Human Services News

Center on Budget and Policy Priorities:

This week, Congress approved an omnibus funding bill for FY 2008 that included funding for HUD affordable housing and community development programs.

Here is a preliminary assessment of the HUD provisions of H.R. 2764, the "omnibus" appropriations act for FY 2008, which includes funding for programs administered by HUD and every other federal agency outside of Defense.

Additional funding reductions were made in the two largest housing block grant programs, HOME and the Community Development Block Grant program, and in the HOPE VI program, in comparison to the original conference bill.

Like the conference bill, the omnibus bases most agencies' 2008 renewal funding on their actual leasing and costs during federal fiscal year 2007 (with adjustments for costs associated with the Family Self Sufficiency program, new tenant-protection vouchers, and commitments of project-based vouchers).

Generally, this policy appears to reflect an underlying judgment that it is better to reduce large, unusable voucher funding reserve balances --- and thereby to retain funding for voucher renewals, the first incremental vouchers in six years, and key investments in public housing, project-based Section 8 renewals, and other HUD programs --- than to enable agencies to maintain these balances for possible use in future years.

Under the new bill language, if an agency has balances of unused funds from prior years that it could not use in 2008 to lease additional authorized vouchers (because the agency's renewal funding allocation plus available reserve funds would exceed the amount needed to lease 100 percent of its authorized vouchers), then its 2008 renewal funding will be reduced by an amount equal to such "unusable" reserve funds that exceed 7 percent of its 2007 renewal funding allocation.