Budget proposes more than $1 billion in cuts to HUD funding

by JON PRIOR

The president's budget provides $48 billion to the Department of Housing and Urban Development for fiscal 2012, up $900 million from the year before. After receipts, however, funding for the department will be $42 billion, down $1.1 billion from the net levels in fiscal 2011.

Funding for several programs will be reduced. The budget cuts $300 million from the now $3.7 billion Community Development Block Grant program, which provides annual awards to local government and states to address community development needs.

The budget for housing counseling through HUD and NeighborWorks was cut by more than half to $168 million for the fiscal year, down from $338 million in 2010.

The White House expects that the Federal Housing Administration will insure $218 billion in mortgages through the fiscal year 2012, maintaining its 38% share of all homebuyers. In 2004, that was at a record low of 4%.

While the Obama administration made cuts to some areas of HUD, it increased the amount of funding by $577 million for homelessness programs.

"In this constrained fiscal environment, increases were made only for the neediest Americans," Obama said in the budget.

Still, Obama's reduction in funding to HUD isn't the most severe proposal. At the end of January, Sen. Rand Paul (R-Ky.) introduced a bill to cut all funding to HUD as part of a $500 billion purge of government spending in his proposal.

URL to original article: http://www.housingwire.com/2011/02/14/budget-proposes-more-than-1-billion-in-cuts-to-hud-funding

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