Order Code RL33344
The Department of Housing and
Urban Development: FY2007 Budget
Updated January 25, 2007
Maggie McCarty, Libby Perl, and Bruce E. Foote
Domestic Social Policy Division
Eugene Boyd
Government and Finance Division
Meredith Peterson
Knowledge Services Group

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The Department of Housing and
Urban Development: FY2007 Budget
Summary
On February 6, 2006, the President submitted his FY2007 budget to the
Congress. It proposed funding the Department of Housing and Urban Development
(HUD) at $34.1 billion (not including FY2006 supplementals related to Hurricane
Katrina). In its FY2007 budget summary, HUD states that the budget intends to use
“taxpayer money more wisely,” and “reform programs in need of repair.”
The President’s budget would increase funding for the Section 8 Housing
Choice Voucher program from $15.4 billion in FY2006 to $15.9 billion in FY2007.
It proposes to reduce funding to the Public Housing Capital Fund to $2.2 billion from
the $2.4 billion that was appropriated for FY2006. The proposed budget would also
eliminate funding for public housing’s HOPE VI program, which replaces distressed
public housing units with new or rehabilitated mixed-income developments.
Within the community development programs, the President’s FY2007 budget
proposes to cut funding to the Community Development Block Grant (CDBG)
program by nearly 20% from the FY2006 level. CDBG provides grants to states and
localities to use for housing and community development projects. The FY2007
budget proposal would increase funding for the Housing Opportunities for Persons
with AIDS (HOPWA) program from $286 million to $300 million and the HOME
program from $1.7 billion to $1.9 billion. Additionally, it would increase funding
for the four Homeless Assistance Grants by $209 million, and would fund two new
initiatives: the Samaritan Initiative for the chronically homeless and the Prisoner Re-
entry Initiative. The President’s budget proposes to cut in half funding for the
Section 811 Housing for the Disabled program, as proposed in FY2006. The
FY2007 budget would provide $119 million for Section 811, down from $237
million in FY2006. The Section 202 Housing for the Elderly program would have
its funding reduced from just under $735 million to $546 million, a drop of 25.7%.
The House passed its version of the HUD funding bill on June 14, 2006 (H.R.
5576). It funds most programs at or near the President’s requested level, although
it increased funding for the Section 8 voucher program, CDBG, and the Section 202
Housing for the Elderly and Section 811 Housing for the Disabled programs. The
Senate Appropriations Committee passed its version of H.R. 5576 on July 20, 2006.
It would provide over $2 billion more for HUD than the President’s request and the
House bill, increasing funding for Public Housing and restoring funding for programs
slated for elimination, including HOPE VI.
Since the majority of the FY2007 appropriations bills were not approved before
the end of FY2006, Congress has enacted a series of stop-gap funding measures, or
continuing resolutions, to maintain government operations until the final FY2007
funding bills are enacted. The current continuing resolution funds HUD programs
at the lower of the FY2006 enacted level or House-passed funding level, and will
expire on February 15, 2007 (P.L. 109-383). This report will be updated to reflect
legislative activity.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction to the Department of Housing and
Urban Development (HUD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
FY2006 Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
FY2007 Budget Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Budget Pressures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Tenant-Based Rental Assistance (Section 8 Vouchers) . . . . . . . . . . . . . 6
Section 8 Project-Based Rental Assistance . . . . . . . . . . . . . . . . . . . . . . 9
Housing Certificate Fund Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Public Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Native American Block Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Housing for Persons with AIDS (HOPWA) . . . . . . . . . . . . . . . . . . . . 15
Rural Housing and Economic Development . . . . . . . . . . . . . . . . . . . . 15
Community Development Fund/Block Grants . . . . . . . . . . . . . . . . . . 16
CDBG Section 108 Loan Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . 19
Brownfields Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
The HOME Investment Partnership Program . . . . . . . . . . . . . . . . . . . 20
Self Help and Assisted Homeownership . . . . . . . . . . . . . . . . . . . . . . . 22
Homeless Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Housing Programs for the Elderly and the Disabled . . . . . . . . . . . . . . 24
Federal Housing Administration (FHA) . . . . . . . . . . . . . . . . . . . . . . . 26
Government National Mortgage Association (Ginnie Mae) . . . . . . . . 27
Office of Federal Housing Enterprise Oversight (OFHEO) . . . . . . . . . 28
Fair Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Lead-Based Paint Hazard Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Research and Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
List of Tables
Table 1. Department of Housing and Urban Development
Appropriations, FY2002-FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 2. Appropriations: Housing and Urban Development,
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 3. Section 8 Tenant-based Rental Assistance (Vouchers),
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 4. Section 8 Project-based Rental Assistance, FY2006-FY2007 . . . . . . . . 9
Table 5. Public Housing, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 6. Native American Block Grants, FY2006-FY2007 . . . . . . . . . . . . . . . . 14
Table 7. HOPWA, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 8. Rural Housing and Economic Development, FY2006-FY2007 . . . . . . 16
Table 9. Community Development Fund (CDF):
Community Development Block Grants (CDBG)
and Related Set-Asides, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Table 10. CDBG Section 108 Loan Guarantees, FY2006-FY2007 . . . . . . . . . . 19

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Table 11. Brownfields Redevelopment, FY2006-FY2007 . . . . . . . . . . . . . . . . . 20
Table 12. The HOME Investment Partnership Program,
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 13. Self Help and Assisted Homeownership,
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 14. HUD Homeless Programs, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . 23
Table 15. Sections 202 and 811, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . 25
Table 16. Federal Housing Administration, FY2006-FY2007 . . . . . . . . . . . . . . 27
Table 17. Government National Mortgage Association,
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table 18. Fair Housing Programs, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . 28
Table 19. Lead-Based Paint Hazard Control, FY2006-FY2007 . . . . . . . . . . . . . 29
Table 20. Research and Technology, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . 30

