Trump Admin Proposes Higher Funding for HUD

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President Trump announced last week that his proposal for the 2019 fiscal budget would allot a total of $41.24 billion to the US Department of Housing and Urban Development (HUD), which is an increase of 1% from $40.7 billion in 2017. Last year, the president reduced HUD’s budget by $6.2 billion.

Originally, the Trump administration issued a budget that would slash the department’s budget to $39.2 billion. This would have brought total cuts over the last 24 months to $8.8 billion or 18.3%. But late last week, Trump signed a domestic spending bill that reopened the US government after its second shutdown this year.

Due to the budget deal, the Trump administration changed its 2019 budget request and released the new funding request for HUD totaling $41,24 billion.

Ben Carson has a plan to turn-around FHA.

The new proposal focuses funds on several key initiatives. The first is to reduce homelessness. The budget has a request for a record $2.4 billion to support various housing and service programs throughout the country for people living on the streets and homeless shelters. This is a boost of $133 million from the last budget request.

HUD Secretary Ben Carson told the media that the Trump administration budget lays out a government vision that is effective, accountable and efficient. He stated that the budget allows for a strong national defense, sets the table for better economic growth and opportunity by cutting regulations and taxes, and recognizes that it is important to face serious fiscal challenges.

The Trump budget proposal also requests $600 million for the Housing for the Elderly program and $140 million for the Housing for Persons with Disabilities program. These changes equal an increase of $91 million and $19 million from the last budget request.

The proposal would change current rent assistance programs as it would merge the Public Housing Capital Fund into the Public Housing Operating Fund with less funding overall. The new, combined operating fund would be given more flexibility to fund capital improvements, HUD stated. HUD said this would better support needs in towns and cities by letting more flexibility to be exercised for every FHA to make decisions that best serve the needs of locals.

FHA Also Strongly Supported in Trump Budget

The FHA mortgage insurance program also receives strong support by giving up to $400 billion in loan guarantee authority. This gives FHA the ability to underwrite even more loans to people with lower credit scores and incomes who meet underwriting guidelines established by FHA. The funding also will allow FHA to update its IT systems; many of them are based upon very old COBOL programming language.

The Trump budget further requests $500 billion in new loan guarantee authority for Ginnie Mae, which is part of HUD. It asks for $62 million to provide more support for the fair housing mission of HUD.

The Trump administration also is looking to cut the Community Development Block Grant Program. This would shift the work of the block grant program from the feds to state and local governments. Since 1980, HUD studies have determined that the CDBG is not properly focused on poor communities and has not shown any strong impact upon the communities it serves.

The president also is proposing to cut the Choice Neighborhoods program, HOME Investment Partnership Program and the Self Help Homeownership Opportunity program. The argument is that state and local governments would be more effective to administer such programs in their local areas.

The budget also asks for $145 million to boost healthy and lead-free housing; this is an increase of $15 million from last year. The budget also would fund EnVision Centers, which is a pet project of HUD Secretary Carson. The centers are for learning, especially for young mothers who no longer educate themselves after they have children. Carson has said that New York City is seen as a possible spot for the first of these centers where low income mothers can access affordable daycare while learning computer code, as well as essential life skills including balancing a checkbook and unclogging a toilet.

The bottom line is that President Trump is continuing to overall support the mission of HUD. His focus seems to be on efficiency and accountability, and shifting some efforts to the state and local level where appropriate.

It is especially noteworthy that he continues to strongly support FHA with more funding and loan authority. FHA is one of the best loan programs in the country for people who have lower credit scores, incomes and down payments. With an FHA loan, you can get a home with only 3.5% down, and you can qualify for a loan with a lower credit score and past credit problems. This brings home ownership more within reach for millions of Americans.

References: https://www.housingwire.com/articles/42505-trumps-proposed-2019-budget-gives-huds-funding-a-boost