Millennial Housing Commission

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Millennial Housing Commission
Millennial Housing Commission

• Federal Housing Assistance

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Forms of Federal Housing Assistance

• Direct Assistance
• Block Grants
• Categorical Funding
• Tax Expenditures
• Direct Loans and Loan Guarantees

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Others Forms of Federal Support and Intervention

• Government Sponsored Enterprises (GSEs)
• Regulation of Financial Institutions
• Fair Housing
• Consumer Protection and Disclosure

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Eligibility for Housing Assistance

• Income eligibilityGross annual household income
  defined as percentage of area median income
  (AMI).
• Rent CalculationBased on adjusted gross annual
  income. Income includes pre-tax income, periodic
  payments (insurance, alimony, etc), or payment in
  lieu of earnings.
• Income adjustments include a dependent
  allowance, elderly or disabled deduction, as well
  as child care and medical expense allowances.

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Cost Burdens Fall Heavily on Those With Lowest
Incomes (1999)
Notes Occupied units includes no cash renters
Severe Cost Burden defined as households paying
more than 50 of income for housing cost ELI
defined lt30 of Area Median Income (AMI), VLI
defined as 30-50 of AMI LI defined as 50-80 of
AMI MI defined as 80-120 of AMI. Share
spending 50 defined as households paying more
than 50 of income for monthly housing costs
Share spending 30-49.9 defined as households
paying 30-49.9 of monthly income for housing
costs. Subsidy defined by the AHS. Source See
Table 1
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Existing Affordable Rental Housing Mismatch(1999)
Notes Vacant and occupied units Demand defined
as number of households that fall under AMI
cutoffs supply defined as number of units priced
at under 30 of Income. Source See Table 2
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The Nations Directly Subsidized Housing
Note Units and households under assistance net
of housing tax expenditures and block grant
funded units without other subsidies. Owner
Assistance includes Section 235 and Section 502
direct loans.
Source See Table 3
8
The Nations Direct Rental Subsidies
Public Housing 1,274,000
Tenant-Based 1,581,000
Total Rental Assistance 4,820,000
Private Project-Based 1,965,000
Source See Table 4
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The Nations Direct Rental Project Subsidies
Total Direct PBA units1,965,000
Source See Table 5
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New vs. Existing Rental Commitments
Source See Table 6
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Condition of Assisted Housing Stock
Average Per Unit Un-Funded Backlog of Physical
Needs
Un-funded Backlog (In Millions)
540.3
1,255
2,858
24,600
In 1998 dollars
Source See Table 7
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Beneficiary CharacteristicsIncome
Household Income by Program
Source See Table 8
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Beneficiary CharacteristicsFamilies with Children
Source See Table 9
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Project Locations
Source See Table 10
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Incidence of Poverty and Project Location
Distribution of Units by Area Poverty Rate
Source See Table 11
16
GAO Program Cost Estimates
Voucher costs adjusted to account for program
location and average bedroom size.
Source See Table 12
17
Block Grants-CDBG

• Now assists approximately 185,000 incremental
  housing units annually. Most for rehab. with 6.1
  for homeownership assistance and 7 for new
  construction.
• Since 1975 about 28 of CDBG funds have gone to
  housing.
• In FY2001, about 35 of CDBG funding went to
  housing.

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Block Grants-HOME

• Since 1990 about 650,000 housing units have been
  acquired, rehabbed or newly built and about
  78,000 tenants have received rental assistance.
• About 55 of funds have gone to rental of which
  46.3 was for new construction and 48.6 was for
  acquisition and rehab.
• The remaining 45 of funds went to homeowner and
  homebuyer assistance.

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Low-Income Housing Tax Credit

• GAO estimates 752,000 LIHTC units were produced.
• NCSHA estimates about 67 of allocated Tax
  Credit units receive other subsidies.

Source See Table 13
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Private Activity Bond Housing Programs

• Mortgage Revenue Bonds (MRBs)
• Assisted over 2 million households through 2000.
  
• Annual originations now average over 100,000
  loans.
• Multifamily Bonds
• Funded about 780,00 units through 2000.
• Annual originations now average 48,000 units
  with an average value of 2.7 billion.

Source See Table 14
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Tax Expenditures
Exclusion of Bond Int. for Owners-0.8
Low Income Housing Tax Credit-3.2
Depreciation of rental housing-5.2
Exclusion of Bond Int. for Rentals-0.2
Exception from passive loss rules-4.8
Deferral of Income from installment sales-1.0
In billions
FY 2001 Housing Tax Expenditures 121.2
Exclusion of Capital Gains-19.1
Mortgage Interest Deduction-64.5
Real Estate Tax Deduction-22.4
Source See Table 15
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FHA-Single Family Insured Loans
Number of Loans Originated
Source See Table 16
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FHA-Multi-Family Insured Loans
Number Units Originated
Source See Table 17
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Veterans Loan Guarantees
Number of Loans Originated
Source See Table 18
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RHS Single-Family Loan Guarantees
Number of Loans Originated
Source See Table 19
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Federal Housing Assistance-FY 2001
Source See Tables 15, 21, and 22.
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Federal Housing Spending
Spending for Housing, 1976-2006
In Billions of 2001 dollars
Source See Table 20
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HUD Budget Outlays-FY 2001
Other--2,061
HOME--1,734
Section 8-16,579
CDBG--4,826
In millions
Total Program Outlays (FY2001) 33,649
Public Housing-7,435
Special Pop.--1,014
Source See Table 21
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RHS Budget Outlays-FY 2001
S. 515--59
Other--24
S. 502 (Direct) 147
S. 521--634
S. 502 (Guarantee) 186
In millions
Total FY 2001 Program Outlays 1,052
S. 538--2
Source See Table 22
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Budget Process

• Discretionary spending is capped and budget
  authority annually appropriated
• Budget authority to cover long-term costs of
  credit programs must be appropriated upfront
• OMB estimates long term costs of credit programs
• Subsidy rate is expressed as a share of loan
  volume
• Positive subsidy rate programs constrained by
  budget authority
• Negative subsidy rate programs constrained by
  enacted loan volume limits

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Budget Process

• Program changes that add to collections allow
  equivalent spending increases elsewhere
• Tax expenditures and cuts are capped
• Revenue loss estimates must be included in budget
• Fannie Mae, Freddie Mac, and FHLB system are
  outside the federal budget system

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Housing Budget Issues

• Funding expiring S. 8 long-term contracts
  budget authority from 4.2 billion to 5.4
  billion by 2005approx 800k expired headed to
  approx 900k
• Switching from 15-20 year commitments to 1-year
  and some to 5-year renewal subject to
  availability of the funds
• FHA not a dedicated trust fundcannot reinvest
  receipts or get a lock on program changes that
  raise revenue
• Subsidy rate assumptions and fund structures
• Exit tax expenditure assumptions

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Subsidy Rates and Loan Volume
Source FY 2003 Federal Credit Supplement,
Congressional Budget Office, April 2002.
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Additional Information

• This information as well as additional baseline
  information is available on the Commissions
  website (www.mhc.gov)