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House Financial Services hearing on HUD budget proposal

by Sarah Jawaid, National Housing Conference

HUD’s five assistant secretaries appeared before the Insurance, Housing and Community Opportunity subcommittee of the House Financial services committee today for a hearing, Oversight of the Department of Housing and Urban Development. Testimony included: Carol Galante, Acting Federal Housing Administration Commissioner and Assistant Secretary for Housing; Sandra B. Henriquez, Assistant Secretary, Office of Public and Indian Housing; Mercedes M. Márquez, Assistant Secretary, Community Planning and Development; Raphael Bostic, Assistant Secretary for Policy Development and Research; John Trasviña, Assistant Secretary for Fair Housing and Equal Opportunity.

The five secretaries were asked to discuss the President’s FY13 budget and answer questions. Questions from Rep. Miller (R-CA) and Rep. Dold (R-IL) focused on FHA’s constrained regulations that make it difficult to finance condos. Galante said there would be a proposed rule coming out regarding this. Democrat members focused on the negative consequences of cuts to CDBG and HOME. Rep. Waters (D-CA) brought up project-based Section 8 cuts by asking why HUD is short-funding rental assistance contracts and shifting remaining contract renewal expenses to FY2014.

Waters said the Bush administration tried similar strategies which led to “late payments for owners, increased costs, errors in forecasting expenditures, and still required $2 billion to fill in the back end of the contracts.” She went on to say the administration’s proposal says “the program in 2014 would still need the additional $1.1 billion so this program doesn’t really save any money.” Galante responded saying that this one of the more difficult decisions HUD had to make but made sure that owners will get paid during the fiscal year and tenants will not be negatively impacted. She added that this administration differs from the Bush administration’s strategy of short-funding because of added transparency and planning. Galante added that HUD would be saving money during the fiscal year and that contract payments that go beyond the fiscal year can be funded by the FY14 appropriations process.

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