President Bush’s proposed 2005 budget includes $31 billion for a U.S. Department of Housing and Urban Development spending plan that emphasizes affordable housing, community revitalization and home ownership, the agency said in a statement today.
Alphonso Jackson, HUD acting secretary, said the budget blueprint will provide “historically high levels” of funding for thousands of local housing programs.
“These are times for hard choices, yet this budget shows just how committed this Administration is to the people and places who need help,” Jackson said.
The spending plan includes $200 million for the American Dream Downpayment Initiative set up to help low-income families become first-time homeowners. It also includes millions of dollars for “sweat equity” home ownership program grants, and fair housing education, outreach and enforcement.
The Administration will propose again a tax credit of up to 50 percent of the cost of new construction or rehabilitation to “stimulate the production of affordable homes in distressed communities where such housing is scare,” according to HUD. This tax credit would target households earning less than 80 percent of an area’s median income.
The $2 billion in the budget for the HOME Investment Partnerships Program will be allocated to 630 state and local governments. HOME funds encourage construction of affordable housing by financing the cost of land acquisition, new construction, rehabilitation, down payment assistance and rental subsidies.
The spending plan includes a record $45 million to provide home purchase and home ownership counseling to 550,000 families and provide rental counseling to 250,000 families.
HUD also has proposed a sweeping reform of the nation’s rental assistance voucher program that would allow public housing authorities to set rents using local rental market data. The agency said this approach would “stop the spiraling cost” of the program and “provide performance-based incentives for public housing authorities to serve more families presently waiting for rental assistance.”
HUD is also encouraging local housing agencies to use rental assistance vouchers toward moving low-income families into home ownership. The housing agencies may either provide mortgage assistance in lieu of a rental subsidy or offer families a one-time down payment grant equaling up to one-year’s worth of their rental assistance.
The budget proposal also contains $3.6 billion to fund daily operations of local public housing authorities, plus $2.7 billion to help local public housing authorities fund major repairs and modernizations of housing units.
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