House Draft HUD Funding Bill Released – Cuts NHTF to fund HOME

News: The House Transportation-Housing and Urban Development (T-HUD) Subcommittee released its markup of the draft Fiscal Year (FY) 2016 HUD funding bill this morning (4/29). The draft bill proposes to cut HUD’s FY2015 HOME allocation by $133 million ($900 million to $767 million), but also to transfer all $133 million in projected National Housing Trust Fund (NHTF) monies to the HOME account. While this will keep FY2016 HOME funding equal to FY2015’s allocation, it will completely de-fund the NHTF. The draft bill also prohibits the transfer, reprogramming, or credit of any replacement funds to the NHTF.

Context: HOME has seen a 44% cut since FY 2011—and, without the NHTF funding transfer, this draft bill would slash HOME to less than 52% of its FY 2011 level. However, the NHTF is established in law, with a dedicated funding source designed to keep it from being subjected to the congressional appropriations process. HOME and NHTF are distinct, vital programs with different purposes and different target populations.

For HOME, Participating Jurisdictions (PJs) choose how they wish to allocate HOME funds by housing type, which nation-wide results in the following distribution: for sale homes (34%), low-income affordable rental units (32%), rental units made affordable through rental assistance (18%), and rehabilitated/preserved for-sale homes (16%). 90% of units must serve those earning at or below 60% AMI. The NHTF on the other hand specifically targets extremely-low income households; at least 90% of NHTF funds must be used for rental housing (production, preservation, rehabilitation, or operation), at most 10% of NHTF monies can be used for home ownership, and altogether at least 75% of funds need to go to extremely low income households. For a full breakdown of the differnces between the two program, please see NCSHA’s factsheet HERE.

In summary, each program is unique, necessary and in light housing cuts and  in need of as much funding as is possible. Furthermore, the House highballs the NHTF allocation. HUD projects that it will only receive $120 million in FY2016 — meaning that the proposed fund transfer may not even get HOME up to $900 million.

Impact on Practitioners: Because it does not replace transferred NHTF monies, the draft bill results in a net loss in housing resources of $133 million. This cut will diminish practitioners’ ability to address rental housing needs of those earning >30% AMI (a demographic targeted much more directly by the NHTF than by HOME).

Action You Can Take: Call your Representative (especially those on the House Appropriations Committee) and tell them that diverting funds from  the NHTF to HOME to offset any cuts does not solve the underlying issue of rapidly diminishing affordable housing resources across the housing spectrum because NHTF and HOME are distinct programs that address different housing needs and both need higher levels of funding.

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