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April 2, 2004

New HUD Secretary

Alphonso Jackson has been confirmed as Secretary of HUD. The Senate confirmed Jackson on March 31.

NAHMA Testifies on HUD Budget

On March 25, NAHMA Vice President and Federal Government Affairs Committee Vice Chair Michelle Norris testified before the House Appropriations VA-HUD Subcommittee on the importance of federal funding for multifamily housing programs. In her testimony, Michelle urged the Subcommittee to:
  • Reject the “Flexible Voucher Program” block grant proposed in the President’s 2005 Budget;
  • Provide full funding for all authorized Section 8 vouchers;
  • Increase funding for the Section 202 and Section 811 programs above the 2004 appropriation levels at least at the rate of inflation;
  • Place a higher priority on affordable housing preservation;
  • Relieve affordable housing operators of the unfunded mandate and potential fair housing / civil rights liabilities imposed by HUD’s guidance for providing meaningful access to housing programs for Limited English Proficient (LEP) persons;
  • Be willing to explore possible solutions to late Housing Assistance Payments (HAPs) problem; and
  • Reject proposed cuts to federal multifamily housing programs.
Additional Appropriations Hearings RHS Administrator Arthur A. Garcia testified before the House Agriculture, Rural Development, FDA and Related Agencies Appropriations Subcommittee on March 25. His testimony noted:
  • Most of RHS’ multifamily budget ($592 million of $822.5 million) will be directed to renewal of 4 year rental assistance contracts;
  • The Comprehensive Program Assessment report on physical condition and market analysis is expected “by this spring;”
  • The automation forecasting tool for rental assistance is expected “to be available by March of FY 2004;
  • RHS is working on drafting the final 3560 rule;
  • Phase 4 of the Multi-Family Information System (MFIS) is scheduled for implementation in May 2004; it will provide “electronic debiting and crediting of borrowers’ accounts” and a website to locate all the MFH properties;
  • The Management Agent Interactive Network Connection “is scheduled to become mandatory this summer” with the publication of the Final 3560 Rule (emphasis added). This system allows management agent to transmit tenant and property information to RHS over the Internet.
  • In discussion prepayment and preservation, the Administrator noted, “Key factors that affect many owners when selling their property is the effect ofexit taxes and expectations for equity.” (Emphasis added.)
  • RHS is developing a “revitalization tool kit” to offer alternatives to RHS borrowers “in financing, debt write-offs and subordination, third party financing, and transfer approvals.”
To read Administrator Garcia’s 20-page testimony in its entirety, see https://appropriations.house.gov/index.cfm?Fuseaction=Hearings.Testimony&HearingID=322&WitnessID=604. On April 1, the Senate Appropriations Subcommittee on VA-HUD and Independent Agencies held a hearing on the FY05 HUD Budget. Witnesses included FHA Commissioner John Weicher; Assistant Secretary for Public and Indian Housing Michael Liu; and Assistant Secretary for Community Planning Development Roy A. Bernardi.

Budget Resolution

On March 25, the House narrowly passed its version of the FY 2005 Budget Resolution by a vote of 215-212. Briefly, this budget would extend parts of expiring tax laws which expanded the 10 percent tax rate, provided “marriage penalty” tax relief, and increased the child tax credit. According to House Budget Committee Chairman Jim Nussle, the budget calls for “holding the line on all nondefense discretionary spending and called for a reduction of ½ of 1 percent from the President’s requested increase of 9.7 percent of homeland security.” It cuts the deficit in half in 4 years. It requires additional oversight by requiring authorizing committees to identify “waste, fraud and abuse.” It also freezes funding for programs that have not been authorized. Finally, it includes $50 billion for the war in Iraq. Differences between the House and Senate versions of this legislation are being resolved in a conference committee. By law, the budget resolution is supposed to be approved.

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