FHA Revenues To Expand Affordable Housing
On Monday, March 6, the accounting firm of Deloitte & Touche released a report which found the Federal Housing Administration (FHA) Insurance Fund for FY99 more than $5 billion above what had been previously estimated. Two days later, March 8, President Clinton sent a directive to Housing and Urban Development (HUD) Secretary Andrew Cuomo, OMB Director Jack Lew and Domestic Policy Director Bruce Reed requesting “recommendations on how newly available funds can be used to further strengthen federal housing programs and develop a plan to enhance comprehensive affordable housing opportunities.”
President Clinton said in the directive: “As you know, my Budget for Fiscal Year 2001 substantially expands our efforts to provide affordable housing. The Budget provides a total of $32 billion – $6 billion more than last year – with increases for all of HUD’s core programs. And as the improved administration of HUD and the FHA make available additional resources, we will have the opportunity to do even more to ensure that all Americans have access to affordable housing. Therefore, I direct you to report to me within 160 days your recommendations on how newly available funds can be used to further strengthen Federal housing programs and develop a plan to enhance comprehensive affordable housing opportunities.”
A HUD press release said that the
“recommendations could include subsidizing the construction of new affordable
rental housing, downpayment assistance programs to increase homeownership,
funding for new rental assistance vouchers, and other initiatives.”
At a news conference on March 8, Secretary Cuomo was joined by Representative John LaFalce (NY), Buffalo Mayor Anthony M. Masiello, Christopher J. Sumner , President of the National Mortgage Bankers Association of America, Robert Mitchell, President of the National Association of Home Builders and Sheila Crowley and Cushing Dolbeare of the National Low-Income Housing Coalition – all to express support for using the additional FHA resources for affordable housing.
The Deloitte & Touche report found that the FHA insurance fund has a record economic value of $16.6 billion, an increase of $5.3 billion over 1998, which is a large turn around from 1990, when the economic value of FHA was a negative $2.7 billion. But with improved management, FHA will now generate additional funds between the years 2002 and 2006 that can be used for affordable housing programs.
When the report was released on
March 6, the Conference of Mayors joined other organizations in signing a letter
to Members of Congress urging them to pledge support for preserving and
protecting FHA as an agency within HUD. Conference of Mayors Executive Director
J. Thomas Cochran said of the audit report: “Mayors across the nation will be
very pleased to learn that FHA’s Mutual Mortgage Insurance (MMI) Fund is in
such good financial health. FHA plays such a critical role in expanding housing
opportunities for minority and first-time home buyers in cities. The
announcement of MMI’s favorable actuarial report will signal to Mayors that
they will continue to have a strong ally in Washington working with them..”
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