Affordable housing groups are speaking out against President Donald Trump’s proposed budget, which would slash $6.2 billion in funding from the U.S. Department of Housing and Urban Development and eliminate several affordable housing programs.
In March, the administration released its preliminary budget proposal, which outlined the 13.2% budget cut. Now, the full budget proposal released Tuesday outlines which housing programs would make the cut, and which would be eliminated.
HUD announced its support of the proposal, explaining the department will continue to provide homeownership to 4.5 million households while giving a greater role to state and local governments.
Steven Mnuchin, U.S. Department of the Treasury secretary, also spoke out in support for the newly proposed plan.
Affordable housing advocates, on the other hand, are not so quick to stand behind the new plan.
“We’re not talking about marginal cuts here,” said Chris Estes, National Housing Conference president and CEO. “The budget proposes complete elimination of federal help that communities big and small rely on.”
“Homeownership investments, rental vouchers, community development investments in rural towns and urban neighborhoods—this budget would be catastrophic for all of these investments,” Estes said.
NHC explained due to already limited resources, only 25% of those who are eligible for help actually receive it.
“This will be a huge blow to local and state economies nationwide as communities struggle with housing costs for their workforce and most vulnerable residents,” Estes said.
A recent study from GOBankingRates shows even some of the most affordable metros in the U.S. still aren’t very affordable.
“These cuts are short-sighted and end up costing government and the economy more than they save,” Estes said. “Instead, we need the federal government to invest in the good-quality, stable homes that make people healthier, help kids succeed in school and keep a strong workforce in the community.”
But NHC isn’t the only advocate to speak out against the proposed budget. The Community Home Lenders Association explained the Federal Housing Agency’s $7.1 billion in projected net profits show homebuyers are being overcharged for their FHA loans. And while it supports a greater effort for new FHA technology, CHLA claims the money for that should come out of the expected profits.
“The projected $7.1 billion in net profits on new FHA loans next year shows that FHA borrowers, particularly first-time homebuyers, continue to be overcharged,” CHLA Executive Director Scott Olson said. “CHLA therefore renews its call to cut annual premiums and to end the current Life of Loan premium policy.”
“And while CHLA supports $30 million for new FHA technology, it believes this should be funded out of this large FHA surplus, instead of creating a new fee that will be passed along to homebuyers,” Olson said.
The budget proposal projects a net profit of 3.18% on each new FHA loan in 2018.
And Douglas Rice, Center on Budget and Policy Priorities senior policy analyst, wrote this blog on how Trump’s budget would increase homelessness and hardship in every state.