President Donald Trump released his budget plan last week with a proposal to cut the Department of Housing and Urban Development’s (HUD) funding by about $8.8 billion, or 18% of its 2017 levels.
The proposal would reduce Section 8 federal housing subsidies, eliminate the $1.9 billion fund for public housing capital repairs, and end funding to the federal community development block grant. The block grants provide funding for communities so that they can repair infrastructure and build affordable housing. The administration says the program has fallen short of fulfilling its purpose.
Ben Carson, HUD’s secretary, posted in a statement last Monday: “The proposed budget is focused on moving more people toward self-sufficiency through reforming rental assistance programs and moving aging public housing to more sustainable platforms. … I am confident HUD will deliver on its core programs, assist our most vulnerable populations, and make significant enhancements to our programs where needed.”
Concern for HUD
Some housing advocates expressed concern about HUD’s proposed budget cut. The National Low Income Housing Coalition said the budget cuts “would leave even more low income people without a stable home, undermining their ability to live with dignity and climb the economic ladder to achieve financial security.”
The budget plan also included a proposal to take revenue from Fannie Mae and Freddie Mac to lower the deficit. The proposal calls for Congress to raise the fees that the mortgage guarantors charge to back payments on mortgage-backed securities by 0.1 percentage point and then use that extra money to reduce the federal budget deficit by $25.7 billion over the next decade.
Trump’s budget plan still needs to be approved by Congress.
“The National Association of REALTORS® is focused on ensuring that the White House and Congress understand the importance of housing and property ownership to our families, local communities, and the overall health of the nation’s economy,” says NAR President Elizabeth Mendenhall. “We look forward to working closely with administration leaders and lawmakers in the days and months ahead, and will be a leading voice for our 1.3 million members on any budget proposals that might affect important real estate–related programs.”