DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Funds

[To conduct a demonstration designed to preserve and improve public housing and certain other multifamily housing through the voluntary conversion of properties with assistance under section 9 of the United States Housing Act of 1937, (hereinafter, "the Act''), or the moderate rehabilitation program under section 8(e)(2) of the Act (except for funds allocated under such section for single room occupancy dwellings as authorized by title IV of the McKinney-Vento Homeless Assistance Act), to properties with assistance under a project-based subsidy contract under section 8 of the Act, which shall be eligible for renewal under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997, or assistance under section 8(o)(13) of the Act, the Secretary may transfer amounts provided through contracts under section 8(e)(2) of the Act or under the headings "Public Housing Capital Fund'' and "Public Housing Operating Fund'' to the headings "Tenant-Based Rental Assistance'' or "Project-Based Rental Assistance'': Provided, That the initial long-term contract under which converted assistance is made available may allow for rental adjustments only by an operating cost factor established by the Secretary, and shall be subject to the availability of appropriations for each year of such term: Provided further, That project applications may be received under this demonstration until September 30, 2015: Provided further, That any increase in cost for "Tenant-Based Rental Assistance'' or "Project-Based Rental Assistance'' associated with such conversion shall be equal to amounts transferred from "Public Housing Capital Fund'' and "Public Housing Operating Fund'' or other account from which it was transferred: Provided further, That not more than 60,000 units currently receiving assistance under section 9 or section 8(e)(2) of the Act shall be converted under the authority provided under this heading: Provided further, That tenants of such properties with assistance converted from assistance under section 9 shall, at a minimum, maintain the same rights under such conversion as those provided under sections 6 and 9 of the Act: Provided further, That the Secretary shall select properties from applications for conversion as part of this demonstration through a competitive process: Provided further, That in establishing criteria for such competition, the Secretary shall seek to demonstrate the feasibility of this conversion model to recapitalize and operate public housing properties (1) in different markets and geographic areas, (2) within portfolios managed by public housing agencies of varying sizes, and (3) by leveraging other sources of funding to recapitalize properties: Provided further, That the Secretary shall provide an opportunity for public comment on draft eligibility and selection criteria and procedures that will apply to the selection of properties that will participate in the demonstration: Provided further, That the Secretary shall provide an opportunity for comment from residents of properties to be proposed for participation in the demonstration to the owners or public housing agencies responsible for such properties: Provided further, That the Secretary may waive or specify alternative requirements for (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment) any provision of section 8(o)(13) or any provision that governs the use of assistance from which a property is converted under the demonstration or funds made available under the headings of "Public Housing Capital Fund'', "Public Housing Operating Fund'', and "Project-Based Rental Assistance'', under this Act or any prior Act or any Act enacted during the period of conversion of assistance under the demonstration for properties with assistance converted under the demonstration, upon a finding by the Secretary that any such waivers or alternative requirements are necessary for the effective conversion of assistance under the demonstration: Provided further, That the Secretary shall publish by notice in the Federal Register any waivers or alternative requirements pursuant to the previous proviso no later than 10 days before the effective date of such notice: Provided further, That the demonstration may proceed after the Secretary publishes notice of its terms in the Federal Register: Provided further, That notwithstanding sections 3 and 16 of the Act, the conversion of assistance under the demonstration shall not be the basis for re-screening or termination of assistance or eviction of any tenant family in a property participating in the demonstration, and such a family shall not be considered a new admission for any purpose, including compliance with income targeting requirements: Provided further, That in the case of a property with assistance converted under the demonstration from assistance under section 9 of the Act, section 18 of the Act shall not apply to a property converting assistance under the demonstration for all or substantially all of its units, the Secretary shall require ownership or control of assisted units by a public or nonprofit entity except as determined by the Secretary to be necessary pursuant to foreclosure, bankruptcy, or termination and transfer of assistance for material violations or substantial default, in which case the priority for ownership or control shall be provided to a capable public entity, then a capable entity, as determined by the Secretary, shall require long-term renewable use and affordability restrictions for assisted units, and may allow ownership to be transferred to a for-profit entity to facilitate the use of tax credits only if the public housing agency preserves its interest in the property in a manner approved by the Secretary, and upon expiration of the initial contract and each renewal contract, the Secretary shall offer and the owner of the property shall accept renewal of the contract subject to the terms and conditions applicable at the time of renewal and the availability of appropriations each year of such renewal: Provided further, That the Secretary may permit transfer of assistance at or after conversion under the demonstration to replacement units subject to the requirements in the previous proviso: Provided further, That the Secretary may establish the requirements for converted assistance under the demonstration through contracts, use agreements, regulations, or other means: Provided further, That the Secretary shall assess and publish findings regarding the impact of the conversion of assistance under the demonstration on the preservation and improvement of public housing, the amount of private sector leveraging as a result of such conversion, and the effect of such conversion on tenants: Provided further, That for fiscal years 2012 and 2013, owners of properties assisted under section 101 of the Housing and Urban Development Act of 1965, section 236(f)(2) of the National Housing Act, or section 8(e)(2) (except for funds allocated under such section for single room occupancy dwellings as authorized by title IV of the McKinney-Vento Homeless Assistance Act) of the United States Housing Act of 1937, for which an event after October 1, 2006 has caused or results in the termination of rental assistance or affordability restrictions and the issuance of tenant protection vouchers under section 8(o) of the Act, shall be eligible, subject to requirements established by the Secretary, including but not limited to tenant consultation procedures and agreement of the administering public housing agency, for conversion of assistance available for such vouchers to assistance under section 8(o)(13) of the Act, to which the limitation under subsection (B) of section 8(o)(13) of the Act shall not apply and for which the Secretary of Housing and Urban Development may waive or alter the provisions of subparagraphs (C) and (D) of section 8(o)(13) of the Act: Provided further, That with respect to the previous proviso, the Comptroller General of the United States shall conduct a study of the long-term impact of the previous proviso on the ratio of tenant-based vouchers to project-based vouchers.] (Department of Housing and Urban Development Appropriations Act, 2012.)

For activities and assistance for the provision of tenant-based rental assistance authorized under the United States Housing Act of 1937, as amended (42 U.S.C. 1437 et seq.) ("the Act'' herein), not otherwise provided for, [$14,914,369,000] $15,074,283,000, to remain available until expended, shall be available on October 1, [2011] 2012 (in addition to the $4,000,000,000 previously appropriated under this heading that became available on October 1, [2011] 2012), and $4,000,000,000, to remain available until expended, shall be available on October 1, [2012] 2013: Provided, That [of the] amounts made available under this heading are provided as follows:

(1) [$17,242,351,000] $17,237,948,000 shall be available for renewals of expiring section 8 tenant-based annual contributions contracts (including renewals of enhanced vouchers under any provision of law authorizing such assistance under section 8(t) of the Act) and including renewal of other special purpose incremental vouchers: Provided, That notwithstanding any other provision of law, from amounts provided under this paragraph and any carryover, the Secretary for the calendar year [2012] 2013 funding cycle shall provide renewal funding for each public housing agency based on validated voucher management system (VMS) leasing and cost data for the prior calendar year and by applying an inflation factor as established by the Secretary, by notice published in the Federal Register, and by making any necessary adjustments for the costs associated with the first-time renewal of vouchers under this paragraph including tenant protection and HOPE VI vouchers: Provided further, That in determining calendar year 2013 funding allocation under this heading for public housing agencies, including agencies participating in the Moving To Work (MTW) demonstration, the Secretary may take into account the anticipated impact of changes in minimum tenant rents, targeting, and medical expense thresholds to public housing agencies' contract renewal needs: [Provided further, That none of the funds provided under this paragraph may be used to fund a total number of unit months under lease which exceeds a public housing agency's authorized level of units under contract, except for public housing agencies participating in the Moving to Work (MTW) demonstration, which are instead governed by the terms and conditions of their MTW agreements:] Provided further, That the Secretary shall, to the extent necessary to stay within the amount specified under this paragraph (except as otherwise modified under this Act), pro rate each public housing agency's allocation otherwise established pursuant to this paragraph: Provided further, That except as provided in the following provisos, the entire amount specified under this paragraph (except as otherwise modified under this Act) shall be obligated to the public housing agencies based on the allocation and pro rata method described above, and the Secretary shall notify public housing agencies of their annual budget [not later than] by the latter of 60 days after enactment of this Act or March 1, 2013: Provided further, That the Secretary may extend the [60-day] notification period, with [the prior written approval of] notification to the House and Senate Committees on Appropriations: Provided further, That public housing agencies participating in the [Moving to Work] MTW demonstration shall be funded pursuant to their [Moving to Work] MTW agreements and shall be subject to the same pro rata adjustments under the previous provisos: Provided further, That the Secretary may offset public housing agencies' calendar year 2013 allocations by the excess amount of agencies' reserves as established by the Secretary: Provided further, That public housing agencies participating in the MTW demonstration may be subject to an offset, as determined by the Secretary, from the agencies' calendar year 2013 MTW funding allocation: Provided further, That the Secretary shall use any offset referred to in the previous two provisos to first avoid or reduce the proration of renewal funding allocations and then on the basis of need, as established by the Secretary: Provided further, That up to [$103,000,000] $75,000,000 shall be available only: (1) [to] for adjustments in the allocations for public housing agencies, after application for an adjustment by a public housing agency, that experienced a significant increase, as determined by the Secretary, in renewal costs of [tenant-based rental assistance] vouchers resulting from unforeseen circumstances or from portability under section 8(r) of the Act; (2) for vouchers that were not in use during the 12-month period in order to be available to meet a commitment pursuant to section 8(o)(13) of the Act; (3) for adjustments for costs associated with HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers; and (4) for [incremental tenant-based assistance for eligible families currently assisted under the Disaster Voucher Program as authorized by Public Law 109–148 under this heading and the Disaster Housing Assistance Program for Hurricanes Ike and Gustav on the condition that such vouchers will not be re-issued when families leave the program] adjustments in the allocations for public housing agencies that experienced a significant increase, as determined by the Secretary, in renewal costs as a result of participation in the Small Area Fair Market Rent demonstration: Provided further, That the Secretary shall allocate amounts under the previous proviso based on need as determined by the Secretary;