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Key Policy Staff
CRS
Name
Area of Expertise
Division
Telephone and E-Mail
Eugene Boyd
Community and
economic development,
7-8689
including Community
G&F
eboyd@crs.loc.gov
Development Block
Grants, Brownfields
Bruce E. Foote
Homeownership,
7-7805
including FHA, rural
DSP
bfoote@crs.loc.gov
housing
Maggie McCarty
Assisted rental housing,
including Section 8,
7-2163
DSP
public and assisted
mmccarty@crs.loc.gov
housing, HOME
Libby Perl
Housing for special
populations, including
7-7806
DSP
the elderly, disabled,
eperl@crs.loc.gov
homeless, HOPWA
Division abbreviations: DSP = Domestic Social Policy; G&F = Government and Finance.

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The Department of Housing and
Urban Development: FY2007 Budget
Most Recent Developments
Continuing Resolutions Enacted. Congress did not enact the majority of
FY2007 appropriations bills before the end of the 2006 fiscal year. In order to fund
government operations until final appropriations bills are enacted, Congress attached
a continuing resolution (CR) to the FY2007 Defense Appropriations conference
report (H.Rept. 109-676). It was adopted by Congress on September 26, 2007, and
signed into law on September 29, 2006 (P.L. 109-289). It funded HUD programs
— through November 17, 2006 — at the lower of the House-passed or FY2006
enacted funding level. Programs that received funding in FY2006, but are not slated
to receive any funding under the House-passed bill, are funded at the FY2006 level.
A second CR, extending the previous CR through December 8, 2006, was approved
by Congress on November 15, 2006 (P.L. 109-369). A third CR was enacted on
December 8, 2006, just prior to adjournment of the 109th Congress (P.L. 109-383).
It extend the original CR through February 15, 2007. The incoming chairmen of the
House and Senate Appropriations Committees have indicated that the 110th Congress
may enact a modified CR for the remainder of FY2007. For more information, see
CRS Report RL33681, FY2007 Regular Appropriations Acts: Procedures for
End-of-Session Wrap-Up, by Robert Keith.
Senate Committee Passage. Two days after subcommittee passage, on
July 20, 2006, the Senate Appropriations Committee approved its version of the
FY2007 Transportation, Treasury, and Housing and Urban Development, the
Judiciary and Independent Agencies Appropriations bill, providing $36.6 billion for
HUD (H.R. 5576).
House Passage. On June 14, 2006, the House passed its version of the
FY2007 Transportation, Treasury, and Housing and Urban Development, the
Judiciary, District of Columbia and Independent Agencies Appropriations bill (H.R.
5576), providing $35.3 billion for HUD. Several floor amendments were adopted to
the bill, which had been reported out of subcommittee on May 26, 2006, and out of
full committee on June 6, 2006.
President’s Budget Submitted. The President submitted his FY2007
budget to the Congress on February 6, 2006, requesting $34.1 billion for HUD. This
represents an increase of just under 2% over the regular FY2006 appropriation (not
including FY2006 supplementals related to Hurricane Katrina), and an increase of
about 17% over the President’s FY2006 request of $29.1 billion.

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CRS-2
Introduction to the Department
of Housing and Urban Development (HUD)
Most of the appropriations for the Department of Housing and Urban
Development (HUD) are designed to address housing problems faced by households
with very low incomes or other special housing needs. These include programs of
rental assistance for the poor, elderly, or disabled, housing assistance for persons with
AIDS, and shelter for those who are homeless. The two large HUD block grant
programs, HOME and Community Development Block Grants (CDBG), also help
communities finance a variety of activities to address the housing and community
development needs of disadvantaged populations. In recent years, HUD has focused
more attention on efforts to increase the homeownership rates for lower-income and
minority households. HUD’s Federal Housing Administration (FHA) insures
mortgages made by lenders to lower-income home buyers, many with below-average
credit records, and to developers of multifamily rental buildings containing relatively
affordable units.
Table 1. Department of Housing and
Urban Development Appropriations, FY2002-FY2006
(net budget authority in billions)
FY2002
FY2003
FY2004
FY2005
FY2006
$30.15 $31.01 $31.20 $31.92
$50.68a
Source: Figures are from the House Appropriations Committee estimate tables. FY2006 figures are
adjusted to reflect the 1% across-the-board rescission enacted in P.L. 109-148. Final appropriations
levels for any fiscal year include all supplemental appropriations or rescissions. They do not reflect
revised estimates of offsetting receipts.
a. Figure includes $17.1 billion ($11.9 billion in P.L. 109-148 and $5.2 billion in P.L. 109-234) in
emergency supplemental appropriations enacted in response to the 2005 Hurricanes. Regular
FY2006 HUD appropriations totaled just under $33.6 billion.
FY2006 Appropriations
On November 30, 2005, the President signed P.L. 109-115, the FY2006
Appropriations Act for the Departments of Transportation, Treasury, and HUD, the
Judiciary, the District of Columbia and Related Agencies. The bill included just
under $34 billion for HUD, a significant increase from the President’s $29 billion
request. The law rejected the President’s proposal to eliminate the CDBG program
and replace it with a new block grant program called “Strengthening America’s
Communities” in the Department of Commerce (for more information, see CRS
Report RL32823, An Overview of the Administration’s Strengthening America’s
Communities Initiative, coordinated by Eugene Boyd). Congress also rejected major
cuts requested by the President for the Section 811 Housing for the Disabled program
and the HOPE VI program. (For more information, see CRS Report RL32869, The
Department of Housing and Urban Development (HUD): FY2006 Budget, by
Maggie McCarty, Libby Perl, Bruce E. Foote, and Eugene Boyd.)

