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HUD Announces FY 2004 Proposed Budget Of $31.3 Billion

February 3, 2003

Represents A 1.3 Percent Increase in FY 2004 Budget

WASHINGTON - President Bush's proposed fiscal year 2004 budget includes $31.3 billion for the Department of Housing and Urban Development to increase homeownership, promote affordable housing and create stronger communities. In releasing details of the President's spending blueprint, HUD Secretary Mel Martinez said the budget request builds upon the Administration's commitment to address the minority homeownership gap, the availability and affordability of housing, and the needs of the homeless.

"This budget reflects the realities of national defense and homeland security while continuing to offer greater opportunities for families seeking the American Dream," said Martinez. "This funding allows HUD to continue building stronger communities and increasing homeownership while also reaching out a compassionate hand to America's most vulnerable."

Increasing Homeownership and Affordable Housing Opportunities

While nearly 70 percent of all Americans own their own homes, less than half of African-American and Hispanic families are homeowners. Intent on closing this "homeownership gap," President Bush is committed to adding 5.5 million minority homeowners by the end of the decade. The President is proposing the following initiatives to increase homeownership and affordable housing opportunities for low-income Americans:

  • HOME Investment Partnerships Program (HOME). HUD's proposed budget provides a five percent or $113 million increase in the department's HOME program. An estimated $2.2 billion will be provided to state and local governments to encourage the production of affordable housing in hundreds of communities nationwide.
  • American Dream Downpayment Initiative. For the second consecutive year, the President's proposal includes $200 million for the American Dream Downpayment Initiative to help an estimated 40,000 low-income families a year to become first-time homeowners.
  • Housing Counseling. The President's spending plan also includes an additional $10 million to provide counseling services to lower-income Americans who wish to become homeowners or who seek affordable rental housing. The additional funding would bring HUD's Housing Counseling Grant Program to $45 million, more than double the amount appropriated in FY 2002 and will help 250,000 additional individuals and families to find and maintain homes.
  • Single-Family Affordable Housing Tax Credit. To stimulate the production of affordable homes in distressed communities where such housing is scare, the Administration is proposing a tax credit of up to 50 percent of the cost of new construction or rehabilitation. This tax credit targets low-income households earning less than 80 percent of an area's median income.
  • Self-Help Homeownership Opportunity Program (SHOP). President Bush is proposing $65 million to fund so-called "sweat equity" homeownership programs. Triple the funding level of 2002, this proposal would provide grants to support nonprofit organizations like Habitat for Humanity, which requires low-income families to help construct the homes they will eventually own.
  • Housing Choice Voucher Homeownership. HUD allows local housing agencies the flexibility to use rental assistance vouchers toward moving low-income families into homeownership. The housing agencies may either provide mortgage assistance in lieu of a rental subsidy or offer families a one-time downpayment grant equaling up to one-year's worth of their rental assistance.
  • Housing Assistance for Needy Families (HANF). The FY 2004 budget proposes a new initiative under which rental assistance vouchers previously allocated to thousands of public housing authorities would be allocated to states. States, in turn, would contract with local housing agencies to administer the program. Allocation of rental assistance vouchers to states would allow more flexibility and reduce or eliminate problems associated with the underutilization, and ultimately the recapture, of billions of dollars in rental assistance to local housing agencies. Moreover, the HANF Program should run more effectively with HUD managing fewer than 60 grantees compared to approximately 2,600 today.
  • Public Housing Operating and Capital Funds. The Administration's budget provides for an increase of $44 million to assist local public housing authorities in their daily operation. The Administration also seeks an additional $215 million in the Public Housing Capital Fund to help local PHAs fund major repairs and modernization in their housing units.
Serving the Needs of the Homeless and Persons Living with HIV/AIDs
  • The Samaritan Initiative. This new initiative is an important element in the Administration's strategy toward ending chronic homelessness. This innovative interagency program includes competitively awarded grants that would be jointly administered by HUD and the Departments of Health and Human Services (HHS) and Veterans Affairs (VA). For FY 2004, HUD would provide $50 million in housing assistance to those experiencing chronic or long-term homelessness while HHS and VA would each contribute $10 million for services such as substance abuse treatment and primary health care.
  • Consolidation of Homeless Assistance Grants. To increase the flexibility of communities in combating homelessness, HUD proposes to consolidate three homeless assistance programs providing more consistent funding and eliminating the burden of administering the current competitive programs. Taken together, HUD's homeless assistance programs would be a record $1.5 billion.
  • Housing Opportunities for Persons with AIDS (HOPWA). For FY 2004, HUD seeks $297 million to provide housing and supportive services to low-income persons with HIV/AIDS and their families. This represents a $5 million increase over last year's request and is based on the most recent data prepared by the Centers for Disease Control and Prevention. As a result, HUD anticipates the HOPWA program will renew all existing grants in FY 2004 and provide new grant funding for three new jurisdictions.
Strengthening Communities
  • Community Development Block Grant (CDBG) Program. HUD's CDBG Program provides flexible funding to more than 1,000 state and local governments to stimulate community development and job growth. For FY 2004, HUD is seeking $4.436 billion in formula grants to be allocated to states, cities and larger urban counties as well as $72.5 million to be distributed to Indian tribes by competition.
  • Faith-Based and Community Organizations. In FY 2004, HUD will continue to work towards identifying ways to strengthen the capacity of these nonprofit groups and to reduce any unnecessary regulatory barriers, allowing them to compete on an equal footing for HUD funding.
  • Colonias Gateway Initiative. Like the President's FY 2003 budget proposal, HUD seeks $16 million for a new Colonias Gateway Initiative (CGI). The CGI is a regional initiative focusing on the 1,500-mile stretch of the U.S.-Mexican border where more than 12 million individuals live, often in severely substandard conditions.
  • National Community Development Initiative (NCDI). HUD participates in the privately organized and initiated NCDI. The FY 2004 budget will provide $30 million for the NCDI and Habitat for Humanity, in which HUD has funded three phases of work since 1994. A fourth phase will emphasize helping community-based development organizations build capacity in the economic arena and related community revitalization activities through the work of intermediaries, the Local Initiative Support Corporation (LISC) and the Enterprise Foundation.
  • Youthbuild. The FY 2004 budget requests $65 million to continue the important work of HUD's Youthbuild Program which targets at-risk young people (ages 16-24), providing them with education and employment skills necessary to start them in careers in the building trades. The housing constructed and rehabilitated by these young people will result in more affordable rental and homeownership opportunities for low-income and homeless people.

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Source: HUD



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