HUD
No. 01-038
Further Information:
In the Washington, DC area: 202/708-0685
Or contact your local HUD office |
For
Release
Monday
April 9, 2001 |
PRESIDENT'S BUDGET GREATLY EXPANDS HOMEOWNERSHIP OPPORTUNITIES
en español
Full Details about HUD's 2002 Budget
WASHINGTON - The U.S. Department of Housing and Urban Development will help
more Americans achieve homeownership and better serve communities across the
nation with President Bush's proposed 6.8 percent increase in HUD's fiscal year
2002 budget, Secretary Mel Martinez said today.
"This budget helps more people, provides opportunities for Americans in low
income communities and provides more support for those with special needs,"
Martinez explained.
Flanked by two Maryland families soon making the move from renters to homeowners,
Martinez revealed specific details of President Bush's proposed $30.4 billion
budget, including several key programs that focus on minority home ownership.
"We were living in a one bedroom apartment with the three boys sleeping in
one room and me on the couch," explained future homeowner Helena Spencer. "Habitat
for Humanity and HUD are making it possible for us to move away from the drugs
and the violence."
"This budget provides Habitat for Humanity and organizations like Habitat with
additional resources to help more families," Martinez said.
"We want to give as many Americans as possible a stake in their neighborhood
and a concern for its future," Martinez said. "The sad fact is only 46 percent
of Hispanic and African American families own their own homes. And we must do
better."
The President's budget includes a Renewing the Dream tax credit to encourage
investors to develop housing for low-income families. This tax credit will help
build 100,000 new homes in low-income areas over the next five years.
This budget also adds a new initiative called the American Dream Down Payment
Fund, to help low-income people with their down payment on a home of their
own. By putting $1 billion into the American Dream Fund over the next five years,
HUD's goal is to make owners of 650,000 low-income families.
HUD will also offer assistance to low-income renters who want to become homeowners
by expanding the use of Section 8 vouchers for home ownership. "Bringing the
pride of home ownership to more and more Americans is definitely one of the
goals of this budget," Martinez added.
Martinez also highlighted other parts of the budget proposal:
Gives More Families the Opportunity for Homeownership
- Proposes Hybrid Adjustable Rate Mortgages. For fiscal year 2002,
HUD will seek authority to allow FHA to offer families a hybrid adjustable
rate mortgage, reducing families' initial homeownership costs by combining
a low fixed rate in the early years with a rate that later adjusts with the
market.
- Proposes to raise FHA Multifamily Loan Limits by 25 percent. The
loan limits were last increased in 1992. A 25 percent increase, when combined
with the existing ability to multiply loan limits by up to 240 percent, will
mean that FHA multifamily insurance will be available to help increase production
in virtually every region of the country.
Increases Support for Low-Income Rental Housing Assistance
- Adds $197 million for 34,000 additional Section 8 housing vouchers. The
President's budget renews all expiring contracts with landlords at a cost
of $15.1 billion to continue providing rental assistance to more than 2.8
million families currently receiving Section 8 assistance, and includes $197
million for 34,000 new housing vouchers.
- Increases Public Housing operating subsidies by $150 million. The
President's budget funds the Public Housing Operating Fund at $3.38 billion,
or $150 million more than 2001, to help public housing authorities cover utility
rate increases and other high priorities.
Provides Additional Support to Populations with Special Needs
- Adds $20 million to house 3,700 additional people with AIDS. The budget
provides an additional $20 million for a total of $277 million to house 3,700
more people with AIDS, expanding the number of eligible jurisdictions based
on projections of AIDS cases by the Centers for Disease Control and Prevention.
- Provides $20 million for a Presidential initiative to improve access
for the disabled. The budget provides $20 million in the Community Development
Block Grant to fund competitive grants to civic, community and religiously
affiliated organizations exempt from the Americans with Disabilities Act to
make approximately 200 additional facilities accessible to the disabled.
Improves Conditions and Opportunities in Low-Income Communities
- Contains $80 million for a Presidential initiative for Community Technology
Centers. The budget provides $80 million in the Community Development
Block Grant program to fund competitive grants to help communities create
or expand technology centers in high poverty areas and provide technical assistance
to those centers.
- Increases funding to reduce lead paint hazards by $10 million. The
budget provides an additional $10 million for a total of $110 million that,
when combined with increased private sector leveraging, supports a ten-year
strategy to eliminate lead paint hazards in 2.3 million private housing units
occupied by low-income children.
Martinez said the budget proposal also refocuses HUD on its core mission and
ends duplicative programs in the Federal government.
"As with every budget there are tough choices,” Martinez said. “We chose to
eliminate programs that were duplicative. Eliminating a federal program is always
going to be unpopular with someone but we will not shy away from smart cuts
for the sake of popularity.”
Eliminates Funding of One-Time Projects in Block Grant Programs
- Reduces earmarks for special projects within CDBG by $411 million.
The budget continues Community Development Block Grant formula funding at
the 2001 level of $4.4 billion, but does not provide recurring funding for
$411 million appropriated in 2001 for earmarked projects. The net reduction
to the program is only $311 million from the 2001 level.
Focuses HUD on its Core Mission and Ends Duplicative Programs
- Terminates the $309 Million Public Housing Drug Elimination program.
The fiscal year 2002 budget proposes to consolidate and streamline the Department's
anti-drug use activities. Public housing authorities can currently use funds
from the Public Housing Operating Fund program, the Capital Fund program and
the Drug Elimination Grant program for anti-drug use and anti-crime activities.
The Operating Fund program has been increased by $150 million for these activities
and other purposes, as decided by local priorities. Housing authorities will
be encouraged to continue major partnerships with local police departments.
In addition, the Department will continue to work closely with other Federal
agencies such as Justice, Health and Human Services and the Office of National
Drug Control Policy to administer proven drug prevention and intervention
programs, and with faith-based organizations that also provide treatment and
counseling.
- Terminates the $25 million Rural Housing and Economic Development program.
The budget terminates the Rural Housing and Economic Development program,
which began in 1999, because it duplicates several programs including CDBG
and those of the U.S. Department of Agriculture.
- Reduces by $700 million the Public Housing Capital Fund. The $2.3
billion requested for the Public Housing Capital Fund fully funds new capital
needed for public housing, but is $700 million below the 2001 level. Public
housing authorities can address the backlog of capital needs by using more
than $6 billion in unspent balances from prior years, $3 billion from the
2001 appropriation and $574 million in HOPE VI funding and regulatory tools
to demolish severely distressed units that represent a disproportionate share
of the backlog.
Martinez explained that the new budget also addresses the challenges of today
and tomorrow by focusing more resources on fighting housing discrimination,
protecting vulnerable populations, making housing affordable and increasing
home ownership.
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The entire budget summary is available on HUD's web
site