November 15, 2011
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The conference committee determining FY 2012 HUD and USDA housing program funding levels released its final bill text and an accompanying conference report on November 15, after reconciling the Senate-passed and House-proposed versions.  The House and Senate are scheduled to consider the conference report by the end of the week, and the bill’s passage is likely.

 
The conference report includes $37.4 billion for HUD, $3.7 billion, or 9 percent, less than HUD’s FY 2011 funding level.  The bill includes a 38 percent cut to the HOME Investment Partnerships (HOME) program, a 12 percent cut to the Community Development Block Grant (CDBG) program, and a 7 percent cut to Housing Choice Voucher administrative fees, all compared with FY 2011. 
 
It provides practically level funding for Housing Choice Voucher (voucher) renewals, project-based Section 8 renewals, and homeless assistance grants and includes funding for HUD’s Housing Counseling program, which received no funding in FY 2011.  NCSHA’s budget chart shows how the final conference report compares to FY 2011 appropriations, the President’s FY 2012 Budget proposal, and the FY 2011 Senate and House-proposed funding levels.
 
The conference report includes the following funding levels for HUD programs:
 
  • $1 billion for the HOME program, $607 million less than in FY 2011;
  • $18.9 billion for the Section 8 voucher program, $543 million more than in FY 2011; FY 2012 funding includes $17.2 billion for voucher renewals, $572 million more than in FY 2011, and $1.35 billion for administrative fees, $97 million less than in FY 2011;
  • $9.34 billion for the Project-Based Section 8 program, $77 million more than in FY 2011; FY 2012 funding includes $9.05 billion for contract renewals, $119 million more than in FY 2011, and $289 million for contract administration, $36 million less than in FY 2011; 
  • $2.95 billion for the CDBG program, $388 million less than in FY 2011;
  • $1.901 billion for homeless assistance grants, the same as FY 2011; FY 2012 funding includes at least $250 million for the Emergency Solutions Grants (ESG) program and $1.59 billion for Continuum of Care and rural housing stability assistance programs;
  • $45 million for HUD’s Housing Counseling program, which was not funded in FY 2011;
  • $375 million for the Section 202 Housing for the Elderly program, $24 million less than in FY 2011; and
  • $165 million for the Section 811 Housing for Persons with Disabilities program, $15 million more than in FY 2011. The bill instructs the HUD Secretary to make funds available to state housing finance agencies (HFAs) and other appropriate entities for project rental assistance and also includes $112 million for Mainstream Section 811 voucher renewals within the voucher account.
 
The conference report includes the additional oversight provisions for the HOME program included in the Senate-passed bill.  As described in NCSHA’s September 22 blog, the provisions include:
  • Repayment of funding provided in the bill for developments that are not completed within four years of their commitment dates, as determined by a signature of each party to the agreements.  HUD can extend the deadline for one year if the delay is beyond the control of the participating jurisdiction (PJ);
  • None of the funds can be committed to developments unless the PJ certifies that it has conducted an underwriting review, assessed developer capacity and fiscal soundness, and examined neighborhood market conditions to ensure adequate need for each development;
  • Any homeownership unit funded with HOME money from this bill that cannot be sold within six months of completion must be rented to an eligible tenant; and
  • No funds may be awarded for development activities to a community housing development organization (CHDO) that cannot demonstrate that it has staff with demonstrated development experience.
 
The conference report increases the Federal Housing Administration (FHA) loan limit to the lower of $729,750 or 125 percent of the highest median home price in each metropolitan statistical area (MSA), effective the date of enactment of the bill through December 31, 2013.  The loan limits for FHA and Fannie Mae and Freddie Mac all fell to the lower of $625,500 or 115 percent of the highest median home price in each MSA on October 1, 2011.  The provision does not affect the loan limits for Fannie Mae or Freddie Mac.
 
The conference report includes the following funding levels for USDA rural housing programs:
  • $900 million for the Section 502 single-family subsidized direct loan program, $219 million less than in FY 2011;
  • $24 billion for the Section 502 unsubsidized guaranteed loan program, the same as in FY 2011;
  • $64.5 million for the Section 515 rural rental housing program, $5 million less than in FY 2011;
  • $130 million for the Section 538 multifamily loan guarantee program, $99 million more than in FY 2011;
  • $11 million for the Section 542 rural housing voucher program, $3 million less than in FY 2011; and
  • $2 million for USDA’s Multifamily Preservation and Revitalization (MPR) program, a rural housing preservation demonstration program, $13 million less than in FY 2011.
 
According to the accompanying report, the conferees “recognize that many private lenders have been unable to implement the new annual fee for Section 502 guaranteed loans as required by USDA…and that many small rural banks and state housing agencies are precluded from program participation due to their lack of automated systems enhancements.”  As a short-term solution, the bill provides the authority to USDA to increase the guarantee fee to cover subsidy costs.  The conferees direct USDA to complete all necessary systems enhancements as soon as possible.
 
The conference report also includes an extension of the current continuing resolution (CR) through December 16 to continue funding all federally funded agencies not covered by the three appropriations bills included in the “minibus,” as the bill is known.  The current CR is set to expire on November 18 and the House and Senate are both expected to pass the minibus and to send it to the President for his signature before the CR expires.
 
During conference negotiations, NCSHA sent a letter to the conferees encouraging them to restore funding for the HOME Investment Partnerships (HOME) program; provide enough Section 8 funding to renew all expiring project-based contracts for a full year, fully fund all authorized Housing Choice Vouchers (vouchers), provide new incremental vouchers in FY 2012, and ensure that successful HFA voucher and project-based contract administrators continue in and are adequately compensated for these roles; restore funding for HUD housing counseling; and provide adequate funding for USDA’s single-family and multifamily housing programs.  
 
NCSHA also participated in meetings with appropriations committee members’ staff and through HFA efforts with their delegations to advance NCSHA’s priorities.
 
NCSHA also led a sign-on letter, signed by 17 additional national organizations, to the conferees urging them to fund HOME as close to its FY 2011 funding level of $1.6 billion as possible and at no less than the House-proposed $1.2 billion amount.  NCSHA signed, along with 43 additional organizations, a letter sent by the Campaign for Housing and Community Development Funding (CHCDF) to the conferees.  The letter expressed concern that cuts proposed in the HUD and USDA bills will cause individuals and families currently receiving assistance to lose it.