President Biden released an overview of his budget for Fiscal Year (FY) 24, including $73.3 billion in funding for HUD. This represents a $1.1 billion increase (1.6 percent) from the 2023 enacted level. While the budget overview does not provide funding information for all public housing and Section 8 accounts, a more detailed budget is expected next week. PHADA will provide additional detail as it becomes available.
HUD Secretary Marcia L. Fudge released a statement on the President’s budget:
The Budget invests in Americans at every station in life – from those seeking to purchase a home to those who receive HUD rental assistance – and will ensure families across the country can live in communities that are safe, affordable, and resilient.
Public Housing
No information is provided for the Operating Fund. The Capital Fund is level funded at $3.2 billion, but there is also $7.5 billion in mandatory funding for “comprehensive modernization of targeted Public Housing communities.” In addition, $300 million is provided to improve energy efficiency and climate resilience in public housing units. While this significant additional public housing funding is appreciated, it is unlikely that Congress would approve mandatory spending in this account or others noted below given the current political and fiscal climate. Mandatory spending is not subject to the congressional appropriations process but adds to overall budget costs.
Related to environmental hazards, the budget provides:
- $410 million for states, local governments, and nonprofits to reduce lead-based paint and other health hazards in the homes of low-income families with young children.
- $25 million to address lead-based paint in public housing.
- $60 million to prevent and mitigate housing-related health hazards, such as fire safety and mold, in HUD-assisted housing.
Section 8
An increase of $2.4 billion (including emergency funding) over the FY 23 enacted level is provided for Tenant Based Rental Assistance to ensure funding for all currently leased households and to provide new vouchers to an additional 50,000 households, including those who are homeless or fleeing (or attempting to flee) domestic violence or other forms of gender-based violence. The budget proposes to fund an additional 130,000 households with funding from HCV program reserves, though no amount of funding is specified.
The HUD budget includes mandatory funding for youth aging out of foster care and extremely low-income veterans, with $9 billion in voucher funding for an estimated 20,000 youth households and $13 billion for an estimated 450,000 veteran households. As noted above, it is unlikely that Congress will adopt the mandatory funding proposed by the President.
Project Based Rental Assistance (PBRA)
The budget includes $7.5 billion in funding for new PBRA contracts for extremely low-income households or those at 30 percent of the area median income.
Community Development Programs
HOME Investment Partnerships Program (HOME): $1.5 billion, an increase of $300 million, or 20 percent, over the 2023 enacted level, is proposed for construction and rehabilitation of affordable rental housing units and to provide homeownership opportunities.
Community Development Block Grant: $3.4 billion, an increase of $100 million, or 3 percent, from the FY 23 enacted level for community investments in infrastructure, economic development, public amenities, and social services. Of this, $85 million is allocated “for a competitive program to reward State, local, and regional jurisdictions that make progress in removing barriers to affordable housing developments, such as restrictive zoning….” There is also $10 billion in mandatory funding “to incentivize…jurisdictions to make similar zoning and land use reforms.”
Section 202 and Section 811
The budget provides $258 million for an estimated 2,200 new units for the elderly and persons with disabilities.
Tax Credits
Neighborhood Homes Tax Credit. The budget proposes $16 billion over ten years to build or renovate affordable homes for homeownership. The funding is provided to “cover the gap between the cost of construction and the sale price for rehabilitated or newly constructed single-family homes in low-income communities….” Eligible homes are those occupied by low- or middle-income homeowners.
Low-Income Housing Tax Credit (LIHTC). The President’s budget proposes an expansion of LIHTC with a $28 billion investment for low-income rental housing through a permanent increase in the allocation of tax credits that states receive. There is also a provision to reduce the private activity bond financing requirement from 50 percent to 25 to leverage more private capital into LIHTC deals. These are the two highest priorities of the ACTION Campaign, of which PHADA is a member, and will be included in the soon-to-be-introduced Affordable Housing and Credit Improvement Act, which has been introduced in the House and Senate in the last two sessions of Congress. There is also language in the budget that repeals the qualified contract provision and right of first refusal provision, which created a loophole for LIHTC property owners to exit affordability agreements early. This is also a priority of the ACTION Campaign.
Homeownership Efforts
The budget proposes that the Federal Housing Administration (FHA) reduce annual mortgage insurance premiums for 850,000 new borrowers by approximately one-third in 2023, saving the average borrower $800 in the first year of the mortgage with continued savings for the duration of the loan.
There is also:
- $100 million for a HUD homeownership program that would provide down payment assistance to expand homeownership opportunities for first-generation and/or low-wealth first-time homebuyers and
- $15 million to increase the availability of FHA small balance mortgages.
- $10 billion in mandatory funding for a new First-Generation Down Payment Assistance program to help address racial and ethnic homeownership and wealth gaps.
Efforts to End Homelessness and Assist Renters
Homelessness. The Budget provides $3.7 billion, an increase of $116 million over the 2023 enacted level, for homeless assistance grants to an estimated 25,000 additional households, including survivors of domestic violence and homeless youth. There is also $505 million for Housing Opportunities for Persons with AIDS.
Eviction Prevention. To assist with eviction prevention, the budget provides:
- $3 billion in mandatory funding for competitive grants to promote state and local efforts to reform eviction policies through access to legal counsel, emergency rental assistance, and other rent relief.
- $10 million for the Eviction Protection Grant program, to provide legal assistance to low-income tenants at risk or subject to eviction.
Addressing Housing Discrimination
The budget provides $90 million to support state and local fair housing enforcement organizations, to provide education on federal fair housing laws, and to support HUD staff related to affirmatively furthering fair housing.
Investments in Tribal Communities
The budget provides over $1 billion to fund tribal efforts to expand affordable housing, improve housing conditions and infrastructure, and increase economic opportunities, with $150 million of his amount designated for resilience and energy efficiency in housing-related projects.
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