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Senate Appropriations Committee Releases Details of FY 2015 HUD Funding Bill

Published on June 9, 2014 by
Senate Appropriations Committee Releases Details of FY 2015 HUD Funding Bill

The Senate Appropriations Committee earlier today released the bill text and accompanying report for the FY 2015 Transportation, Housing and Urban Development, and Related Agencies (T-HUD) appropriations bill, S. 2438, it approved on June 5.

The bill proposes $950 million for the HOME program, a $50 million, or 5 percent, cut from the FY 2014 funding level of $1 billion.  The level is $250 million more than the House Appropriations Committee-passed FY 2015 bill and equal to the President’s FY 2015 request.  Unlike the House bill and the President’s request, the Senate bill does not propose to move funding for the Self-Help and Assisted Homeownership Opportunity Program (SHOP) into the HOME account.  According to the report accompanying the Senate bill, it also would allow statewide nonprofits to be designated as Community Housing Development Organizations (CHDOs).  The bill would also create an exception to the 30-day eviction notice in instances where a tenant poses a threat.

The bill would provide $9.7 billion for project-based Section 8, $171 million, or 2 percent, less than the FY 2014 level and equal to the House bill and the President’s request.  Of the $9.7 billion, $210 million would be for contract administration, $55 million, or 21 percent, less than the FY 2014 level and equal to the House bill and the President’s request.  The report states that the Committee “reluctantly concurs with the Administration’s proposal to shift the payment of contracts to a calendar-year basis.”  It states that due to FY 2015 budget constraints, the Committee accepts the proposal as the best option for preserving HUD’s housing assistance programs.

The report also states, “Performance-Based Contract Administrators (PBCAs) are typically public housing authorities (PHAs) or State housing finance agencies (HFAs). They are responsible for conducting on-site management reviews of assisted properties; adjusting contract rents; and reviewing, processing, and paying monthly vouchers submitted by owners. The Committee notes that PBCAs are integral to the Department’s efforts to be more effective and efficient in the oversight and monitoring of this program. The Committee is also aware of ongoing litigation that will affect the future of these entities and will continue to monitor developments. The Committee believes that fair and open competition is the best way to ensure that the taxpayer receives the greatest benefit for the costs incurred. The Department is directed to ensure that the PBCA selection process be, to the greatest extent legally permissible, full, open, and fair.”

The bill would provide $19.6 billion for the Housing Choice Voucher (voucher) program, $385 million, or 2 percent, more than the FY 2014 level, $205 million more than the House bill, and $483 million less than the President’s request.  Of that amount, $17.7 billion would be provided for voucher renewals, $353 million, or 2 percent, more than in FY 2014, $26 million more than the House bill, and $288 million less than the President’s request.  The funding level also includes $1.6 billion for administrative fees, $55 million, or 4 percent, more than the FY 2014 level, $205 million more than the House bill, and $150 million less than the President’s request.  Also included in the funding level, is $75 million for 10,000 new HUD-VASH vouchers.  The Committee is requiring HUD to set aside a portion of the HUD-VASH funding for a pilot “designed to provide housing and supportive services to veterans who are homeless or at-risk of homelessness living on tribal reservations or in Indian areas.”  The pilot would be administered through the Indian Housing Block Grant program.

The Committee voiced its hope that a full Section 8 reform bill will be enacted, saying such a bill is expected to modernize aspects of the program, expand the Moving to Work (MTW) program, and increase reporting by MTW agencies.  In the absence of a reform bill, the Committee says it expects HUD to update regulations that do not require congressional action.

The bill would provide $2.1 billion for homeless assistance grants programs, $40 million, or 2 percent, more than the FY 2014 level and the House bill, and $261 million less than the President’s request.  Of that amount, $1.8 billion would be for the Continuum of Care (CoC) and Rural Housing Stability Assistance programs and no less than $250 million would be for the Emergency Solutions Grants (ESG) program.

The bill would fund the Community Development Block Grant (CDBG) program at $3 billion, $10 million less than its FY 2014 level, $20 million more than the House bill, and $220 million more than the President’s request.  The Committee added a new requirement that any funding provided to a for-profit entity for an economic development project funded under the bill undergo appropriate underwriting.

The bill would also provide $420 million for the Section 202 Housing for the Elderly program, $36.5 million, or 9 percent, more than the FY 2014 level, equal to the House bill, and $20 million less than the President’s request.  It would provide $135 million for the Section 811 Housing for Persons with Disabilities program, $9 million, or 7 percent, more than the FY 2014 level, equal to the House bill, and $25 million less than the President’s request.  The report states that this funding level for Section 811 would support all project rental assistance contract (PRAC) renewals and that should HUD identify any residual receipts or recapture other unobligated balances in the account, the HUD Secretary must direct those funds to supplement the recent demonstration competition for project rental assistance (PRA) to state HFAs.

The bill would fund at $49 million the HUD Housing Counseling program, $4 million, or 9 percent, more than in FY 2014, $2 million more than the House bill, and $11 million less than the President’s request.  The Senate report says the Committee supports the Homeowners Armed With Knowledge (HAWK) program initiative, but does not include a separate appropriation for it and directs HUD to use existing resources to implement HAWK.  The House bill includes a provision barring any funding from the bill or collected by the Federal Housing Administration (FHA) from being used to implement HAWK.

The bill would cut funding for the National Foreclosure Mitigation Counseling (NFMC) program to $50 million, $18 million, or 26 percent, less than the FY 2014 level and equal to the House bill and the President’s request.  The Senate and House reports both note that the NFMC program is not permanent and highlight improvement in the housing market.  The Senate report states that FY 2015 awards should be targeted to areas that continue to face high levels of foreclosure.

The bill would also provide $4.5 billion for the Public Housing Operating Fund, $75 million, or 2 percent, more than the FY 2014 and House bill’s levels and $125 million less than the President’s request.  It would provide $1.9 billion for the Public Housing Capital Fund, $25 million, or 1 percent, more than in FY 2014, $125 million more than the House bill, and $25 million less than the President’s request.  According to the report, the bill would allow PHAs to transfer up to 20 percent of their operating funds to their capital fund and to transfer up to 30 percent of their capital funds to their operating funds. 

The bill includes $10 million for the Rental Assistance Demonstration (RAD), which according to the report will allow HUD to convert 3,000 units of public housing in high-poverty neighborhoods that would otherwise be unable to address their capital needs.  The bill would also lift the current 60,000-unit cap to 185,000 units and would allow developments in the Single Room Occupancy (SRO), Rent Supplemental, and Rental Assistance Payment (RAP) programs to convert to Section 8.

Separate from the voucher account, the Committee would fund the Family Self-Sufficiency (FSS) program at $75 million, equal to the FY 2014, House bill, and President’s request levels.  In the report, the Committee states its support for expanding the FSS program to residents of project-based Section 8-assisted properties.  However, the Committee also says it recognizes the difficulty of expanding the program without also increasing funding.  Therefore, the bill would allow project-based Section 8 residents to participate in the program, but would not allow the property owners to compete for service coordinator funding.  The House bill does not include a similar provision.

The bill includes a provision instructing the HUD Secretary to establish a demonstration program, running through September 30, 2017, “to test a performance-based model program that facilitates financing of energy and water conservation improvements in assisted multifamily housing to reduce utility costs.” The demonstration is capped at 20,000 units.

The Senate is expected to begin considering FY 2015 appropriations bills the week of June 16.  It has not announced which bills it will consider first.  The House begins consideration of its T-HUD bill, H.R. 4745, today.  See NCSHA’s funding chart for additional information on HUD and USDA housing program funding levels.

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