News Updates

Obama Administration Releases FY 2011 Budget Proposal
On February 1, President Obama released the FY 2011 budget. The administration's recommendations include funding levels for housing and community development programs. The budget proposes $48 billion in discretionary funding for HUD - $1.5 billion (or 3 percent) more than the FY 2010 spending levels. If enacted, the budget would also include:

• $19.5 billion for Section 8 housing choice vouchers
• $9.3 billion for the Section 8 project-based rental assistance program
• $6.9 billion for public housing capital and operating funds
• $274 million for Housing for the Elderly (Section 202) and $90 million for Housing for People with Disabilities (Section 811)
• $60 million for capacity-building assistance
• $250 million for the Choice Neighborhoods Initiative, replacing HOPE VI
• $350 million for a new Transforming Rental Assistance program to allow public housing authorities and private owners to convert the funding for their housing units to project-based assistance for approximately 300,000 units of public and assisted housing. The new arrangements would include a tenant mobility component.

In addition to HUD programs, the president’s budget requests:

• $250 million for programs administered by the Treasury’s Community Development Financial Institutions Fund
• $75 million to subsidize $1.2 billion in Section 502 Single Family Direct Loans
• $173 million to subsidize $12 billion in Section 502 Unsubsidized Loan Guarantees
• $32 million to subsidize $95 million in Section 515 Rural Rental Housing Direct Loans
  

Funding reductions in some programs (and smaller increases in most others) reflect the increasing concern for the federal deficit that was a focal point of both President Obama’s State of the Union Address (transcript) and the Republican response (transcript) by Virginia Gov. Robert McDonnell. As the administration announced prior to the address, the FY 2011 budget freezes overall non-defense/homeland security domestic discretionary spending at FY 2010 levels ($447 billion). According to an article in The Washington Post, this affects one-eighth of the nation’s $3.5 trillion budget, and would reduce the $1 trillion-plus projected deficit by approximately $15 billion. Tax programs, such as the Low-Income Housing Tax Credit and New Markets Tax Credit, are unaffected by the spending freeze.

For more information on the administration’s proposals, including a detailed summary and budget chart, see Enterprise’s Budget and Appropriations webpage.

Vice President Biden Attends Opening of Enterprise-Supported Development, Announces Continued Support for Gulf Coast Recovery Efforts
Vice President Joe Biden attended the grand opening of the Grand Lake Elderly Apartments in Cameron Parish, La., on January 15, where he announced the Obama administration’s new plans to support the ongoing hurricane recovery efforts along the Gulf Coast.

Grand Lake Elderly Apartments, financed with Gulf Opportunity Zone (GO Zone) Low-Income Housing Tax Credits, is the first property to be developed in Cameron Parish since Hurricane Rita in 2005. While Enterprise celebrates the opening of the Grand Lake Elderly Apartments, more than 70 other developments that also have been awarded GO Zone tax credits – representing more than 6,000 affordable homes and $1 billion in construction activity – are stalled and at risk of not being built. These developments have a congressionally mandated deadline of December 2010 for completing construction. This deadline combined with the economic downturn has made it difficult for developers to attract investors and close on project financing so that construction can begin. Bipartisan bills have been introduced in both chambers of Congress to provide more time for state governments, developers and investors to overcome financial challenges and enable the use of previously allocated housing credits. Visit the Enterprise Action Center for details on the House and Senate bills.

Federal Home Loan Bank Membership Eligibility Extended to CDFIs
The Federal Housing Finance Agency (regulator of the Federal Home Loan Banks; FHLB) has released final regulations that allow certified Community Development Financial Institutions to gain FHLB membership. This rule change was championed by advocates in the industry, such as Opportunity Finance Network (OFN). For more information, view OFN’s memo on the regulatory changes.  
 
Research and Reports

Opportunity Finance Network Releases State Legislative Guide
Opportunity Finance Network (OFN), a network of private financial intermediaries, has released its annual report on state legislation pertinent to Community Development Financial Institutions (CDFIs). OFN reported that “as state and local governments struggle with budgetary restrictions and declining revenues, CDFIs are emerging as strong partners in developing and implementing these [public policy] solutions.” The full report is available for download on the OFN website.

CBPP Report is Critical of Proposals to Expand Moving-to-Work Program
On January 22, the Center on Budget and Policy Priorities released a report on the proposed expansion of the Moving-to-Work program in the Section 8 Voucher Reform Act. For more information, read the full report on the CBPP website.

NRDC Study Links Location Efficiency and Foreclosure Rates
A Natural Resources Defense Council (NRDC) report found that “factors such as neighborhood compactness, access to public transit and rates of vehicle ownership, are key to predicting mortgage performance and should be taken more seriously by mortgage underwriters, policy-makers and real estate developers.” Visit the NRDC website for the full report.