NCSHA Letter to FY 2012 Minibus Conferees

November 10,2011

Dear Chairmen and Ranking Members:

As you conference the “minibus,” H.R. 2112, which includes both the FY 2012 HUD and FY 2012 Rural Development appropriations bills, we urge you to restore HOME formula grant funding to at least its FY 2011 funding level of $1.6 billion; 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, 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.

HOME Investment Partnerships Program
The HOME program was cut by 12 percent in FY 2011, to $1.6 billion, after being flat-funded in FY 2010. We appeal to you to spare the HOME program from the devastating cuts proposed by both the House and the Senate and to fund the HOME program at an amount as close to its FY 2011 funding level of $1.6 billion as possible and that, at a minimum, you fund the program at no less than the House-proposed level of $1.2 billion. The need for HOME funding vastly exceeds the amount available. HOME’s FY 2011 appropriation is 20 percent less than its FY 2004 amount and its formula grant is 14 percent less than in FY 2004.

HOME has an outstanding track record of success. Since Congress created it in 1990, HOME has financed more than 1.2 million affordable homes, helping over 600,000 renters and an additional 600,000 homeowners. HOME funding is necessary to help states and localities respond to urgent housing needs.

Rental Assistance
We urge the conference committee to ensure that all vouchers already in use are renewed and all Section 8 project-based contracts are renewed for a full 12 months to maintain owner confidence in the program. These two programs serve some of our lowest income, most vulnerable people.

We also ask that you provide funding necessary for public housing agencies (PHAs) to effectively administer the voucher program, including state HFAs that administer the program in many states. PHAs have experienced multiple year prorations at less than 100 percent of full administrative fee funding. The deep fee cut proposed by the House—a 24 percent decrease compared to FY 2011—will severely impact PHAs’ ability to administer the voucher program. HFA voucher administrators and project-based contract administrators play critical roles in providing rental assistance. We ask that you ensure that they are adequately compensated for them.

Thank you for funding new incremental vouchers in FY 2011. However, additional new unrestricted incremental vouchers are needed to address the plight of the millions of families who qualify for voucher assistance but do not receive it. HUD’s Worst Case Housing Needs Report reported a 20 percent increase in households with worst case housing needs—defined as very low-income renters not receiving government housing assistance who either pay more than half of their monthly income for rent, live in severely inadequate conditions, or both.

States consistently target their Housing Credit, Bond, and HOME resources to households with incomes below the programs’ statutory income limits. Yet, it is difficult—and sometimes impossible—to reach these households at a rent level they can afford without rental subsidies.

Housing Counseling
Thank you for your continued support of the National Foreclosure Mitigation Counseling (NFMC) program. This program is important to addressing the continuing foreclosure crisis. However, non-foreclosure related housing counseling needs are addressed through HUD’s Housing Counseling Assistance Program. In FY 2011, funding for this program was eliminated; it was funded at $87.5 million in FY 2010. We urge you to restore funding for HUD’s Housing Counseling Assistance Program in FY 2012 by, at a minimum, agreeing to fund the program in its own account at the Senate-proposed level of $60 million.

Many HFAs access HUD’s housing counseling program to support housing counseling partners throughout their state. The counseling assistance provided as a direct result of federal housing counseling program funds is critical to many HFA first-time homebuyer programs and to the Home Equity Conversion Mortgage (HECM), or reverse mortgage, program. HUD’s housing counseling program is also the only source of federal funding for renter, homelessness prevention, and post-purchase non-foreclosure counseling.

Rural Housing Programs
USDA’s rural housing programs are vital to addressing the serious unmet housing needs in rural areas. We urge you to maintain funding for the Section 502 direct and guaranteed loan programs at their FY 2011 levels, support the Senate-passed $130 million funding level for the Section 538 multifamily loan guarantee program, support at least the Senate-passed funding level and attempt to achieve the FY 2011 funding level for the Multifamily Preservation and Revitalization (MPR) program, and provide funding adequate to at least maintain the current number of families assisted by the rental assistance programs administered by the USDA.

We recognize it will be difficult for you to accommodate competing needs within the HUD and Rural Development spending bills. We urge you to consider the proven effectiveness of HOME, Section 8, housing counseling, and rural housing assistance and the growing need for these programs in these difficult economic times as you make your funding decisions.

Sincerely,

Barbara Thompson
Executive Director