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CRS-3
On December 30, 2005, the FY2006 Department of Defense Appropriations bill
(P.L. 109-148) was enacted, including supplemental appropriations for Hurricane
Katrina relief. The act provided almost $12 billion in supplemental funds for HUD,
$11.5 billion of which was allocated for the CDBG program, and $390 million for
HUD’s Disaster Assistance Vouchers. To offset the cost of hurricane recovery, the
act also included a 1% across-the-board rescission to all domestic discretionary
programs, including all HUD programs. In total, the rescission reduced HUD’s
budget by $380 million. On June 15, 2006, the President signed a second
supplemental appropriations, P.L. 109-234, that provided an additional $5.2 billion
in CDBG assistance for Hurricane Katrina relief activities, bringing the total
supplemental appropriations for CDBG-supported hurricane relief to $16.7 billion.
(For more information, see CRS Report RL33298, FY2006 Supplemental
Appropriations: Iraq and Other International Activities; Additional Katrina
Hurricane Relief, co-coordinated by Paul M. Irwin and Larry Nowels, and CRS
Report RL33330, Community Development Block Grant Funds in Disaster Relief and
Recovery, by Eugene Boyd.)
FY2007 Budget Issues
Budget Pressures. The President’s FY2007 request highlights growing
pressures within the HUD budget between the discretionary programs that require
appropriations and the rescissions and offsetting collections and receipts that
subsidize — or offset — the cost of those appropriations. As can be seen in Table
2, while the President’s overall funding request is a slight increase over the previous
year (1.6%), the amount of appropriations requested is actually a slight decrease (less
than 1%). This seeming contradiction results from the reality that the amount of
offsetting collections and receipts has been decreasing as the Federal Housing
Administration’s mortgage insurance programs have produced a smaller amount in
offsetting receipts. From FY2006 to FY2007, under the President’s budget,1 the
amounts of offsetting receipts will drop by more than a billion dollars, from more
than $1.6 billion to about $650 million. (For an expanded discussion, see Federal
Housing Administration (FHA) and Table 16.) With less available to offset the cost
of the budget, higher appropriations are required to maintain the same funding level.
At the same time, many programs — such as the Section 8 voucher program —
require increased appropriations to maintain current service levels. Also, the
President has set a goal of restraining domestic discretionary spending increases to
at or below the rate of inflation, and has encouraged the executive branch Secretaries
to examine programs to ensure that they are using taxpayer dollars wisely. HUD’s
FY2007 budget summary states that the budget intends to use “taxpayer money more
wisely,” and “reform programs in need of repair.” The combination of these factors
has led to proposals for flat funding or cuts for many HUD programs.
Table 2, below, presents the President’s FY2007 HUD budget request compared
to the prior year’s budget, and the Congressional response to date.
1 As can be seen in Table 16, the House bill assumes that FHA will find additional
administrative savings.

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CRS-4
Table 2. Appropriations: Housing and Urban Development,
FY2006-FY2007
(budget authority in billions of dollars)
FY2006
FY2007
FY2007
FY2007
Program
enacted
request
House
S. Com.
Appropriations
Tenant Based Rental Assistance
(includes advanced appropriation) (Sec. 8)
15.418
15.920
15.846
15.920
Project Based Rental Assistance (Sec.8)
5.037
5.676
5.476
5.676
Sec. 8 supplementala
0.390
0.000
0.000
0.000
Public housing capital fund
2.439
2.178
2.208b
2.460
Public housing operating fund
3.564
3.564
3.564
3.660
HOPE VI
0.099c
0.000c
0.000b
0.100
Native American housing block grants
0.624
0.626
0.626
0.626
Indian Housing Loan Guarantee
0.004
0.006
0.004
0.006
Native Hawaiian Block Grant
0.009
0.006
0.009
0.009
Native Hawaiian Loan Guarantee
0.001
0.001
0.001
0.001
Housing, persons with AIDS (HOPWA)
0.286
0.300
0.300
0.295
Rural Housing Economic Development
0.017
0.000
0.000
0.020
Community Development Fund (Including
CDBG)d
4.178
3.032
4.215e
4.215
CDF supplementala
16.700
0.000
0.000
0.000
Section 108 Loan Guarantees
0.004
0.000
0.003
0.003
Brownfields redevelopment
0.010
0.000
0.000e
0.000
HOME Investment Partnerships
1.757
1.917
1.917
1.942
Homeless Assistance Grants
1.327
1.536f
1.536
1.511
Self-help Homeownership
0.060
0.040
0.060
0.066
Housing for the elderly
0.735
0.545
0.747
0.750
Housing for the disabled
0.237
0.119
0.240
0.240
Housing Counseling Assistanceg
0.000
0.045
0.000
0.000
Rental Housing Assistance
0.026
0.025
0.025
0.025
Research and technology
0.056
0.068
0.056
0.060
Fair housing activities
0.046
0.045
0.045
0.045
Office, lead hazard control
0.150
0.115
0.150
0.152
Salaries and expenses
0.573
0.590h
0.493h
0.594h
Working capital fund
0.195
0.220
0.000i
0.220
Manufactured Housing Fees Trust Fundj
0.013
0.016
0.016
0.016
Office of Federal Housing Enterprise Oversightj
0.060
0.062
0.062
0.068
FHA Expensesj
0.727
0.734
0.714
0.724
GNMA Expensesj
0.011
0.061k
0.011
0.011
Inspector General
0.081
0.083
0.083
0.091
Appropriations Subtotal without
supplemental
37.743
37.527
38.405
39.504
Appropriations Subtotal with supplemental
54.833
37.527
38.405
39.504
Rescissions
Sec. 8 recaptures (rescission)l
-2.050
-2.000
-2.000
-2.000
HOPE VI rescission
0.000
-0.099
0.000
0.000

