Overall, the Department of Housing and Urban Development (HUD) is funded at $28.5 billion for FY 2006, a decrease of 11.5% from the current year, but much of the reduction stems from the plan to move its CDBG program to the Commerce Department.
While proposed allocations are similar to this year’s for many programs, others have been slated for drastic cuts. In areas of interest to housing, the President’s budget plan:
- Calls once again for a homeownership tax credit initiative to spur production of affordable housing and a Federal Housing Administration single-family zero downpayment mortgage insurance program
- Provides the FHA multifamily insurance programs with $35 billion in loan commitment authority, ensuring that they would not be shut down during FY 2006
- Creates a new regulator for government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Banks that would be housed in the Department of the Treasury. Under terms of the proposal, the regulator would have the authority to place a failing GSE into receivership, to adjust both risk-based and minimum capital requirements, to exercise independent supervisory authority and to review ongoing activities and approve new programs in consultation with HUD.
- Eliminates the Partnership for Advancing Technology in Housing (PATH), HOPE VI and brownfields redevelopment programs.
- Slashes funding for the Section 515 Rural Rental Housing Direct Loans program to $27 million from $100 million in FY 2005.
- Proposes $15.8 bllion for the Section 8 Housing Voucher program, an increase of about $1 billion over FY 2005. The bulk of the proposed spending, $14 billion, is earmarked for renewing expiring Section 8 tenant-based vouchers, including renewals for enhanced vouchers.
- Reduces Jobs Corps program funding by $29.3 million, to $1.52 billion
- Calls for replacing the Carl D. Perkins vocational education grant program with a new state block grant, and cuts funding for that program by almost $1 billion
- Calls for the repeal of the Byrd Amendment, which was sponsored by Sen. Robert Byrd (D-W. Va.), and allows U.S. companies to receive duties collected from foreign rivals. The World Trade Organization has ruled this practice illegal.
NAHB continues to analyze the President’s budget package, and will be working with congressional appropriators as they craft the FY 2006 spending bills.
Given the austere budget presented to Capitol Hill, the scores of key programs that have been cut or eliminated and the number of lawmakers who have already voiced concerns over the President’s budget, the ensuing appropriations process is likely to be drawn out and contentious.
For more information, e-mail Jenna Morgan Hamilton at NAHB, or call her at 800-368-5242 x8407.
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