(2) $75,000,000 shall be for section 8 rental assistance for relocation and replacement of housing units that are demolished or disposed of pursuant to section 18 of the Act, conversion of section 23 projects to assistance under section 8, the family unification program under section 8(x) of the Act, relocation of witnesses in connection with efforts to combat crime in public and assisted housing pursuant to a request from a law enforcement or prosecution agency, enhanced vouchers under any provision of law authorizing such assistance under section 8(t) of the Act, HOPE VI vouchers, mandatory and voluntary conversions, and tenant protection assistance including replacement and relocation assistance or for project-based assistance to prevent the displacement of unassisted elderly tenants currently residing in section 202 properties financed between 1959 and 1974 that are refinanced pursuant to Public Law 106–569, as amended, or under the authority as provided under this Act: Provided, That when a public housing development is submitted for demolition or disposition under section 18 of the Act, the Secretary may provide section 8 rental assistance when the units pose an imminent health and safety risk to residents[: Provided further, That the Secretary may only provide replacement vouchers for units that were occupied within the previous 24 months that cease to be available as assisted housing, subject only to the availability of funds: Provided further, That of the amounts made available under this paragraph, $10,000,000 may be available to provide tenant protection assistance, not otherwise provided under this paragraph, to residents residing in low-vacancy areas and who may have to pay rents greater than 30 percent of household income, as the result of (1) the maturity of a HUD-insured, HUD-held or section 202 loan that requires the permission of the Secretary prior to loan prepayment; (2) the expiration of a rental assistance contract for which the tenants are not eligible for enhanced voucher or tenant protection assistance under existing law; or (3) the expiration of affordability restrictions accompanying a mortgage or preservation program administered by the Secretary: Provided further, That such tenant protection assistance made available under the previous proviso may be provided under the authority of section 8(t) or section 8(o)(13) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)): Provided further, That the Secretary shall issue guidance to implement the previous provisos, including, but not limited to, requirements for defining eligible at-risk households within 120 days of the enactment of this Act];

(3) [$1,350,000,000] $1,575,000,000 shall be for administrative and other expenses of public housing agencies in administering the section 8 tenant-based rental assistance program, of which up to $50,000,000 shall be available to the Secretary to allocate to public housing agencies that need additional funds to administer their section 8 programs, including fees associated with section 8 tenant protection rental assistance, the administration of disaster– related vouchers, Veterans Affairs Supportive Housing vouchers, and other special purpose incremental vouchers: Provided, That no less than [$1,300,000,000] $1,525,000,000 of the amount provided in this paragraph shall be allocated to public housing agencies for the calendar year [2012] 2013 funding cycle based on section 8(q) of the Act (and related Appropriation Act provisions) as in effect immediately before the enactment of the Quality Housing and Work Responsibility Act of 1998 (Public Law 105–276): Provided further, That if the amounts made available under this paragraph are insufficient to pay the amounts determined under the previous proviso, the Secretary may decrease the amounts allocated to agencies by a uniform percentage applicable to all agencies receiving funding under this paragraph or may, to the extent necessary to provide full payment of amounts determined under the previous proviso, utilize unobligated balances, including recaptures and carryovers, remaining from funds appropriated to the Department of Housing and Urban Development under this heading from prior fiscal years, notwithstanding the purposes for which such amounts were appropriated: Provided further, That all public housing agencies participating in the MTW demonstration shall be funded pursuant to their MTW agreements, and shall be subject to the same uniform percentage decrease as under the previous proviso: Provided further, That amounts provided under this paragraph shall be only for activities related to the provision of tenant-based rental assistance authorized under section 8, including related development activities;

[(4) $60,000,000 shall be available for family self-sufficiency coordinators under section 23 of the Act;]

[(5) $112,018,000] (4) $111,335,000 for the renewal of tenant-based assistance contracts under section 811 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013), including necessary administrative expenses: Provided, That administrative and other expenses of public housing agencies in administering the special purpose vouchers in this paragraph shall be funded under the same terms and be subject to the same pro rata reduction as the percent decrease for administrative and other expenses to public housing agencies under paragraph (3) of this heading;

[(6)] (5) $75,000,000 for incremental rental voucher assistance for use through a supported housing program administered in conjunction with the Department of Veterans Affairs as authorized under section 8(o)(19) of the United States Housing Act of 1937: Provided, That the Secretary of Housing and Urban Development shall make such funding available, notwithstanding section 204 (competition provision) of this title, to public housing agencies that partner with eligible VA Medical Centers or other entities as designated by the Secretary of the Department of Veterans Affairs, based on geographical need for such assistance as identified by the Secretary of the Department of Veterans Affairs, public housing agency administrative performance, and other factors as specified by the Secretary of Housing and Urban Development in consultation with the Secretary of the Department of Veterans Affairs: Provided further, That the Secretary of Housing and Urban Development may waive, or specify alternative requirements for (in consultation with the Secretary of the Department of Veterans Affairs), any provision of any statute or regulation that the Secretary of Housing and Urban Development administers in connection with the use of funds made available under this paragraph (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment), upon a finding by the Secretary that any such waivers or alternative requirements are necessary for the effective delivery and administration of such voucher assistance: Provided further, That assistance made available under this paragraph shall continue to remain available for homeless veterans upon turn-over; and

[(7)] (6) The Secretary shall separately track all special purpose vouchers funded under this heading. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The Budget provides $19.1 billion for the Tenant-Based Rental Assistance Program (also known as the Housing Choice Voucher program). The Housing Choice Voucher program provides housing assistance to over two million extremely low- to very low-income families to rent in the neighborhoods of their choice. This is the Federal government's largest and most income-targeted program for assisting very low-income families to rent decent, safe and sanitary housing in the private market. About 2,350 state and local Public Housing Authorities (PHAs) administer the Housing Choice Voucher program.

In addition to continuing assistance for families anticipated to be under lease by 2013, the Budget provides new vouchers to make progress on HUD's annual performance goals for preserving the number of families receiving rental assistance and for reducing the number of homeless families and homeless veterans. The Budget includes $111 million to renew nearly 15,000 Mainstream vouchers for Housing for Persons with Disabilities previously funded from the Section 811 account; and $75 million in new vouchers for homeless veterans through the HUD-Veteran Affairs Supportive Housing (HUD-VASH) program. The account also includes $75 million for tenant protection vouchers, which are provided when certain actions occur beyond the control of the residents, such as public housing demolition or disposition, or when landlords terminate their Project-Based Rental Assistance contracts.

The Budget includes several policy proposals that provide administrative and program flexibility, implement program management improvements, and achieve measurable savings. The Budget proposes the following: (1) Sponsor-Based Assistance for Homeless Families. This proposal supports the Federal Plan to Prevent and End Homelessness by proposing flexible authority for sponsor-based voucher assistance. PHAs would administer competitions to award voucher funding to not-for-profit service providers that leverage and deliver supportive services for homeless families; (2) Biennial and Alternative Inspections. This proposal reduces PHA administrative burden and allows the PHAs to focus limited resources on higher risk units by changing the requirement for mandatory inspection of units from one to every two years. In addition, PHAs will be able to satisfy inspection requirements through alternative standards if they are established by other Federal housing programs, such as HOME Investment Partnerships and Low-Income Housing Tax Credit programs; (3) Consolidated Family Self-Sufficiency (FSS) Program. This proposal streamlines services and aligns FSS policies and service coordination for HUD-assisted residents in Housing Choice Voucher, Public Housing, and Project-Based Rental Assistance (please see FSS account); and (4) Consolidated Opportunities for Resident Enrichment (CORE). This proposal authorizes PHAs to use a portion of their funds from Public Housing Capital, Public Housing Operating, and Housing Choice Voucher administrative fees to provide service coordination, case management, and other supportive service activities that promote positive resident outcomes related to education, health, self-sufficiency and quality of life.