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CRS-5
FY2006
FY2007
FY2007
FY2007
Program
enacted
request
House
S. Com.
Brownfields redevelopment rescission
-0.010
0.000
0.000
0.000
Economic Development Initiative Rescission
0.000
-0.356m
0.000
0.000
Rescissions Subtotal
-2.060
-2.455
-2.000
-2.000
Offsetting Collections and Receipts
Manufactured Housing Fees Trust Fund
-0.013
-0.016
-0.016
-0.016
Office of Federal Housing Enterprise Oversight
-0.060
-0.062
-0.062
-0.068
Federal Housing Administration (FHA)
-1.648
-0.652
-0.849
-0.652
GNMA
-0.368
-0.224k
-0.181
-0.181
Offsets Subtotal
-2.089
-0.954
-1.108
-0.917
Total before supplementals
$33.594
$34.118
$35.297
$36.588
Total with supplementals
$50.684
$34.118
$35.297
$36.588
Source: Prepared by CRS based on H.R. 5576, H. Rept 109-495, and S. Rept 109-293. FY2006
figures are adjusted to reflect the 1% across-the-board rescission enacted in P.L. 109-148. Figures for
FY2006 enacted and FY2007 request contained in earlier versions of this table were based on CRS
estimates, which have since been replaced with House Appropriations Committee estimates.
a. P.L. 109-148 provided emergency supplemental hurricane recovery funds, including $390 million
for the Section 8 voucher program and $11.5 billion for CDBG. An additional $5.2 billion for
CDBG was included in P.L. 109-234. These special purpose funds were not a part of the regular
FY2006 appropriations law (P.L. 109-115).
b. A floor amendment added $30 million to the Public Housing Capital Fund. Floor statements
indicated that the funding was intended for the HOPE VI program; however, no language was
included in the bill directing that the funds be used for HOPE VI.
c. The President’s FY2007 budget requests that Congress rescind the $99 million it provided for the
HOPE VI program in FY2006.
d. The Community Development Fund account funds the CDBG program and other related
community development programs. CDBG accounts for the largest portion of the CDF account.
e. A floor amendment added $15 million to the Community Development Fund. Floor statements
indicated that the funds were to be used for Brownfields.
f. The President’s request includes $25 million that would be transferred to the Department of Labor.
g. This program is typically funded as a set-aside within the HOME program. In FY2006, it was
funded at $42 million within the HOME account. In recent years, including FY2007, the
President’s budget has requested that the program be funded separately from HOME. The
House and Senate versions of the FY2007 funding bill continue to fund Housing Counseling as
a set-aside within the HOME account, each at $42 million.
h. The President’s request assumed $4 million in savings from a legislative proposal. Neither the
House-passed bill nor the Senate committee-passed bill assumes such savings.
i. The House Appropriations Committee-passed version included $100 million for the Working
Capital Fund. A floor amendment decreased the account by $100 million to offset a $70 million
increase in funding for tenant-based rental assistance.
j. The administrative costs of these programs are generally paid by offsetting receipts collected by the
program. In some cases, the administrative costs are fully offset by collected fees; in others,
they are partially offset, and in others, the offsetting receipts are larger than the administrative
costs, and the excess are used to offset the total cost of the HUD budget. See the offsetting
receipts portion of Table 2.
k. The President’s budget documents indicate that a new GNMA proposal will cost $43 million, but
its costs will be offset by an additional $43 million in offsetting receipts. The House and Senate
bills do not include that assumption.
l. Each year, unobligated balances are recaptured from the Housing Certificate Fund, an account that
previously funded the tenant-based and project-based Section 8 rental assistance programs, and
which still contains long-term Section 8 contracts funded in prior years.
m. The President’s FY2007 budget requests that Congress rescind the full amount it provided in
FY2006 for Economic Development Initiative and Neighborhood Initiative earmarks within the
CDF account.

