By Christina Mlynski
President Barack Obama’s budget for fiscal year 2014 looks at taking critical steps to grow the economy, specifically increasing measures to strengthen the housing market by ensuring every homeowner has an opportunity to refinance at today’s rates.
Feeding of the positive momentum in housing, Obama wants to provide $47.6 billion for Department of Housing and Urban Development housing programs, an increase of $4.2 billion, or 9.7%, from 2013, according to the proposed budget.
More than 90% of the funding increase will be used to maintain current levels of rental and homelessness assistance for families.
“Thanks to the hard work and determination of the American people, we have made significant progress over the last 4 years,” said President Barack Obama.
He added, “Our housing market is healing, our stock market is rebounding, and consumers, patients and homeowners enjoy stronger protections than ever before.”
Additionally, the budget also makes investments to revitalize distressed neighborhoods, reduces blight in communities hardest hit by the foreclosure crisis and supports sustainable economic development.
However, the White House must push for cuts and chose a few housing initiatives to take a hit, including the Home Investment Partnerships Program, which is allocated $950 million for 2014, down 5% from the 2012 enacted level.
The second limits funding for new housing construction, cutting $14 million from the 2012 enacted level. The remaining $526 million will support all 150,000 existing units in these programs.
In regards to rental housing assistance, the budget will provide $37.4 billion to 4.7 million low-income families, up from $34.8 billion allocated in the 2013 budget. Additionally, $2.4 billion is provided to end homelessness, up from $2.3 billion in the 2013 budget.
Meanwhile, $400 million is provided through the budget to transform neighborhoods with distressed HUD-assisted housing, up from $150 million in the 2013 budget.
The budget also will expand the Moving to Work Program to test locally driven rental assistance policies to achieve positive outcomes for families, streamline program administration and reduce federal costs.
President Obama proposed two programs to extend the success of the Neighborhood Stabilization Program while creating construction jobs to rehabilitate properties.
As a result, the budget will issue $3 billion for the Community Development Block Grant program and neighborhood stabilization activities. This funding level includes $200 million in new competitive funds to continue mitigating the foreclosure crisis.
The budget also includes $20 billion for the Housing Choice Voucher program to assist more than 2.2 million families with housing.
The Obama Administration projects that the Federal Housing Administration will insure $178 billion in loans in 2014, supporting new home purchases and refinanced mortgages that would significantly reduce borrower payments.
Additionally, the recent increase in FHA premiums will boost the agency’s capital reserves and increase Federal revenues.
FHA will unveil its proposed budget for 2014 Wednesday, which is likely to express the agency’s stance on the probability of making a first time draw from the Treasury, given the mutual mortgage insurance fund is at negative $13.5 billion.