The Administration also continues to improve the management of the Housing Choice Voucher program by making progress on the development of the Next Generation Management System, which will comprehensively overhaul and improve HUD information technology systems to better manage and administer the program.

The Budget proposes an exemption of MR properties from the 60,000 unit cap on properties that can convert to PBRA or PBV contracts. The 60,000 unit cap would apply to Public Housing conversions alone, while the number of MR conversions (at existing subsidy levels) would not be constrained. This will enable the Department to conduct a demonstration and complete evaluation of all conversions while also preserving as many viable MR properties as possible.

The Budget also includes key provisions that reform the rent structure across HUD's rental assistance programs and effectively reduce the amount necessary for contract renewals: (1) The required minimum rent is increased to $75 per month, which is comparable to the minimum rent ceiling of $50 enacted in 1998 adjusted for inflation. Consistent with current policy, PHAs must exempt families facing financial hardship from payment of the minimum rent; (2) The definition of extremely low-income is broadened to apply to families with incomes that are the higher of 30 percent of Area Median Income or the Federal poverty level; and (3) The threshold used to determine deductions for unreimbursed medical expenses is increased from 3 to 10 percent of family income.

In 2013, the Administration will also begin implementation of the Rental Assistance Demonstration (RAD), as authorized by the Consolidated and Further Continuing Appropriations Act of 2012 (P.L. 112–55). RAD provides PHAs and owners of rental properties assisted under the Public Housing, Section 8 Moderate Rehabilitation, Rent Supplement, and Rental Assistance Payment programs the option to convert their properties to long-term Project-Based Rental Assistance (PBRA) or Project-Based Voucher contracts. The Budget reflects a total estimated transfer of $74 million from the Public Housing Capital and Operating Funds to the Tenant-Based Rental Assistance account to implement the program.

[Of the unobligated] Unobligated balances, including recaptures and carryover, remaining from funds appropriated to the Department of Housing and Urban Development under this heading, [$200,000,000 are rescinded, to be effected by the Secretary of Housing and Urban Development no later than September 30, 2012] the heading "Annual Contributions for Assisted Housing", and the heading "Project-Based Rental Assistance", for fiscal year 2013 and prior years may be used for renewal of or amendments to section 8 project-based contracts and for performance-based contract administrators, notwithstanding the purposes for which such funds were appropriated: Provided, [That if insufficient funds exist under this heading, the remaining balance may be derived from any other unobligated balances available under any heading under this title funded in fiscal year 2011 and prior years: Provided further, That the Secretary shall notify the Committees on Appropriations of the unobligated balances used to meet this rescission 30 days in advance of such rescission: Provided further, That any such balances governed by reallocation provisions under the statute authorizing the program for which the funds were originally appropriated shall be available for the rescission: Provided further,] That any obligated balances of contract authority from fiscal year 1974 and prior that have been terminated [shall be] are hereby permanently cancelled: Provided further, That amounts previously recaptured, or recaptured during the current fiscal year, from section 8 project-based contracts from source years fiscal year 1975 through fiscal year 1987 are hereby permanently cancelled, and an amount of additional new budget authority, equivalent to the amount permanently cancelled is hereby appropriated, to remain available until expended, for the purposes set forth under this heading, in addition to amounts otherwise available. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

Until 2005, the Housing Certificate Fund provided funding to both the project-based and tenant-based components of the Section 8 program. Project-Based Rental Assistance and Tenant-Based Rental Assistance are now funded in separate accounts. The Housing Certificate Fund retains and recovers balances from previous years' appropriations. The Budget reinstates appropriations language providing for recovered amounts to be used to support contract renewals, amendments, and performance-based contract administrators.

For activities and assistance for the provision of project-based subsidy contracts under the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) ("the Act''), not otherwise provided for, [$8,939,672,000] $8,300,400,000, to remain available until expended, shall be available on October 1, [2011] 2012 (in addition to the $400,000,000 previously appropriated under this heading that became available October 1, [2011] 2012), and $400,000,000, to remain available until expended, shall be available on October 1, [2012] 2013: Provided, That the amounts made available under this heading shall be available for expiring or terminating section 8 project-based subsidy contracts (including section 8 moderate rehabilitation contracts), for amendments to section 8 project-based subsidy contracts (including section 8 moderate rehabilitation contracts), for contracts entered into pursuant to section 441 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11401), for renewal of section 8 contracts for units in projects that are subject to approved plans of action under the Emergency Low Income Housing Preservation Act of 1987 or the Low-Income Housing Preservation and Resident Homeownership Act of 1990, and for administrative and other expenses associated with project-based activities and assistance funded under this paragraph: Provided further, That of the total amounts provided under this heading, not to exceed [$289,000,000] $260,000,000 shall be available for performance-based contract administrators for section 8 project-based assistance: Provided further, That the Secretary of Housing and Urban Development may also use such amounts in the previous proviso for performance-based contract administrators for the administration of: interest reduction payments pursuant to section 236(a) of the National Housing Act (12 U.S.C. 1715z-1(a)); rent supplement payments pursuant to section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s); section 236(f)(2) rental assistance payments (12 U.S.C. 1715z-1(f)(2)); project rental assistance contracts for the elderly under section 202(c)(2) of the Housing Act of 1959 (12 U.S.C. 1701q); project rental assistance contracts for supportive housing for persons with disabilities under section 811(d)(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013(d)(2)); project assistance contracts pursuant to section 202(h) of the Housing Act of 1959 (Public Law 86–372; 73 Stat. 667); and loans under section 202 of the Housing Act of 1959 (Public Law 86–372; 73 Stat. 667): Provided further, That amounts recaptured under this heading, the heading "Annual Contributions for Assisted Housing", or the heading "Housing Certificate Fund" may be used for renewals of or amendments to section 8 project-based contracts or for performance-based contract administrators, notwithstanding the purposes for which such amounts were appropriated: Provided further, That, notwithstanding any other provision of law, upon the request of the Secretary of Housing and Urban Development, project funds that are held in residual receipts accounts for any project subject to a section 8 project-based Housing Assistance Payments contract that authorizes HUD to require that surplus project funds be deposited in an interest-bearing residual receipts account and that are in excess of an amount to be determined by the Secretary, shall be remitted to the Department and deposited in this account, to be available until expended: Provided further, That amounts deposited pursuant to the previous proviso shall be available in addition to the amount otherwise provided by this heading for uses authorized under this heading. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The Budget requests $8.7 billion for Project-Based Rental Assistance (PBRA), of which $400 million is requested as an advance appropriation to become available in 2014. The request reflects a reduction in upfront funding for some PBRA contracts that cross fiscal years, which will not reduce or delay payments to landlords or impact the number of families served by the program.

The PBRA program assists approximately 1.2 million extremely low- to low-income households in obtaining decent, safe, and sanitary housing in private accommodations. PBRA serves families, elderly households and disabled households and provides transitional housing for the homeless. Through this funding, HUD supports approximately 17,550 contracts with private owners of multifamily housing by paying the difference between what a household can afford, generally 30 percent of its eligible income, and the approved market-based rent for a housing unit.

The Budget includes two proposals that provide measurable savings and policy alignment across all HUD-assisted rental housing. The minimum rent is increased to $75 per month and the threshold for deducting unreimbursed medical expenses is increased to 10 percent of family income. Consistent with current policy, families facing financial hardship must be exempt from payment of the minimum rent. PBRA program costs are further reduced through the following proposals: (1) improving oversight of market rent studies used to set subsidy payment levels; (2) capping annual subsidy increases for certain properties; and (3) using excess reserves (residual receipts) to offset HUD payments to landlords or, in the case of "new regulation" contracts, collecting those reserves in the PBRA account and using them to cover a portion of the payments.

Under the Rental Assistance Demonstration (RAD), authorized by the Consolidated and Further Continuing Appropriations Act of 2012 (P.L. 112–55), PHAs and owners of rental properties assisted under the Public Housing and Section 8 Moderate Rehabilitation (MR) programs have the option to convert the assistance of their properties to long-term PBRA or Project-Based Voucher (PBV, funded in the Tenant-Based Rental Assistance account) contracts. The Department will begin to implement RAD conversions in 2013. An estimated $51 million and $23 million requested for the Public Housing Operating Fund and Public Housing Capital Fund, respectively, will be transferred to the PBRA account to fund the conversion of approximately 24,000 Public Housing units to long-term PBRA contracts.