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CRS-6
Tenant-Based Rental Assistance (Section 8 Vouchers). The tenant-
based rental assistance account funds the Section 8 Housing Choice Voucher
program. (See CRS Report RL32284, An Overview of the Section 8 Housing
Program, by Maggie McCarty.) Section 8 vouchers are portable rent subsidies that
low-income families use to reduce their housing costs in the private market. HUD
currently funds more than two million Section 8 vouchers, which are administered
at the local level by quasi-governmental Public Housing Authorities (PHAs). This
account funds the cost of those vouchers and the cost of administering the program.
Table 3. Section 8 Tenant-based Rental Assistance (Vouchers),
FY2006-FY2007
(in millions of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Section 8 Tenant-based Rental Assistance
$15,418a
$15,920
$15,846
$15,920
(vouchers)
Voucher renewals
13,949
14,436
14,506
14,436
Rental subsidy reserve
45b
100c
100c
100c
Administrative costs
1,238d
1,281e
1,137e
1,271e
Family Self Sufficiency
48
48
48
48
Incremental Vouchers (FUP)
0
0
0
10
Tenant Protection
178
149
149
149
Working Capital Fund
6
6
6
6
Source: See Table 2.
Note: Figures may not add due to rounding. Approximately $4.2 billion of the funds shown in the
table above are provided in the form of an advance appropriation for the following year, and each year
approximately $4.2 billion is available from the previous year (adjusted for rescissions).
a. Amount does not include $390 million in emergency supplemental appropriations provided in the
FY2006 Department of Defense Appropriations bill. The supplemental funds are to be used to
provide vouchers to families that were receiving HUD assistance prior to Hurricane Katrina and
were displaced by the storm. For more information see CRS Report RL33173, Hurricane
Katrina: Questions Regarding the Section 8 Housing Voucher Program, by Maggie McCarty.
b. These funds were set-aside to adjust the budgets of agencies that (1) applied for an adjustment
because they had unusually low leasing levels during the May-July period that was the basis for
FY2005 funding or (2) the Secretary determined to have a significant increase in renewal costs
due to unforeseen circumstances or portability vouchers.
c. These funds would be used to make one-time portability adjustments to agency budgets or to
provide additional rental subsidy funding in response to unforeseen exigencies.
d. $10 million of this amount was set aside for special fees as determined by the Secretary. They
were awarded to agencies administering homeownership vouchers and tenant protection
vouchers.
e. $30 million of this amount would be set aside for special fees as determined by the Secretary, $20
million of which would be used for agencies administering tenant protection vouchers. The
remaining $10 million, according to the President’s budget documents, would be used at the
Secretary’s discretion for fees associated with other special programs, including homeownership
vouchers.

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CRS-7
Voucher Renewals. The majority of tenant-based rental assistance funding
is dedicated to voucher renewals. Congress has authorized the creation of more than
2 million vouchers over the history of the program, and the funding for virtually all
of them expires every year. If a family is using a voucher to lease an apartment but
funding is not sufficient to renew it, then the family will lose its assistance and likely
lose its current housing. Prior to FY2004, HUD funded PHAs based on the number
of vouchers they were using and the cost of those vouchers. If costs went up or
PHAs were able to use more of their vouchers, they received additional funds to
cover those costs. Since FY2004, Congress has moved away from funding PHAs
based on their actual costs, and now provides agencies with a pro rata share of
renewal funding based on what they received in the prior year. This formula change
has provoked much controversy among low-income housing advocates and PHA
advocacy groups, who argue that it does not reflect agencies’ actual needs and results
in some agencies receiving less funding than they need to maintain their programs,
and others receiving more than they can use under the current law (for more
information, see CRS Report RS22376, Changes to Section 8 Housing Voucher
Renewal Funding, FY2003-FY2006, by Maggie McCarty). The Administration’s
budget documents state that HUD supports the current budget-based funding formula,
and that it complements the Administration’s Section 8 voucher reform initiative, the
Flexible Voucher Program proposal (for more information, see CRS Report
RL33270, The Section 8 Housing Voucher Program: Reform Proposals, by Maggie
McCarty).
The President’s FY2007 budget requests $14.4 billion for voucher renewals, an
increase of 3.5% over FY2006. Most of these funds ($14.3 billion) would be
distributed to PHAs based on the amounts they were eligible to receive in FY2006,
prior to prorations, plus the HUD-developed regional inflation factor (the annual
adjustment factor, or AAF). The Secretary would be permitted to adjust agency
budgets to account for deposits to Family Self Sufficiency program escrow accounts
or for the first-time renewal of tenant-protection vouchers. The amounts would then
be reduced proportionally to fit within the amount appropriated. Agencies
participating in the Moving to Work demonstration would be funded based on their
contracts, but their budgets would be subject to proration. The President’s budget
would remove a clause included in the FY2006 appropriations law requiring that the
entire amount of funding for renewals be obligated up front. It would also lift the ban
on overleasing2 that Congress enacted in FY2003. Presumably, lifting this ban would
permit agencies with decreased costs to more fully utilize their funding.
The remaining $100 million would be used by the Secretary to provide one-time
adjustments to agency budgets for increased portability costs or additional rental
subsidies in response to unforeseen exigencies. In FY2006, Congress provided the
Secretary with a $45 million set-aside to adjust agencies’ budgets under a number of
circumstances, including cost increases due to portability.
2 Overleasing, or maximized leasing, occurs when PHAs sign leases for more vouchers than
they are authorized to lease. This practice was a common way that agencies used excess
funds prior to FY2003.

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CRS-8
The House-passed bill provides $70 million more than the President requested
for voucher renewals, and would distribute the funds following the President’s
request (including the $100 million set-aside). The additional $70 million was not
included in the bill reported by the Appropriations Committee, but was added in a
floor amendment, and its cost was offset by a $100 million reduction in HUD’s
Working Capital Fund.
The Senate Appropriations Committee-passed version of the FY2007 HUD
funding bill would fund voucher renewals at the President’s request, but would adopt
a different formula for allocating the funds. The Secretary would be directed to fund
agencies based on their leasing and costs for the most recent 12 consecutive months
for which data are available, adjusted by the Annual Adjustment Factor, deposits to
tenant escrow accounts, first-time renewal of tenant protection vouchers, and
vouchers set aside for project-based commitments. Budgets would then be prorated
to fit within the amount appropriated. Moving to Work agencies would be funded
according to their agreements. Up to $100 million would be made available to adjust
agency budgets for significant increases in renewal costs resulting from unforseen
exigencies or from portability vouchers.3 Agencies would continue to be prohibited
from overleasing.
Administrative Fees. Prior to FY2004, PHAs were paid a fixed fee per
voucher administered. Beginning in FY2004, at Congress’s direction, HUD changed
the way it distributed administrative fees, providing agencies with a pro-rata share
of the amount appropriated for administrative fees, based on what they had received
in the previous year. The change was designed to contain the cost of administrative
fees, which were estimated to have grown to account for 10% of the cost of a
voucher. For FY2007, the Administration requested $1.3 billion for administrative
fees, $30 million of which would be available to the Secretary to use for special
purposes. The request represents a 4% increase over the amount provided in
FY2006; however, since more would be set aside for special fees in FY2007 (only
$10 million was set aside in FY2006), the base administrative fees would only be
increased by 2%.
The House-passed version of the HUD funding bill would cut administrative
fees by 8% from the FY2006 enacted level, providing just over $1.1 billion. Like the
President’s request, the House bill would set aside $30 million for the Secretary to
distribute for special fees. With the set-aside, the base amount for administrative fees
to be allocated across agencies would be reduced by almost 10%.
The Senate Appropriations Committee-passed version of the bill would provide
just under $1.3 billion for administrative fees. The funds would be allocated to
PHAs based on the formula that was in effect prior to FY2004 and prorated to fit
within the amount appropriated. Of the amount, $30 million would be set aside for
the Secretary to allocate to PHAs needing extra funds to administer their programs.
Under the Senate bill, base administrative fees would be increased about 1% over the
FY2006 level.
3 This language is similar to language in the President’s request and House bill, but is not
identical and does not specify that the adjustments be one-time adjustments.

