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Posted at 4:24 PM ET, 02/14/2011

Budget 2012: Housing and Urban Development

By Dina ElBoghdady

President Obama's proposed budget includes $41.74 billion for the Department of Housing and Urban Development, about $1.1 billion less than what was enacted by Congress for fiscal 2010.

Programs designed to help the homeless and those in need of rental assistance got the biggest boost in this budget. The administration proposed roughly $2.3 billion for Homeless Assistance Grants, up from the $1.9 billion enacted in fiscal 2010. Another $9.4 billion was requested for project-based rental assistance, up from $8.6 billion in fiscal 2010.

"In this constrained fiscal environment, increases were made only for the neediest Americans," the proposal states.

Funding was slashed by $300 million for the community development block grant program, which was funded at $3.98 billion in 2010. The grants are designed to help rehabilitate housing and invest in the economic development of primarily low-income neighborhoods. The budget also proposes about $172 million less for new housing construction for seniors and people with disabilities. The administration is requesting $953 million for that program.

Housing and Urban Development Secretary Shaun Donovan said the cuts would not have been made if economic conditions were stronger.

The Federal Housing Administration, which is part of HUD, insures its lenders against losses when mortgages default. To beef up the cash cushion that FHA uses to pay for unexpected losses, the administration proposes raising the annual premiums that FHA borrowers pay from 0.9 percent to 1.15 percent starting April 18. The premium is used to compensate lenders for loans gone bad. The annual premiums and other fees that FHA collects from borrowers are expected to generate $5 billion in fiscal 2012, up from $2.6 billion in 2010 but less than the $9.8 billion projected for 2011.

In a call with reporters, Donovan said the increase in annual premiums should generate $2 billion of additional revenue next year. The higher premiums will also help reduce the volume of FHA-insured loans, which should drop to $218 billion from this year's projected $300 billion. That reduction is in line with the administration's push to scale back the government's involvement in housing finance.

View agency budget document (Annotated PDF)

Budget 2012 analysis: Full list of agencies

By Dina ElBoghdady  | February 14, 2011; 4:24 PM ET
Categories:  44 The Obama Presidency  
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Comments

Just another example of the great thinking in Washington!! Let's stimulate job creation but cut anything to do with single family development. Tha does a lot for the construction industry and the economy as a whole!!!!!!!!!!!

Posted by: BNSHOMES | February 21, 2011 11:18 AM | Report abuse

HUD should be eliminated completely.

Posted by: priveye | February 19, 2011 5:57 AM | Report abuse

Turns out all of the Democrats' grandiose schemes are working just as well as their prior experiments with housing: Fannie Mae, Freddie Mac, HUD and the rest of the unconstitutional, federally administered disasters.

The government now owns or guarantees: (a) 95% of all new residential mortgages issued; and (b) more than 50% of all existing residential mortgages.
----------------------
Totally reassuring. Thanks.

Posted by: drowningpuppies | February 14, 2011 7:53 PM | Report abuse

There are a lot of common misconceptions about public housing (you always read/hear about the very worst). 40% percent of public housing units are occupied by households headed by a person 65 years old or older, most of whom live alone. Over half of the elderly households live in projects specifically designed for the elderly. Public housing contains a much higher percentage of elderly households than the overall rental housing stock. Only 14% of all rental housing is occupied by the elderly.

Households with children comprise 43% of public housing. About half of those are single-parent households. 12% of households are headed by non-elderly disabled persons -- an important component of public housing. In summary. 52% of all public housing is occupied by elderly or handicapped households, 43% by households with children (including some with handicapped heads of household), and the balance by nonelderly households without children.

Posted by: seaduck2001 | February 14, 2011 5:31 PM | Report abuse

All housing projects and even most of Section 8 should go. We would all be way better off if we ended the originally well meaning experiment in subsidising low income people to live in multigenerational dysfunction, breeding gangs and crime and dependence. "Affordable housing units" in new buildings another scam, rewarding certain people with certain incomes with a housing lottery, while leaving everyone else paying market rates and subsidising these winners with our taxes.

An intelligent policy would be supporting people's incomes with free training and education and higher minimum wages instead, plus reducing the current insane level of the current gilded age income disparity .

Posted by: emjayay | February 14, 2011 4:15 PM | Report abuse

All housing projects and even most of Section 8 should go. We would all be way better off if we ended the originally well meaning experiment in subsidising low income people to live in multigenerational dysfunction, breeding gangs and crime and dependence. "Affordable housing units" in new buildings another scam, rewarding certain people with certain incomes with a housing lottery, while leaving everyone else paying market rates and subsidising these winners with our taxes.

An intelligent policy would be supporting people's incomes with free training and education and higher minimum wages instead, plus reducing the current insane level of the current gilded age income disparity .

Posted by: emjayay | February 14, 2011 3:51 PM | Report abuse

Eliminate $700 BILLION in tax cuts for the wealthiest 2%.

Posted by: seaduck2001 | February 14, 2011 3:49 PM | Report abuse

This is just one of the absurd non-core federal activities overly ripe for elimination.

Cut this sucker $11 BILLION per year and at the end of year four, take down the flag and close the doors. Have GSA sell any owned property and in the meantime set all leases to expire 30 September 2015.

Posted by: dana843 | February 14, 2011 3:02 PM | Report abuse

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