The Budget proposes an exemption of MR properties from the 60,000 unit cap on properties that can convert to PBRA or PBV contracts. The 60,000 unit cap would apply to Public Housing conversions alone, while the number of MR conversions (at existing subsidy levels) would not be constrained. This will enable the Department to conduct a demonstration and complete evaluation of all conversions while also preserving as many viable MR properties as possible.

Program activities include the following:

Contract Renewals and Amendments.— These activities provide funding for HUD to renew expiring contracts and amend contracts that have not expired but require additional funding for HUD to meet remaining payment obligations. These funds cover the direct housing costs of families in the program. Currently, 87 percent of contracts are funded annually; the other 13 percent are long-term contracts funded with previous appropriations, of which 40 percent will need amendment funding in 2013. Appropriations for these activities are supplemented with recoveries of excess balances remaining on expired contracts that utilized less than anticipated resources during their initial terms.

Contract Administrators.—This activity funds the local level administration of the program through HUD contracts with performance-based contract administrators. These entities, which are typically public housing authorities or state housing finance agencies, are responsible for conducting on-site management reviews of assisted properties; adjusting contract rents; reviewing, processing, and paying monthly vouchers submitted by owners; renewing contracts with property owners; and responding to health and safety issues at properties. The Budget requests up to $260 million for this set-aside.

For the Public Housing Capital Fund Program to carry out capital and management activities for public housing agencies, as authorized under section 9 of the United States Housing Act of 1937 (42 U.S.C. 1437g) (the "Act'') [$1,875,000,000] $2,070,000,000, to remain available until September 30, [2015] 2016: Provided, That notwithstanding any other provision of law or regulation, during fiscal year [2012] 2013 the Secretary of Housing and Urban Development may not delegate to any Department official other than the Deputy Secretary and the Assistant Secretary for Public and Indian Housing any authority under paragraph (2) of section 9(j) regarding the extension of the time periods under such section: Provided further, That for purposes of such section 9(j), the term "obligate'' means, with respect to amounts, that the amounts are subject to a binding agreement that will result in outlays, immediately or in the future: Provided further, That up to [$10,000,000] $15,345,000 shall be to support [the] ongoing Public Housing Financial and Physical Assessment activities [of the Real Estate Assessment Center (REAC)]: Provided further, That of the total amount provided under this heading, not to exceed $20,000,000 shall be available for the Secretary to make grants, notwithstanding section 204 of this Act, to public housing agencies for emergency capital needs [including safety and security measures necessary to address crime and drug-related activity as well as needs] resulting from unforeseen or unpreventable emergencies and natural disasters excluding Presidentially declared emergencies and natural disasters under the Robert T. Stafford Disaster Relief and Emergency Act (42 U.S.C. 5121 et seq.) occurring in fiscal year [2012: Provided further, That of the total amount provided under this heading $50,000,000 shall be for supportive services, service coordinator and congregate services as authorized by section 34 of the Act (42 U.S.C. 1437z-6) and the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.)] 2013: Provided further, That of the total amount provided under this heading, up to $5,000,000 is to support the costs of administrative and judicial receiverships: Provided further, That from the funds made available under this heading, the Secretary shall provide bonus awards in fiscal year [2012] 2013 to public housing agencies that are designated high performers: Provided further, That up to $50,000,000 of funds made available under this heading shall be used for a Jobs-Plus Pilot initiative modeled after the Jobs-Plus demonstration: Provided further, That the Jobs-Plus Pilot initiative shall provide competitive grants to partnerships between public housing authorities, local workforce investment boards established under section 117 of the Workforce Investment Act of 1998, and other agencies and organizations that provide support to help public housing residents obtain employment and increase earnings: Provided further, That the Secretary may waive or specify alternative requirements for any provision of the United States Housing Act of 1937 (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment) upon a finding by the Secretary that any such waivers or alternative requirements are necessary for the effective implementation of the Jobs-Plus Pilot initiative: Provided further, That the Secretary shall publish by notice in the Federal Register any waivers or alternative requirements pursuant to the preceding proviso no later than 10 days before the effective date of such notice. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The Budget proposes $2.07 billion for the Public Housing Capital Fund, a formula program designed to respond to the capital and management improvement requirements of Public Housing. The program preserves and enhances a valuable affordable housing resource, which serves approximately 1.1 million families with limited incomes. Of the amount requested, over $1.9 billion will fund capital grants to Public Housing Authorities (PHAs). The balance includes up to $50 million for a Jobs-Plus pilot, $15 million for public housing financial and physical assessment support, up to $20 million for emergency capital needs resulting from non-Presidentially declared emergencies and natural disasters, and up to $5 million for administrative and judicial receiverships.

The Administration proposes to combine the separate Operating Fund and Capital Fund programs into a single Public Housing subsidy stream. The current bifurcated structure presents restrictions that are difficult to implement and regulate, and underscores the isolation of Public Housing properties from mainstream real estate financing and management practices. The proposed merger will complete the transition of Public Housing to asset management, simplify the program, and reduce administrative burden on PHAs. As a first step towards consolidation, the Budget provides all PHAs with full flexibility to use their operating and capital funds for any eligible capital or operating expense. The Administration will submit authorizing legislation to consolidate the Operating Fund and Capital Fund programs in the spring of 2012.

The Budget includes up to $50 million to pilot an expansion of the successful Jobs-Plus demonstration. This pilot will provide over 30,000 Public Housing residents with job search assistance and other employment related services, financial incentives to work through changes to rent rules, and supportive services such as child care and transportation assistance. The Budget also proposes the Consolidated Opportunities for Resident Enrichment (CORE) flexibility. This proposal authorizes PHAs to combine and use a portion of their Public Housing Capital, Public Housing Operating, and Housing Choice Voucher administrative fee funds for service coordination, case management, and other supportive service activities that promote positive resident outcomes related to education, health, self-sufficiency and quality of life.

In 2013, the Department will begin implementation of the Rental Assistance Demonstration (RAD) authorized by the Consolidated and Further Continuing Appropriations Act of 2012 (P.L. 112–55). RAD provides PHAs and other owners of rental properties assisted under the Public Housing, Section 8 Moderate Rehabilitation, Rent Supplement, and Rental Assistance Payment programs the option to convert the assistance on their properties to long-term Project-Based Rental Assistance (PBRA) or Project-Based Voucher contracts. The Budget reflects a total estimated transfer of $46 million from the Capital Fund (in addition to $102 million from the Operating Fund) to the PBRA and Tenant-Based Rental Assistance accounts to support the conversion of approximately 48,000 Public Housing units in 2013.

Object Classification (in millions of dollars)

For [2012] 2013 payments to public housing agencies for the operation and management of public housing, as authorized by section 9(e) of the United States Housing Act of 1937 (42 U.S.C. 1437g(e)), [$3,961,850,000, of which $20,000,000 shall be available until September 30, 2013] $4,524,000,000: Provided, That in determining public housing agencies', including Moving to Work agencies', calendar year [2012] 2013 funding allocations under this heading, the Secretary shall take into account the impact of changes in minimum rents, flat rents, and medical expense thresholds on public housing agencies' [excess operating fund reserves, as determined by the Secretary: Provided further, That Moving to Work agencies shall receive a pro-rata reduction consistent with their peer groups: Provided further, That no public housing agency shall be left with less than $100,000 in operating reserves: Provided further, That the Secretary shall not offset excess reserves by more than $750,000,000: Provided further, That in implementing such allocation reductions, the Secretary shall establish a process by which public housing agencies can appeal the initial allocation amounts and the Secretary shall consider adjustments based on such factors, including prior funding reservations, commitments related to mixed finance developments, or reporting errors: Provided further, That the Secretary shall notify public housing agencies of such process and what documentation may be required as part of such appeal: Provided further, That following the appeals process established under the previous two provisos, the Secretary shall make final allocations: Provided further, That of the amount provided under this heading up to $20,000,000 may be set aside to provide assistance to any public housing authority who encounters financial hardship as a direct result of an excess reserve offset applied to an allocation of funding under this heading: Provided further, That the Secretary shall provide flexibility to public housing agencies to use excess operating reserves for capital improvements] formula income levels. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The Budget requests $4.524 billion for the Public Housing Operating Fund, which provides operating subsidies to Public Housing Authorities (PHAs) to assist in funding the operation and maintenance expenses of Public Housing units in accordance with Section 9(e) of the United States Housing Act of 1937.

The Budget includes three reforms to the rent structure that reduce PHAs' eligibility for operating subsidies while protecting Public Housing tenants from financial hardship. The minimum rent is increased to $75 per month, which is comparable to the minimum rent ceiling of $50 enacted in 1998 adjusted for inflation. Consistent with current policy, PHAs must exempt families facing financial hardship from payment of the minimum rent. The Budget also requires PHAs to set flat rents closer to comparable market levels by establishing a floor at 80 percent of the applicable fair market rent. PHAs will phase in flat rent increases to ensure that a family's existing rental payment does not increase by more than 35 percent per year. Finally, the Budget increases the threshold for deducting unreimbursed medical expenses from 3 percent to 10 percent of family income.