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CRS-9
Tenant Protection Vouchers. Tenant protection vouchers are provided to
families in a variety of circumstances, including families who are threatened with
displacement because the contract on their assisted unit is ending (project-based
Section 8, for example), families who are displaced from public housing (due to
demolition or disposition), families in the witness protection program, and families
in the child welfare system (through the Family Unification Program).
In FY2006, Congress provided $178 million for tenant protection vouchers.
The President’s FY2007 budget requests $149 million for tenant protection vouchers
and also requests the authority to supplement the amount provided with amounts
recaptured from unobligated Section 8 balances. In a change of past policy, the
President is proposing to provide tenant protection vouchers to replace only units that
were under lease at the time they were demolished or disposed, rather than all units.
The House bill adopts the President’s request for tenant protection vouchers.
The Senate committee-passed bill would fund tenant protection vouchers at the
President’s requested level; however, it would not limit them to units under lease, as
requested by the President.
Incremental Vouchers. Congress has not funded any new vouchers —
called incremental vouchers — since FY2002 (outside of tenant protection vouchers).
The Senate Appropriations Committee-passed FY2007 HUD funding bill contains
$10 million for new incremental vouchers targeted to the Family Unification Program
(FUP). FUP vouchers are given to families involved in the child welfare system for
whom housing is a major barrier to reunification. They are also provided to youths
aging out of foster care.
Section 8 Project-Based Rental Assistance. This account provides
funding to administer and renew existing project-based Section 8 rental assistance
contracts between HUD and private landlords. Under those contracts, HUD provides
subsidies to units owned by private landlords that allow eligible low-income families
to live in the units but pay only 30% of their incomes toward rent. No new contracts
have been entered into under this program since the early 1980s; the funding
provided is used only to renew existing contracts and pay administrative costs.
Table 4. Section 8 Project-based Rental Assistance,
FY2006-FY2007
(in millions of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Section 8 Project-based Rental Assistance
$5,037
$5,676
$5,476
$5,676
Project-based Renewals
4,890
5,526
5,326
5,526
Contract Administrators
146
146
146
146
Working Capital Fund
1
4
4
4
Source: See Table 2.
Note: Totals may not add due to rounding.

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CRS-10
Contract Renewals. The President’s budget includes a request for a 13%
increase in project-based renewal funding for FY2007. The level of funding
requested is based on an assumption that recaptured funds will be available to
supplement the account as necessary, although budget documents do not provide an
estimate of how much the Administration believes may be necessary. The House-
passed version of the HUD funding bill provides $200 million less than the
President’s request for contract renewals. The committee report accompanying the
bill notes that the Secretary can use recaptured funds to supplement the amount
appropriated. The Senate committee version would fund the President’s request.
Contract Administrators. Contract administrators are subcontracted by
HUD to manage the contracts between landlords and the Department. HUD formerly
administered all of the contracts directly, but has set a goal to transfer all contract
administration to subcontractors. The amount requested by the Administration is a
decrease from the FY2006 enacted level, but the Administration has asked for the
authority to supplement the appropriated amount with amounts recaptured from
Section 8 unobligated balances. The Administration states in its budget documents
that full transition over to contract administrators will depend on whether sufficient
funds can be obtained from unobligated balances, although an estimate of the full
amount required is not provided. The House-passed and Senate committee-passed
bills would fund the President’s request for contract administrators.
Housing Certificate Fund Rescission. The two Section 8 programs —
tenant-based rental assistance and project-based rental assistance — were previously
funded under a joint account called the Housing Certificate Fund (HCF). The HCF
was split by the FY2005 appropriations law, although the account still retains funding
from prior years’ appropriations. Each year, the Administration makes available for
rescission an amount it estimates will be available from unobligated or recaptured
Section 8 funds within the HCF. In FY2006, the President requested that Congress
rescind $2.5 billion from the HCF, and that Congress provide the Secretary with the
authority to use funds from other accounts to meet the rescission if the HCF had
insufficient funds. Out of concern that the full amount may not be available from
within the HCF, Congress rescinded about half a billion less than the Administration
requested, and directed the Secretary to inform the committee before taking funds
from other accounts.
For FY2007, the Administration has requested that Congress rescind $2 billion
from the HCF, and has again requested the authority to meet the rescission from other
sources if sufficient funds are not available within the HCF. The House bill matches
the President’s request. The Senate committee-passed version would also rescind $2
billion; however, the bill includes language directing the Secretary to take $10
million each from HUD and the Office of Management and Budget’s (OMB) salaries
and expenses account before taking funds from other HUD programs. The report
language indicates that the Administration has provided insufficient evidence that $2
billion is available in the Housing Certificate Fund, despite requesting such a large
rescission. Note that similar language was included in the Senate-passed version of
the FY2006 funding bill, but was not included in the final version.

