HUD announces $31.3 billion budget proposal

President Bush's proposed budget for fiscal year 2005 includes $31.3 billion for the Department of Housing and Urban Development.

The spending plan continues to emphasize HUD's commitment to promote affordable housing, strengthen communities and increase homeownership across America.

In releasing details of the funding request, Acting Secretary Alphonso Jackson said the budget blueprint will continue to provide historically high levels of support to thousands of local programs that house and serve the nation's homeless.

"Whether it's promoting homeownership and affordable housing or serving our most vulnerable citizens, the resources we are requesting signal a strong investment in neighborhoods throughout America," said Jackson in a HUD news release.

Census data continues to show that while nearly 70 percent of all American households own their own homes, less than half of African-American and Hispanic families are homeowners.

Intent on closing this "homeownership gap," Bush announced "America's Homeownership Challenge," committing the nation to adding 5.5 million minority homeowners by the end of the decade. The following are some of the initiatives proposed by Bush to increase homeownership and affordable housing opportunities for low-income Americans.

Zero-down-payment mortgage. HUD is seeking legislation to offer a new no-down-payment mortgage product to help an estimated 150,000 families a year to purchase their first homes.

HOME Investment Partnerships Program. HUD is proposing more than $2 billion for the HOME program to be allocated to 630 state and local governments. HOME funds encourage the production of affordable housing by financing the cost of land acquisition, new construction, rehabilitation, down-payment assistance and rental subsidies.

Flexible Voucher Program. HUD is proposing sweeping reform of the nation's rental assistance voucher program that will give local housing officials the flexibility they have long requested to better address their local needs and potentially serve more families. The new Flexible Voucher Program will allow public housing authorities to set rents using local rental market data.

Freedom to House: Public Housing Reform Demonstration Program. HUD will introduce a demonstration program in 2005 designed to improve public housing. The Freedom to House Initiative will allow 50 public housing authorities the freedom to establish rents for their residents based on their local rental market, rather than on national rental estimates. Participating public housing authorities will also have the ability to combine their capital and operating funds to utilize HUD's rental assistance more effectively, thereby significantly cutting their administrative costs and benefiting more families.

Single-family affordable housing tax credit. To stimulate the production of affordable homes in distressed communities where such housing is scare, the administration will again propose 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. Bush is renewing his request for $65 million to fund so-called "sweat equity" homeownership programs. These funds will help produce approximately 5,200 new affordable homes nationwide.

The Samaritan Initiative. For fiscal year 2005, HUD seeks $50 million in housing assistance for those experiencing chronic or long-term homelessness. As a part of the administration's concerted effort to end chronic homelessness, HUD's permanent housing funding would be combined with assistance from the Departments of Health and Human Services and Veterans Affairs for supportive services.

Consolidation of homeless assistance grants. To increase the flexibility of communities in combating homelessness, HUD will propose legislation to combine three existing homeless assistance programs into one consolidated program providing uniform requirements for all applicants seeking homeless assistance. HUD is also seeking to transfer the Emergency Food and Shelter Program from the Federal Emergency Management Agency to HUD.

Housing Opportunities for Persons with AIDS. For fiscal 2005, HUD seeks $295 million to provide housing and supportive services to low-income persons with HIV/AIDS and their families. HOPWA funding helps prevent homelessness and provides a comprehensive system of care for those living with HIV/AIDS. A stable home environment is a critical component for low-income persons managing complex drug therapies and potential side effects from their treatments.

Faith-based and community organizations. In fiscal year 2005, HUD proposes a $5 million pilot program designed to increase participation of faith-based and grassroots community organizations in five cities' community development strategies. Meanwhile, 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.

National Community Development Initiative. HUD participates in the privately organized and initiated NCDI. The fiscal year 2005 budget will provide $25 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 and the Enterprise Foundation.