In 2013, the Department will begin implementation of the Rental Assistance Demonstration (RAD) authorized by the Consolidated and Further Continuing Appropriations Act of 2012 (P.L. 112–55). RAD provides PHAs and other owners of rental properties assisted under the Public Housing, Section 8 Moderate Rehabilitation, Rent Supplement, and Rental Assistance Payment programs the option to convert their properties to long-term Project-Based Rental Assistance (PBRA) or Project-Based Voucher contracts. The Budget reflects a total estimated transfer of $102 million from the Operating Fund (in addition to $46 million from the Capital Fund) to the PBRA and Tenant-Based Rental Assistance accounts to support the conversion of approximately 48,000 Public Housing units.

Program and Financing (in millions of dollars)

No new appropriations have been provided for the Public Housing Drug Elimination Grants program since 2001.

For competitive grants under the Choice Neighborhoods Initiative [(subject to section 24 of the United States Housing Act of 1937 (42 U.S.C. 1437v), unless otherwise specified under this heading),] for transformation, rehabilitation, and replacement housing needs of both public and HUD-assisted housing and to transform neighborhoods of poverty into functioning, sustainable mixed income neighborhoods with appropriate services, schools, public assets, transportation and access to jobs, [$120,000,000] $150,000,000, to remain available until September 30, [2014] 2015, of which the Secretary of Housing and Urban Development may use up to $5,000,000 for technical assistance and contract expertise, including training and the cost of necessary travel for participants in such training, to be provided directly or indirectly through grants, contracts or cooperative agreements by or to officials and employees of the Department and of public housing agencies and to residents: Provided, That grant funds may be used for resident and community services, community development, and affordable housing needs in the community, and for conversion of vacant or foreclosed properties to affordable housing: [Provided further, That use of funds made available under this heading shall not be deemed to be public housing notwithstanding section 3(b)(1) of such Act:] Provided further, That grantees shall commit to an additional period of affordability determined by the Secretary, but not fewer than 20 years: Provided further, That grantees shall undertake comprehensive local planning with input from residents and the community, and that grantees shall provide a match in State, local, other Federal or private funds: Provided further, That grantees may include local governments, tribal entities, public housing authorities, and nonprofits: Provided further, That for-profit developers may apply jointly with a public entity: [Provided further, That of the amount provided, not less than $80,000,000 shall be awarded to public housing authorities:] Provided further, That such grantees shall create partnerships with other local organizations including assisted housing owners, service agencies, and resident organizations: Provided further, That the Secretary shall consult with the Secretaries of Education, Labor, Transportation, Health and Human Services, Agriculture, and Commerce, the Attorney General and the Administrator of the Environmental Protection Agency to coordinate and leverage other appropriate Federal resources[: Provided further, That no more than $5,000,000 of funds made available under this heading may be provided to assist communities in developing comprehensive strategies for implementing this program or implementing other revitalization efforts in conjunction with community notice and input: Provided further, That the Secretary shall develop and publish guidelines for the use of such competitive funds, including but not limited to eligible activities, program requirements, and performance metrics]. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The Budget proposes $150 million for Choice Neighborhoods to continue the transformation of neighborhoods of poverty into functioning, sustainable, mixed-income neighborhoods with appropriate services, schools, public assets, transportation, and access to jobs. The goal of the program, a central component of the White House Neighborhood Revitalization Initiative, is to demonstrate that concentrated and coordinated neighborhood investments from multiple sources can transform a distressed neighborhood and improve the quality of life of current and future residents. The Department awarded the first-ever Choice Neighborhood grants — 17 planning grants ($4 million total) and five implementation grants ($122 million total) — in 2011, and an additional $3.6 million in planning grants was awarded in 2012.

Choice Neighborhoods implementation grants primarily fund the preservation, rehabilitation, and transformation of Public Housing and other HUD-assisted multifamily rental housing. These grants build on the successes of Public Housing transformation under HOPE VI with a broader approach to concentrated poverty. Grantees include not only public housing authorities but also local governments, non-profits and for-profit developers. Grant funds can be used for resident and community services, community development and affordable housing activities in surrounding communities, and multifamily or single family property disposition, including the conversion of these properties to affordable housing. The Budget will fund 4 to 6 implementation grants.

Grantees are required to undertake comprehensive local planning with input from residents and the community. A strong emphasis is placed on local community planning to improve schools and education programs, including early childhood initiatives. Of the amount requested, up to $5 million will fund 14 to 18 planning grants to assist local partnerships to develop strong proposals for future implementation grant competitions.

Program and Financing (in millions of dollars)

The HOPE VI program, in coordination with funding from the Public Housing Capital Fund, has accomplished its goal of contributing to the demolition of 100,000 severely distressed Public Housing units. The Budget proposes no additional funds for this program. Instead, the Budget proposes to build on the success of HOPE VI with Choice Neighborhoods. First funded in 2010, Choice Neighborhoods makes a broad range of transformative investments in high-poverty neighborhoods where Public Housing and other HUD-assisted housing is concentrated. HUD awarded the first-ever Choice Neighborhoods planning and implementation grants in 2011.

Remaining balances of HOPE VI grants will spend out over several years as redevelopment projects are completed. Cumulative results of the HOPE VI program as of September 30, 2011 are as follows: 73,949 households relocated; 96,797 units demolished; 89,413 units (new and rehabilitated) completed; and 88,112 completed units occupied.

For the Family Self-Sufficiency program to support family self-sufficiency coordinators under section 23 of the United States Housing Act of 1937, $60,000,000, to promote the development of local strategies to coordinate the use of assistance under sections 8 and 9 of such Act with public and private resources, to enable eligible families to achieve economic independence and self-sufficiency: Provided, That the Secretary may waive or specify alternative requirements (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment) for any provision of such section 23 in order to fulfill the purposes of this heading.

Program and Financing (in millions of dollars)

The Budget requests $60 million for a consolidated Family Self-Sufficiency (FSS) Program to help HUD-assisted residents achieve self-sufficiency and economic independence. The FSS program is designed to provide service coordination through community partnerships that link assisted residents with employment assistance, training, child care services, and other supportive services. The funding will be allocated through a competition to eligible Public Housing Authorities (PHAs) and eligible entities to support service coordinators. Rather than operate two separate and independently administered FSS programs for Housing Choice Voucher and Public Housing families, the Budget proposes to consolidate and align the FSS program into one program to enable PHAs to more uniformly serve both programs' residents. This proposal will also make the program available to residents of HUD's other major rental assistance program, Project-Based Rental Assistance.

In addition to the FSS program consolidation, the Budget includes flexible authorities for PHAs to combine and use a portion of their funds from the Public Housing Operating and Capital Funds, and Tenant-Based Rental Assistance administrative fees towards additional service coordination that could complement the FSS program or provide residents with other supportive services that promote positive resident outcomes related to education, health, self-sufficiency and quality of life.

For the Native American Housing Block Grants program, as authorized under title I of the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA) (25 U.S.C. 4111 et seq.), $650,000,000, to remain available until September 30, [2016] 2017: Provided, That, notwithstanding the Native American Housing Assistance and Self-Determination Act of 1996, to determine the amount of the allocation under title I of such Act for each Indian tribe, the Secretary shall apply the formula under section 302 of such Act with the need component based on single-race census data and with the need component based on multi-race census data, and the amount of the allocation for each Indian tribe shall be the greater of the two resulting allocation amounts: [Provided further, That of the amounts made available under this heading, $2,000,000 shall be contracted for assistance for national or regional organizations representing Native American housing interests for providing training and technical assistance to Indian housing authorities and tribally designated housing entities and $2,000,000 shall be to support the inspection of Indian housing units, contract expertise, training, and technical assistance in the training, oversight, and management of such Indian housing and tenant-based assistance, including up to $200,000 for related travel:] Provided further, That of the amount provided under this heading, $2,000,000 shall be made available for the cost of guaranteed notes and other obligations, as authorized by title VI of NAHASDA: Provided further, That such costs, including the costs of modifying such notes and other obligations, shall be as defined in section 502 of the Congressional Budget Act of 1974, as amended: Provided further, That these funds are available to subsidize the total principal amount of any notes and other obligations, any part of which is to be guaranteed, not to exceed [$20,000,000: Provided further, That the Department will notify grantees of their formula allocation within 60 days of enactment of this Act] $18,332,000. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars)

Title I of the Native American Housing Assistance and Self-Determination Act (NAHASDA) of 1996 (P.L. 104–330) authorized the Native American Housing Block Grant program. This program provides an allocation of funds on a formula basis to Indian tribes and their tribally designated housing entities to help them address housing needs within their communities. HUD has estimated that in fiscal year 2011, out of a population of 1.5 million American Indians and Alaska Natives in block grant formula areas, over 100 thousand households were either overcrowded or lacked adequate plumbing or kitchen facilities. According to the Senate Committee on Indian Affairs, in 2002, 90,000 Indian families were homeless or underhoused. On tribal lands, 28 percent of Indian households were found to be overcrowded or to lack adequate plumbing and kitchen facilities, compared to 5.4 percent of national households.