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CRS-11
Public Housing. The public housing program provides publicly owned and
subsidized rental units for very low-income families. While no new public housing
developments have been built for many years, Congress continues to provide funds
to the more than 3,100 public housing authorities (PHAs) that maintain the existing
stock of more than 1.2 million units. Through the Operating Fund, HUD provides
funds to PHAs to help fill the gap between tenants’ contributions toward rent and the
cost of ongoing maintenance, utilities, and administration. Through the Capital
Fund, HUD provides funding to PHAs for large capital projects and modernization
needs. HOPE VI is a competitive grant program that provides funds to help demolish
and/or redevelop severely distressed public housing developments, with a focus on
building mixed-income communities.
Table 5. Public Housing, FY2006-FY2007
(in millions of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Public Housing Operating Fund
$3,564
$3,564
$3,564
$3,660
Operating Subsidies
3,564
3,548
3,548
3,630
Self Sufficiency Initiative
0
10
10
0
Transition to asset-based management/new
0
6
6
30a
formula
Public Housing Capital Fund
$2,439
$2,178
$2,208b
$2,460
Formula Grants
2,347
2,085
2,085c
2,361
Technical assistance/remediation
11
11
11
11
Administrative receivership
9
8
8
8
Emergency reserve
17
20
20
20
Service coordinators and supportive services
38
24
24
30
(ROSS)
Financial and physical assessments
—
15
15
15
Neighborhood Networks
7
0
0
0
Working Capital Fund
11
15
15
15
HOPE VI
$99
$-99d
$0b $100
Source: See Table 2.
Note: Figures may not add due to rounding. Earlier versions of this report contained an error.
Numbers in the House figure for Operating Subsidies were transposed, showing $3,458, rather than
the correct figure, $3,548 (amounts are in millions of dollars).
a. Available only to small PHAs (500 units or less).
b. An amendment offered by Representative Artur Davis and adopted during floor consideration
added $30 million to the Capital Fund. Although floor statements indicate the funds are
intended to be used for HOPE VI, no language was added to bill directing that the funds be used
for HOPE VI.
c. This amount includes the $30 million added by the floor amendment described above. If the
amount were to be used for HOPE VI, $2,115 million would be available for capital grants.
d. The President’s FY2007 budget proposes no new funding for HOPE VI and requests that Congress
rescind the full amount provided to the program in FY2006.

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CRS-12
Operating Fund. FY2007 will be the first year that a new operating subsidy
formula will be used to distribute funds to PHAs. Under the new rule, some agencies
will qualify for a significant increase in funding, while others will be eligible for less
funds. The President’s budget asks for a set-aside of $6 million to help agencies
transition to asset-based management, which can serve as a stop-loss option for
agencies facing major funding decreases in their operating subsidies. Even for those
that will benefit under the formula, the amount the President has requested for
operating subsidies is not enough to fund agencies at 100% of their eligibility.
Rather, HUD estimates that agencies will receive only 85% of their eligible budget,
compared to just under 89% in FY2005. Some advocates contend that the final
proration will be even lower than the President’s estimate because of factors such as
increasing utility costs.4 Because of the proration, some agencies that will qualify for
an increase under the new formula may face a decrease from their prior year’s
funding, and those facing a decrease will likely face an even deeper reduction. The
President’s budget also requests a new set-aside for “housing self sufficiency” funds,
which would be provided to agencies, presumably on a competitive basis, to fund
economic self-sufficiency and financial management skills training for residents.
This appears to replace the Graduation Bonus initiative that was funded in FY2005,
but not in FY2006.
The House-passed bill would fund the account at the President’s request. The
Senate committee-passed bill would provide a $100 million increase in funding for
formula grants, but would not fund the self-sufficiency initiative. The Senate bill
would provide $30 million to aid small PHAs in adjusting to the new operating fund
formula. Language in the administrative provisions portion of the bill would delay
for one year the phase-in of increases and decreases under the new formula and the
requirements for converting to asset-based management, although it specifies that
agencies facing a decrease would still face a 5% reduction in FY2007.
Capital Fund. The President’s FY2007 budget proposed an 11% reduction
in capital funds. The largest numeric decrease comes from an 11% decrease in
funding for formula grants. The Administration claims that the funding requested is
sufficient to meet the estimated $2 billion in annual accrual of capital needs, and that
the backlog in unmet capital needs — which is estimated to be between $18 and $20
billion — is decreasing as units are rehabilitated, either through HOPE VI or capital
funds, or demolished. The President’s budget notes that 85% of public housing units
now meet HUD physical standards, compared to 82% in 2001. The Department’s
budget documents also highlight the use of private financing to meet capital needs,
noting that PHAs have used their stream of capital funds to secure more than $2.5
billion in approved private capital funds, and that requests for another $88 million
are pending.
4 Public Housing Directors Association, HUD announces 85.5 percent proration for 2006:
Implications for 2007 funding even more dire than previously forecast, PHADA Advocate,
July 19, 2006.

