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Housing Budget Trimmed, Block Grants Cut Housing Budget Trimmed, Block Grants Cut

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Housing Budget Trimmed, Block Grants Cut

The White House is seeking to cut $300 million from community-development block grants for housing projects -- a significant departure from last year’s budget request, when it sought to fully fund the community block-grant program at $4.4 billion. The administration’s willingness to trim funding for the affordable-housing grants by 7.5 percent from current levels shows the budget realities it faces in the coming year.

“This is a tough choice that balances the need to decrease the budget deficit with the tough fiscal conditions confronting state and local governments,” the White House budget states.


Overall, the administration’s budget request for the Department of Housing and Urban Development is decreased by $1.1 billion from current levels. The White House envisions total spending of $48 billion for fiscal year 2012, but about $6 billion of that is offset by credit premiums and mortgage insurance to make the bottom line figure of $42 billion.

The White House is seeking a $577 million increase over current funding levels for programs to combat homelessness. The money would go toward a $2.5 billion program the administration unveiled last year; it provides grants for maintaining existing housing units, “rapid rehousing” and permanent supportive housing facilities. HUD is asking for $145 million to fund new housing vouchers for 19,000 homeless veterans and other homeless people receiving care from the Veterans Affairs or Health and Human Services departments. The administration also is seeking $50 million for service coordinators and incentive fees to motivate housing authorities to serve more homeless people.

The administration projects that the Federal Housing Administration will insure $218 billion in mortgage borrowing in 2012. In 2009, FHA financing was used by 38 percent of homebuyers, according to HUD.

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