The Budget includes $650 million for the total activities of this program in 2013, including $2 million of subsidy for the Title VI loan guarantee program, which will guarantee $18.3 million in loans to tribes. A primary goal of the Title VI program is to encourage private lenders to provide financing in Indian Country. The program provides for the Federal guarantee of notes or other obligations issued by Indian tribes or tribally designated housing entities for the purpose of financing affordable housing activities described in section 202 of the Act.

As required by the Federal Credit Reform Act of 1990, this account records, for this program, the subsidy costs associated with the loan guarantees committed in 1998 and beyond (including modifications of guarantees that resulted from obligations in any given year), as well as administrative expenses of this program. The subsidy amounts are estimated on a present value basis; the administrative expenses are estimated on a cash basis.

For the Native Hawaiian Housing Block Grant program, as authorized under title VIII of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4111 et seq.), $13,000,000, to remain available until [expended] September 30, 2017: Provided, That of this amount, $300,000 shall be for training and technical assistance activities, including up to $100,000 for related travel by Hawaii-based HUD employees. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The Hawaiian Homelands Homeownership Act of 2000 (P.L. 106–568) amended the Native American Housing Assistance and Self-Determination Act of 1996 by adding Title VIII, which authorized the Native Hawaiian Housing Block Grant program. This program provides funds to assist and promote affordable housing activities to develop, maintain and operate affordable housing for eligible low-income Native Hawaiian families.

It authorizes annual grants to the Department of Hawaiian Home Lands (DHHL) for housing and housing-related assistance, pursuant to an annual housing plan, within the area in which DHHL is authorized to provide that assistance. DHHL uses performance measures and benchmarks that are based on the needs and priorities established in its five- and one-year housing plans. The Budget requests $13 million for this program.

The Low-Rent Public Housing Loan Fund provides direct Federal loans to fund remaining Public Housing Agency (PHA) and Indian Housing Authority (IHA) construction, acquisition, and modernization activities reserved under the Annual Contributions appropriation through 1986. These loans are made by borrowing from the Treasury. Under legislation enacted during 1986 (P.L. 99–272), amounts borrowed from the Treasury are forgiven at the end of each fiscal year and the loans to PHAs/IHAs are forgiven as construction, acquisition, and modernization activities are completed. Since 1987, new reservations of capital funds for construction, acquisition, and modernization activities have been provided directly from the Public Housing Capital Fund appropriations.

Balance Sheet (in millions of dollars)

For the cost of guaranteed loans, as authorized by section 184 of the Housing and Community Development Act of 1992 (12 U.S.C. 1715z), [$6,000,000] $7,000,000, to remain available until expended: Provided, That such costs, including the costs of modifying such loans, shall be as defined in section 502 of the Congressional Budget Act of 1974: Provided further, That these funds are available to subsidize total loan principal, any part of which is to be guaranteed, up to [$360,000,000] $900,000,000, to remain available until expended: Provided further, That up to [$750,000] $1,000,000 of this amount may be used for administrative contract expenses including management processes and systems to carry out the loan guarantee program. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars)

This program provides access to sources of private financing for Indian families, Indian tribes, and their tribally designated housing entities who otherwise could not acquire housing financing because of the unique legal status of Indian trust land. The Budget proposes $7 million to support additional loan guarantee activity and to provide managerial and systems support. The program has issued 15,006 loan guarantees totaling 2.32 billion since 1995, with 43 percent of the activity occurring in 2010 and 2011. Even through the national foreclosure crisis, the program has maintained a claims rate of less than one percent. In 2013, this program is projected to grow by 25 percent, representing almost 5,300 loans to American Indian borrowers. To support this increase in demand, the Budget proposes giving HUD increased flexibility to raise fees within this program to ensure the necessary resources are available. For 2013, HUD proposes using this authority to raise the upfront fee 50 basis points to 1.5 percent, allowing it to subsidize up to $900 million in Indian housing loans.

As required by the Federal Credit Reform Act of 1990, this account records, for this program, the subsidy costs associated with the loan guarantees committed in 1992 and beyond (including modifications of guarantees that resulted from obligations in any year). The subsidy amounts are estimated on a net present value basis. The administrative expenses are shown on a cash basis.

Object Classification (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, this non-budgetary account records all cash flows to and from the Government resulting from the loan guarantees committed in 1992 and beyond (including modifications of loan guarantees that resulted from obligations in any year). The amounts in this account are a means of financing and are not included in the budget totals. As required by the Federal Credit Reform Act of 1990, no administrative expenses can be recorded in the financing account.

Balance Sheet (in millions of dollars)

For the cost of guaranteed loans, as authorized by section 184A of the Housing and Community Development Act of 1992 (12 U.S.C. 1715z) and for such costs for loans used for refinancing, [$386,000] $1,000,000, to remain available until expended: Provided, That such costs, including the costs of modifying such loans, shall be as defined in section 502 of the Congressional Budget Act of 1974: Provided further, That these funds are available to subsidize total loan principal, any part of which is to be guaranteed, [not to exceed $41,504,000] up to $107,000,000, to remain available until expended. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars)

This program provides access to sources of private financing to eligible Native Hawaiian families who reside on the Hawaiian Home Lands and who otherwise could not acquire private financing because of the unique legal status of the Hawaiian Home Lands. The Budget provides $1 million in subsidy to support additional loan guarantee activity for Native Hawaiian homeownership.

As required by the Federal Credit Reform Act of 1990, this account records, for this program, the subsidy costs associated with the loan guarantees committed in 2001 and beyond (including modifications of guarantees that resulted from obligations in any year). The subsidy amounts are estimated on a net present value basis. The administrative expenses are shown on a cash basis.

Program and Financing (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, this non-budgetary account records all cash flows to and from the government resulting from the loan guarantees committed in 2001 and beyond (including modifications of loan guarantees that resulted from obligations in any year). The amounts in this account are a means of financing and are not included in the budget totals. As required by the Federal Credit Reform Act of 1990, no administrative expenses can be recorded in the financing account.

Balance Sheet (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, this non-budgetary account records all cash flows to and from the Government resulting from loan guarantees committed in 1992 and beyond (including modifications of loan guarantees that resulted from commitments in any year). The amounts in this account are a means of financing and are not included in the budget totals. As required by the Federal Credit Reform Act of 1990, no administrative expenses can be recorded in the financing account.

Balance Sheet (in millions of dollars)

Federal Funds

For carrying out the Housing Opportunities for Persons with AIDS program, as authorized by the AIDS Housing Opportunity Act (42 U.S.C. 12901 et seq.), [$332,000,000] $330,000,000, to remain available until September 30, [2013] 2014, except that amounts allocated pursuant to section 854(c)(3) of such Act shall remain available until September 30, [2014] 2015: Provided, That the Secretary shall renew all expiring contracts for permanent supportive housing that were funded under section 854(c)(3) of such Act that meet all program requirements before awarding funds for new contracts and activities authorized under this section[: Provided further, That the Department shall notify grantees of their formula allocation within 60 days of enactment of this Act]. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The Housing Opportunities for Persons with AIDS (HOPWA) program is the only Federal program dedicated to address the urgent housing needs of low-income Americans living with HIV and AIDS. HOPWA funding provides States and localities with resources and incentives to devise long-term comprehensive strategies for planning and providing housing and supportive services to meet the complex, multiple needs of persons living with HIV and AIDS and their families. HOPWA funds have been demonstrated to help reduce the risk of homelessness, increase housing stability, and improve access to HIV care and health outcomes for program participants.

Ninety percent of HOPWA funds are distributed to States and eligible metropolitan areas according to a formula, which is based on the number of AIDS cases in the jurisdiction. The remaining ten percent is awarded competitively to States, local governments, and private nonprofit entities for projects of national significance and for projects in non-formula areas. However, the HOPWA formula does not reflect the current nature and distribution of the epidemic. To modernize the HOPWA program, the Administration is proposing an updated formula based on living cases of HIV and adjusted for an area's fair market rent and poverty rates, focusing HOPWA funds on areas that have the most need. The proposal will also include several changes that will allow better targeting of HOPWA resources and more flexibility for grantees to provide the most cost-effective, timely interventions. These changes, which will be proposed in separate legislation, will improve the nation's response to the specialized housing needs of HIV/AIDS patients and will further the Administration's National HIV/AIDS Strategy.

The Budget provides $330 million for this program in 2013 which will support housing stability among this vulnerable population.

