Looking at HUD’s Proposed Budget for 2013
February 13, 2012
President Obama sent his proposed 2013 federal budget to Congress this morning, a budget that touts its ability to “make tough choices” by highlighting fiscal sacrifices. Despite the emphasis on tightened purse-strings, the budget provides the Department of Housing and Urban Development $44.8 billion, an increase of $1.4 billion, or 3.2 percent, when compared to 2012’s enacted level.
By the time a 2013 budget is passed by Congress, it will look very different from the 256-page document available today. However, looking at the HUD budget allows us a peek at the administration’s housing wish list, as well as its projections for programs like the Federal Housing Administration’s Mutual Mortgage Insurance Fund, a program whose importance is perhaps only equaled by its threat of insolvency.
The Administration believes that in 2013, the FHA will insure $149 billion in mortgage loans. As such, HUD is requesting $400 billion in loan guarantee authority for the FHA’s Mutual Mortgage Insurance Fund. This money, according to HUD, will provide mortgages for approximately 1.2 million single-families.
By way of comparison, HUD projected that the FHA would insure $218 billion in mortgage loans in 2012. In 2011, the actual number was $190 billion, according to new data from Inside FHA Lending.
What may be more revealing than numerical changes in the budget is the seeming lack of program changes in regards to FHA, despite concerns of the MMI fund nearing the zero marker. HUD has tried to quell these concerns throughout the day, noting that the recent multistate servicing settlement will add $1 billion to FHA coffers and that money, in addition to expected premium increases, will keep the MMI fund solvent.
Increases in the HUD 2013 budget include tenant-based rental assistance, with an additional $160 million, homeless assistance grants with an increase of $330 million and an $85 million increase for supportive housing for the elderly and disabled. Major program areas for which HUD recommended a decrease in funding include project-based rental assistance (-$640 million), the public housing operating fund (-$438 million) and the community development fund (-$165 million).
Expect more on the proposed budget in this week’s newsletter.
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