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Trump Administration Releases FY 2019 Budget Proposing 18.3% Reduction in HUD Funding

Yesterday, the Trump administration released its proposed budget for the 2019 fiscal year. Overall, the budget proposes an $8.8 billion (18.3%) reduction in the HUD budget from the 2017 enacted level, a more drastic cut than the $6 billon HUD budget reduction the Administration proposed for fiscal year 2018. Significant proposals in the budget include:

  • Elimination of several programs including the Community Development Block Grant (CDBG), HOME Investment Partnership Program, Public Housing Capital Fund and Choice Neighborhoods

  • $17.5 billion in Section 8 annual contribution contract renewals (an $800+ million decrease from 2017 enacted level)

  • $10.866 billion in project-based rental assistance (a $50 million increase from the 2017 enacted level)

  • $110 million decrease in Housing Choice Voucher administrative fees

  • $100 million request for the Rental Assistance Demonstration (RAD) program to cover the incremental subsidy for public housing properties that would otherwise be unable to covert to Section 8 assistance

  • Proposed elimination of the unit cap for RAD conversions and September 30, 2020 deadline for RAD application submissions

  • In addition to the elimination of the Capital Fund, $1.7 billion in reductions to the Public Housing Operating Fund

  • $75 million request for the Family Self-Sufficiency program (same as 2017 enacted level)

  • $10 million request for the Jobs Plus Initiative (a $5 million decrease from the 2018 Senate recommendation)

  • Maintained funding levels for lead-based paint mitigation efforts

  • Unspecified funding request to evaluate and improve the EnVision Centers recently launched by Secretary Carson

  • $20 million increase to the Federal Housing Administration (FHA) operations (although a new fee would be imposed on FHA lenders)

  • Requirement that non-disabled persons receiving HUD assistance contribute more than 30% of their adjusted income to their housing costs

Other housing and community development components of this budget include an elimination of the Community Development Financial Institutions (CDFI) Fund grant and direct loan program, $1.8 billion request for veteran’s homelessness programs, and a funding increase for the U.S. Department of Agriculture (USDA) single family housing guaranteed loan program. A full copy of the budget proposal and related materials are available at be www.whitehouse.gov/omb/budget.

Remember that Congress is responsible for passing the budget; this is just a proposal. It remains to be seen if Congress will adopt the President’s proposal.

Copyright © by Ballard Spahr LLP

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About this Author

Shanellah Verna, Washington DC, Ballard Spahr, Real Estate Lawyer
Associate

Shanellah Verna is a member of the firm’s Real Estate Department, where she handles general real estate matters. She has experience with federal, state, and local housing laws as well as with property dispositions, regulatory compliance, licensing, corporate governance, and tax issues.

While in law school, Ms. Verna interned at the District of Columbia Housing Authority in the Office of the General Counsel of the Real Estate and Transactional Law Group. Her duties included compliance review of management documents and proposed regulations, drafting of legal memoranda and legislative...

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