Friday, March 19, 2010

Guest Blogger Mindy La Branche: The President’s FY 2011 Budget and the Financing of Affordable Housing

As the national association for the state Housing Finance Agencies (HFAs), the National Council of State Housing Agencies (NCSHA) is pleased with several of the President’s budget proposals, disappointed with some, and curious about the potential impact of some of its new initiatives.

NCSHA is pleased that the budget again proposes $1 billion for the Housing Trust Fund to finance more homes for families with extremely low and very low incomes. We continue to encourage Congress to capitalize the Trust Fund as well as to provide its state administrators with additional resources to offset the operating costs of Trust Fund-financed developments.

NCSHA is also pleased that the budget proposes to extend the Housing Credit Exchange program for an additional year. However, NCSHA believes several additional actions are necessary to facilitate the Housing Bond and Credit programs, including expanding the Exchange program to include 4 percent and Disaster Credits, attracting more Credit investment, allowing HFAs to use temporary Housing Bond authority provided by the Housing and Economic Recovery Act (HERA) in 2008 for one more year, and extending the 10 percent Housing Credit cap increase provided in 2008 and 2009 by HERA.

NCSHA is disappointed in the FY 2011 budget’s proposed 10 percent cut to the HOME Investment Partnerships Program. This flexible funding source allows states and localities to leverage other federal and private funds to meet a wide range of housing needs and has received more than its share of funding cuts in recent years.

NCSHA supports the proposed funding increases for Housing Choice Vouchers and project-based Section 8 and urges Congress to fund as many new vouchers as possible to help families still waiting for assistance.

HUD’s Transforming Rental Assistance initiative, which proposes to consolidate several existing tenant-based and project-based rental assistance programs, must be reviewed carefully to identify and address any potentially destabilizing impact it may have on existing properties.

The budget does not reveal additional information on the Administration’s plans to reform the Government-Sponsored Enterprises (GSEs). NCSHA believes that the GSEs should employ the proven and sound HFA affordable housing delivery system and support that system with low-cost capital and liquidity, through, among other means, investment in Housing Bonds, Housing Credits, and HFA loan products under advantageous terms.

NCSHA’s analysis of the budget is available on our Web site at www.ncsha.org.

Mindy La Branche is a legislative and policy associate at the National Council of State Housing Agencies.

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