public housing, preserving more than 61,000 units of affordable housing. The 2018 Budget also requests that senior housing developments participating in HUD’s Section 202 Program become eligible to participate in RAD to help preserve housing for the elderly.

The budget seeks to strengthen the Federal Housing Agency’s Home Equity Conversion Mortgage, or its reverse mortgage program. It will also provide $30 million towards modernizing the FHA’s system and updating its programming language.

Under the new proposal, Ginnie Mae will receive $500 billion in new guarantee authority as it seeks to create more affordable housing options.

HUD’s fair housing mission is set to receive $65.3 million, the same amount is received the previous three years.

The proposal also seeks to eliminate several programs which it claims have not demonstrated a measurable impact on communities. Some of those programs include the Community Development Block Grant Program, Choice Neighborhoods Initiative, HOME Investment Partnerships Program and the Self-Help Homeownership Opportunity Program.

The administration explained, in these instances, states and local governments are better positioned to meet community needs.

As lead-paint hazards continue to threaten various communities, the budget requests $130 million to promote lead-safe housing.

The budget would provide $1.32 billion for HUD’s internal operations and $250 million for the department’s Information Technology Fund, which includes $10 million for cybersecurity and modernization investments.

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