For assistance to units of State and local government, and to other entities, for economic and community development activities, and for other purposes, [$3,308,090,000] $3,143,090,000, to remain available until September 30, [2014] 2015, unless otherwise specified: Provided, That of the total amount provided, [not less than] $2,948,090,000 is for carrying out the community development block grant program under title I of the Housing and Community Development Act of 1974, as amended (the "Act'' herein) (42 U.S.C. 5301 et seq.): Provided further, That unless explicitly provided for under this heading, not to exceed 20 percent of any grant made with funds appropriated under this heading shall be expended for planning and management development and administration: Provided further, That $60,000,000 shall be for grants to Indian tribes notwithstanding section 106(a)(1) of such Act, of which, notwithstanding any other provision of law (including section 204 of this Act), up to $3,960,000 may be used for emergencies that constitute imminent threats to health and safety[: Provided further, That none of the funds made available under this heading may be used for grants for the Economic Development Initiative ("EDI'') or Neighborhood Initiatives activities, Rural Innovation Fund, or for grants pursuant to section 107 of the Housing and Community Development Act of 1974 (42 U.S.C. 5307): Provided further, That the Department shall notify grantees of their formula allocation within 60 days of enactment of this Act].

Of the amounts made available under this heading, $100,000,000 shall be made available for a Sustainable Housing and Communities Initiative to improve planning efforts that integrate housing and transportation decisions, and increase the capacity to align economic development, infrastructure planning and land use practices: Provided, That $46,000,000 shall be for Regional Integrated Planning Grants to support the linking of transportation and land use planning: Provided further, That $46,000,000 shall be for Community Challenge Planning Grants to foster reform and reduce barriers to achieve affordable, economically vital, and sustainable communities: Provided further, That the Secretary will consult with the Secretary of Transportation in evaluating grant proposals awarded under this paragraph: Provided further, That $8,000,000 shall be for a joint Department of Housing and Urban Development and Department of Transportation research effort that shall include a rigorous evaluation of the Regional Integrated Planning Grants and Community Challenge Planning Grants programs, as well as to provide funding for a clearinghouse and capacity building efforts: Provided further, That of the amount provided in the previous proviso, up to $3,000,000 is available to develop an energy modeling tool for the Department and provide additional technical support to achieve energy efficiency and green building goals in the HUD-assisted portfolio.

Of the amounts made available under this heading, $35,000,000 shall be made available for the second, third, and fourth capacity building activities authorized under section 4(a) of the HUD Demonstration Act of 1993 (42 USC 9816 note), of which not less than $5,000,000 may be made available for rural capacity building activities. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The Community Development Fund account includes the Community Development Block Grant (CDBG), Sustainable Communities Initiative, and the Capacity Building program. This account also includes funding for the Indian Community Development Program.

In 2013, the Administration will continue to improve coordination and integration between community and economic development programs administered by the Department of Housing and Urban Development (HUD). Activities funded by the Sustainable Communities Initiative and the Capacity Building program will better align and reinforce community-based efforts in partnership and concert with CDBG formula grantees to achieve similar community development goals.

The Budget funds the CDBG formula grant program at $2.9 billion to assist State and local governments address local priorities and needs. The CDBG program provides over 1,200 flexible annual formula grants to States, local governments, and Insular Areas to benefit mainly low- to moderate-income persons. The funding is used for a wide range of community and economic development activities, such as public infrastructure improvements, housing rehabilitation and construction, job creation and retention, and public services (e.g., child care). Seventy percent of the CDBG formula grants are distributed to mainly urban areas (entitlement communities), and 30 percent is distributed to the States (non-entitlement communities). Preserving this funding level reflects the Administration's commitment to assist State and local governments during challenging fiscal conditions. The Administration will work with State and local governments to better leverage CDBG formula funds to make progress on projects focused on economic growth. For example, the Administration will work with grantees to complement CDBG formula funds with other Federal investments, such as Sustainable Communities, Capacity Building, and Neighborhood Revitalization initiatives to help stabilize and revitalize local economies.

The Budget requests $100 million for the Sustainable Communities Initiative. In partnership with the Department of Transportation (DOT) and the Environmental Protection Agency (EPA), the Sustainable Communities Initiative aims to expand job opportunities and improve the quality of life for families by providing incentives to regions and communities to innovate and develop comprehensive housing and transportation plans that result in sustainable development, reduced greenhouse gases and increased transit-accessible housing. The Budget provides $46 million each for Sustainable Regional Planning Grants and Community Challenge Grants to support regional and local planning efforts that further the goals of the initiative. This initiative complements DOT's funding to strengthen state and local infrastructure capacity and EPA's technical assistance.

The 2013 Budget also includes $35 million for the Capacity Building program, which is authorized by Section 4 of the HUD Demonstration Act of 1993. The Capacity Building program provides grants to national intermediaries to develop, enhance, and strengthen the technical and administrative capabilities of community development corporations to carry out community development and affordable housing activities for low- and moderate-income persons that support and address local needs and priorities. The program requires grantees to provide a required match of three dollars from private sources.

The Indian Community Development program continues to be funded at $60 million. This program provides eligible grantees with direct grants for use in developing viable Indian and Alaska Native Communities, including decent housing, a suitable living environment, and economic opportunities, primarily for low- and moderate-income persons.

This account also reflects prior year CDBG disaster supplemental spending, the 2009 American Recovery and Reinvestment Act funding of $1 billion in CDBG formula grants, and $2 billion for Neighborhood Stabilization Program (NSP) II competitive grants. The NSP grants are for emergency assistance for the redevelopment of abandoned and foreclosed homes. Both the $3.92 billion NSP funding from the Housing and Economic Recovery Act of 2008 and the $1 billion from the Dodd-Frank Wall Street Financial Reform and Consumer Protection Act are mandatory appropriations and are reflected in a separate account.

Program and Financing (in millions of dollars)

No new appropriation is requested for the Empowerment Zone (EZ) and Renewal Community (RC) programs in the 2013 Budget. The tax incentives for RCs expired on December 31, 2009, while EZ tax incentives expired December 31, 2011. The President's Budget proposes to extend the EZ tax incentives through December 2013.

Program and Financing (in millions of dollars)

The 2013 Budget requests no funding for the Brownfields Economic Development Initiative (BEDI) program. BEDI is a competitive grant program designed to assist cities with the redevelopment of brownfield sites for the purposes of economic development and job creation. Brownfields are abandoned, idled, and underused industrial and commercial facilities and land where expansion and redevelopment is burdened by real or potential environmental contamination. The program is relatively small and local governments have access to other public and private funds, including the larger Community Development Block Grant (CDBG), which can serve similar purposes.

For the HOME investment partnerships program, as authorized under title II of the Cranston-Gonzalez National Affordable Housing Act, as amended, $1,000,000,000, to remain available until September 30, [2014] 2015: Provided, That notwithstanding the amount made available under this heading, the threshold reduction requirements in sections 216(10) and 217(b)(4) of such Act shall not apply to allocation of such amount[: Provided further, That funds made available under this heading used for projects not completed within 4 years of the commitment date, as determined by a signature of each party to the agreement shall be repaid: Provided further, That the Secretary may extend the deadline for 1 year if the Secretary determines that the failure to complete the project is beyond the control of the participating jurisdiction: Provided further, That no funds provided under this heading may be committed to any project included as part of a participating jurisdiction's plan under section 105(b), unless each participating jurisdiction certifies that it has conducted an underwriting review, assessed developer capacity and fiscal soundness, and examined neighborhood market conditions to ensure adequate need for each project: Provided further, That any homeownership units funded under this heading which cannot be sold to an eligible homeowner within 6 months of project completion shall be rented to an eligible tenant: Provided further, That no funds provided under this heading may be awarded for development activities to a community housing development organization that cannot demonstrate that it has staff with demonstrated development experience: Provided further, That funds provided in prior appropriations Acts for technical assistance, that were made available for Community Housing Development Organizations technical assistance, and that still remain available, may be used for HOME technical assistance notwithstanding the purposes for which such amounts were appropriated: Provided further, That the Department shall notify grantees of their formula allocation within 60 days of enactment of this Act]. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The HOME Investment Partnerships Program is authorized by the National Affordable Housing Act (P.L. 101–625), as amended. This program provides flexible annual formula grant assistance to States and units of local government to increase the supply of affordable housing and expand homeownership for low- to very-low income persons. Sixty percent of the formula grant funds is awarded to participating local governments and 40 percent is awarded to states. These communities often use the funds in partnership with local non-profit organizations to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income people. Projects funded by HOME often leverage private dollars and are used in conjunction with the Low-Income Housing Tax Credit (LIHTC), Community Development Block Grant, and local funds. For example, 53 percent of almost 150,000 completed HOME assisted rental units were part of awarded LIHTC projects from 2007–2011. The Budget requests $1 billion for the HOME Investment Partnerships Program and does not provide separate funding for the Self-Help Homeownership Opportunity Program (SHOP), as all SHOP activities are eligible under the HOME program.

