Administration Releases Fiscal Year 2013 Budget Proposal

The Administration yesterday sent Congress its FY 2013 Budget, proposing funding for all federal programs, including HUD and the Department of Agriculture’s (USDA) rural housing programs.  NCSHA has uploaded its analysis of the Budget’s housing proposals and a chart comparing the Budget’s HUD and USDA program funding levels with FYs 2011 and 2012.

The Budget contains the Administration’s tax proposals, including changes to the Housing Credit program to provide incentives for creating mixed-income housing and to allow a 30 percent basis boost for some 4 percent Credit, tax-exempt bond-financed preservation deals.  It also proposes repealing the Mortgage Revenue Bond (MRB) program purchase price limit and refinancing restriction. 

Among the HUD highlights, the Administration proposes $35.3 billion in HUD budget authority, a $2.9 billion, or 7.6 percent, decrease from the $38.3 billion HUD appropriation provided under the FY 2012 spending bill the President signed November 18, 2011.  After accounting for offsetting receipts, mostly from the FHA mortgage insurance program, the Budget proposes to spend $44.8 billion on HUD programs, a $1.5 billion, or 3.2 percent, increase over its FY 2012 funding level.

The Budget increases funding for Housing Choice Vouchers by 1 percent, homeless assistance by 17 percent, and Section 202 Housing for the Elderly by 27 percent.  It cuts funding for the project-based Section 8 program by 7 percent and funding for Section 811 Housing for Persons with Disabilities by 9 percent.  It provides level funding for HOME and the Community Development Block Grant (CDBG) programs.  The Budget also again proposes $1 billion in new funding to launch the Housing Trust Fund.

The Budget also says the Administration will increase by 10 basis points every Federal Housing Administration (FHA)-insured loan, subject to further notice in the next several weeks.  For loans greater than $625,500, HUD will impose an additional 25 basis points premium.  The Budget does not include provisions related to housing finance reform.

The Budget proposes to allow Ginnie Mae to securitize FHA-HFA Risk-Sharing program loans, mirroring NCSHA’s legislative proposal.

For USDA rural housing programs, the Budget proposes $653 million for the Section 502 single-family subsidized direct loan program, a $247 million decrease from its FY 2012 appropriation.  The Budget recommends funding the Section 502 unsubsidized guaranteed loan program at $24 billion, equal to its FY 2012 funding level.

The Budget proposes no new funding for the Section 515 rural rental housing loan program.  It was funded at $64.5 million in FY 2012.  According to the Budget, the Administration is not requesting any funding because it is focused on rehabilitation of the Section 515 multifamily housing portfolio in 2013.  The Budget proposes $34.4 million for the Multifamily Preservation and Revitalization (MPR) demonstration program.
           
The Budget proposes $150 million for the Section 538 multifamily loan guarantee program, a $20 million increase from its FY 2012 appropriation.  It proposes $12.6 million for the Section 542 rural housing voucher program, an increase of $1.6 million from the FY 2012 appropriated amount.  The program provides vouchers for families living in Section 515-assisted properties whose owners prepay their mortgages.