Over time, the funding provided in the 2013 Budget is estimated to result in the production of almost 43,387 units of affordable housing through new construction, rehabilitation, and/or acquisition. It is also estimated that communities will use a portion of their funding to support tenant-based rental assistance for over 10,550 units.

The 2013 Budget also proposes statutory changes that would allow recaptured Community Housing Development Organization funds to be reallocated by formula, and facilitate eviction of HOME rental unit tenants who pose an imminent threat.

This account also reflects a $2.25 billion special allocation of HOME funds provided under the American Recovery and Reinvestment Act of 2009 (P.L. 111–5), called the Tax Credit Assistance Program (TCAP). By the end of 2013, TCAP is expected to have accelerated the production and preservation of over 60,000 units of affordable housing that received an award of Low-Income Housing Tax Credits. 17,763 TCAP units have already been completed, with a projected estimate of 40,000 completed units by the end of 2012.

Program and Financing (in millions of dollars)

The Housing Trust Fund was originally authorized in the Housing and Economic Recovery Act of 2008 (Pub. L. 110–289) under section 1338 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 et seq.) with a dedicated funding stream from assessments on Fannie Mae and Freddie Mac. However, the Federal Housing Finance Agency has indefinitely suspended these assessments. The Budget proposes to fund the Housing Trust Fund through legislation directing $1 billion to capitalize the fund.

The purpose of the Housing Trust Fund is to provide grants to States to increase and preserve the supply of affordable rental housing and homeownership opportunities for extremely low- and very low-income families, and help address the growing shortage of affordable housing for these families. This program is similar to HOME, but is more income-targeted. The funding will be distributed by formula to States or State-designated entities that will target resources to areas with substantial needs. The funding will be used for production, preservation, and rehabilitation of affordable rental housing and for production, preservation, and rehabilitation of housing for homeownership (limited to 10 percent of the funding). Of the total amounts made available, not less than 75 percent shall be used to benefit extremely low-income households, for whom the shortage of affordable housing is most acute. Over time, the funding provided for the Housing Trust Fund in 2013 is expected to produce approximately 36,000 affordable units.

[For the Self-Help and Assisted Homeownership Opportunity Program, as authorized under section 11 of the Housing Opportunity Program Extension Act of 1996, as amended, $53,500,000, to remain available until September 30, 2014: Provided, That of the total amount provided under this heading, $13,500,000 shall be made available to the Self-Help and Assisted Homeownership Opportunity Program as authorized under section 11 of the Housing Opportunity Program Extension Act of 1996, as amended: Provided further, That $35,000,000 shall be made available for the second, third and fourth capacity building activities authorized under section 4(a) of the HUD Demonstration Act of 1993 (42 U.S.C. 9816 note), of which not less than $5,000,000 may be made available for rural capacity-building activities: Provided further, That $5,000,000 shall be made available for capacity-building activities for national organizations with expertise in rural housing, including experience working with rural housing organizations, local governments, and Indian tribes.] (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)

The 2013 Budget requests no appropriations for the Self-Help and Assisted Homeownership Opportunity Program (SHOP). Activities under the Capacity Building for Community Development and Affordable Housing Program are requested separately under the Community Development Fund account.

SHOP is authorized by Section 11 of the Housing Opportunity Program Extension Act of 1996, and provides funds to increase the ability of non-profit organizations to leverage funds from other sources to assist low-income homebuyers willing to contribute "sweat equity" toward the construction of their houses. The Administration plans to encourage State and local government grantees of the larger HOME Investment Partnerships Program to fund SHOP projects, as the HOME statute includes the same eligible activities.

Program and Financing (in millions of dollars)

Summary of Budget Authority and Outlays (in millions of dollars)

The Neighborhood Stabilization Program (NSP) was authorized by the Housing and Economic Recovery Act of 2008 (HERA) and funded at $3.92 billion. In response to the foreclosure crisis, HERA directed HUD to develop a formula to distribute the funds to State and local governments with the greatest need. To determine the areas with the greatest need, the allocation formula had to be based on home foreclosures, subprime loans, and mortgage defaults or delinquencies. Grantees may use NSP funds for a number of eligible activities, including establishing financing mechanisms; purchasing and rehabilitating abandoned or foreclosed properties; establishing land banks; demolishing blighted structures; and redeveloping vacant or demolished property. NSP grantees must use at least 25 percent of the funds appropriated for the purchase and redevelopment of abandoned or foreclosed residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of the area median income. In addition, all activities funded by NSP must benefit low- and moderate-income persons whose income does not exceed 120 percent of area median income.

In September 2008, HUD announced direct NSP allocations to 309 jurisdictions, including all 50 states, Puerto Rico and the Insular Areas. Pursuant to HERA, grantees had 18 months from the date funds were made available to obligate the funds. By September 30, 2010, grantees obligated 99.7 percent of their funds. As of January 2012, grantees had expended more than 83 percent of this first round of NSP funding (NSP1).

The American Recovery and Reinvestment Act of 2009 (ARRA) made several changes to the NSP program as enacted by HERA and appropriated an additional $2 billion in funding for the NSP program. The ARRA funding for the second round of NSP funding (NSP2) is reflected within the Community Development Fund account. In January 2010, HUD announced 56 awards under the NSP2 program and all funds were obligated on February 11, 2010. NSP2 grantees have until February 11, 2012, to expend 50 percent of their grant funds and must expend 100 percent by February 11, 2013. As of January 2012, grantees had expended more than 45 percent of NSP2 funding.

The Dodd-Frank Financial Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) appropriated an additional $1 billion for a third iteration of NSP (NSP3) in July 2010. The Department announced a formula allocation of these funds to 283 entities consisting of State and local governments in September 2010. Grantees submitted their plans for using the NSP3 funds by March 2011 and, from the date HUD made the funds available, grantees will have two years to expend 50 percent of the grant and three years to expend 100 percent.

As part of the American Jobs Act announced by President Obama on September 8, 2011, the Administration is proposing $15 billion for Project Rebuild which would build upon the success of the Neighborhood Stabilization Program and expand opportunities for grantees to address abandoned and foreclosed commercial properties for redevelopment purposes. Of the requested $15 billion for Project Rebuild, $10 billion is for a formula allocation to State and local governments while $5 billion is reserved for competitive distribution to governmental entities as well as non-profit and for-profit entities.

Program and Financing (in millions of dollars)

For the emergency solutions grants program as authorized under subtitle B of title IV of the McKinney-Vento Homeless Assistance Act, as amended; the continuum of care program as authorized under subtitle C of title IV of such Act; and the rural housing stability assistance program as authorized under subtitle D of title IV of such Act, [$1,901,190,000] $2,231,000,000, of which [$1,896,190,000] $2,226,000,000 shall remain available until September 30, [2014] 2015, and of which $5,000,000 shall remain available until expended for project-based rental assistance with rehabilitation projects with 10-year grant terms and any rental assistance amounts that are recaptured under such continuum of care program shall remain available until expended: Provided, That not less than [$250,000,000] $286,000,000 of the funds appropriated under this heading shall be available for such emergency solutions grants program: Provided further, That not less than [$1,593,000,000] $1,937,000,000 of the funds appropriated under this heading shall be available for such continuum of care and rural housing stability assistance programs: Provided further, That up to [$7,000,000] $8,000,000 of the funds appropriated under this heading shall be available for the national homeless data analysis project: Provided further, That all funds awarded for supportive services under the continuum of care program and the rural housing stability assistance program shall be matched by not less than 25 percent in cash or in kind by each grantee: Provided further, That for all match requirements applicable to funds made available under this heading for this fiscal year and prior years, a grantee may use (or could have used) as a source of match funds other funds administered by the Secretary and other Federal agencies unless there is (or was) a specific statutory prohibition on any such use of any such funds: Provided further, That the Secretary shall renew on an annual basis expiring contracts or amendments to contracts funded under the continuum of care program if the program is determined to be needed under the applicable continuum of care and meets appropriate program requirements and financial standards, as determined by the Secretary: Provided further, That all awards of assistance under this heading shall be required to coordinate and integrate homeless programs with other mainstream health, social services, and employment programs for which homeless populations may be eligible, including Medicaid, State Children's Health Insurance Program, Temporary Assistance for Needy Families, Food Stamps, and services funding through the Mental Health and Substance Abuse Block Grant, Workforce Investment Act, and the Welfare-to-Work grant program: Provided further, That all balances for Shelter Plus Care renewals previously funded from the Shelter Plus Care Renewal account and transferred to this account shall be available, if recaptured, for continuum of care renewals in fiscal year [2012: Provided further, That the Department shall notify grantees of their formula allocation from amounts allocated (which may represent initial or final amounts allocated) for the emergency solutions grant program within 60 days of enactment of this Act] 2013. (Department of Housing and Urban Development Appropriations Act, 2012.)

Program and Financing (in millions of dollars)