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CRS-13
The President’s budget includes a 37% decrease in Resident Opportunities for
Self Sufficiency (ROSS) program funding. This follows a 29% decrease enacted in
FY2006. ROSS is a competitive grant program that funds job training and supportive
services to help residents of public housing transition to work, and provides funding
to provide independent living services to elderly and disabled residents. Budget
documents note that the Administration has changed the structure of the grants to
expand eligible activities. As in FY2006, the President’s budget also proposes to
eliminate funding for Neighborhood Networks, which provides funds to PHAs to
establish, expand, and update community technology centers.
The version of the House bill that was reported by the Appropriations
Committee funded the Capital Fund at the President’s request. A floor amendment
offered by Representative Artur Davis added $30 million to the Capital Fund,
although his floor statements indicated it was intended for the HOPE VI program.
Language was not added to the bill directing the funds to be used for HOPE VI, so
it is unclear whether the additional $30 million will be distributed via the Capital
Fund formula or though the competitive HOPE VI program.
The Senate committee-passed bill would increase the Capital Fund to just above
the FY2006 level. Formula grants would be slightly increased over the FY2006
level, which would be almost $300 million more than the President’s request and the
House-passed level. The bill would fund ROSS at $30 million, $6 million more than
the President’s request, but $8 million less than FY2006.
HOPE VI. Each year since FY2003, the President has requested no new
funding for HOPE VI, although each year Congress has continued to fund the
program. The Administration notes that in 2003, the Office of Management and
Budget’s Program Assessment and Rating Tool (PART) rated the program as
ineffective due to slow expenditure of funds as well as the costs of development.
Furthermore, the Department argues that the program has largely met its goal of
eliminating the worst public housing. For FY2007, as in FY2006, the President has
asked Congress to provide no new money for the HOPE VI program, and to rescind
the funding that Congress provided in the previous year before the Department
awards it to grantees. The House version of the FY2007 funding bill as reported out
of committee did not rescind FY2006 HOPE VI funds, but did not provide FY2007
funds for the program. As noted in the previous “Capital Fund” section, an
amendment adopted during floor consideration of the bill added $30 million to the
Capital Fund. Floor statements by the amendment’s sponsor indicated that the funds
are intended for the HOPE VI program, although legislative language directing the
funds to HOPE VI was not included in the bill, making it unclear whether the funds
would be used for the competitive HOPE VI program or distributed through the
capital fund formula. The Senate committee-passed version of the bill would fund
HOPE VI at $100 million, nearly level with FY2006 funding. It would not rescind
FY2006 funding.
Native American Block Grants. The Native American Housing Assistance
and Self-Determination Act of 1996 (NAHASDA) reorganized the system of federal
housing assistance to Native Americans by eliminating several separate programs of
assistance and replacing them with a single block grant program. In addition to
simplifying the process of providing housing assistance, the purpose of NAHASDA

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CRS-14
was to provide federal assistance for Indian tribes in a manner that recognizes the
right of Indian self-determination and tribal self-governance. NAHASDA provides
block grants to Indian tribes or their tribally designated housing entities (TDHE) for
affordable housing activities. Affordable housing activities include any programs
currently authorized in law, as well as model activities as approved by HUD.
Table 6. Native American Block Grants, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Native American housing block grants
$623,700
$625,680
$625,680
$625,680
Formula Grants
616,275
620,235
619,096
618,086
Loan Guarantee (Title VI Credit
1,831
1,831
1,980
1,980
Subsidy)
Administrative Expenses
149
149
149
149
Technical Assistance
4,455
3,465
3,465
3,465
National American Indian Housing
990
0
990
2,000
Council
Source: See Table 2.
For FY2007, the Administration requested an increase in formula grants and a
decrease in technical assistance from the amounts provided for these purposes in
FY2006. No funding was proposed for the National American Indian Housing
Council.
Both the House-passed version of H.R. 5576 and the version passed by the
Senate Appropriations Committee would fund NAHASDA at just under $626 million
as requested by the budget. In determining the amount to be allocated to each tribe,
both versions of H.R. 5576 would require HUD to make the two calculations. One
calculation would be based on single-race Census data, and the other calculation
would be based on multi-race Census data.5 The greater result would be the tribe’s
allocation. The Senate Appropriations Committee noted its concern that HUD did
not use notice and comment rulemaking when changing the allocation formula. The
committee directs HUD to reassess the decision through notice and comment
rulemaking.
The Senate Appropriations Committee notes its concern that HUD has
attempted to micro-manage many of the activities of NAIHC “to the detriment of
NAHIC, the tribes, and the program.” The committee would provide $2 million to
NAHIC to provide training and technical assistance in support of NAHASDA.
5 In the 2000 Census, respondents were given the option of reporting more than one race.
So data could be based on American Indian and Alaska Native alone, or on American Indian
and Alaska Native and others.

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CRS-15
An administrative provision in both versions of the bill would provide that
NAHASDA funds made available to Native Alaskans must be allocated to the same
Native Alaskan recipients who received funds in FY2005.
Housing for Persons with AIDS (HOPWA). HOPWA provides housing
assistance and related supportive services for low-income persons with HIV/AIDS
and their families. Funding is distributed both by formula allocation and competitive
grants to states, localities, and nonprofit organizations.
Table 7. HOPWA, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Housing for Persons with AIDS
$286,000
$300,100
$300,100
$295,000
(HOPWA)
Source: See Table 2.
The President’s budget for FY2007 proposed to increase funding for HOPWA
to just over $300 million. This is an increase of nearly 5% over FY2006, and more
than $30 million more than the Administration’s budget request for FY2006.
According to HUD, the President’s FY2007 requested funding level would be
sufficient to continue to serve the same number of households as in FY2006, plus
3,500 additional households. The House version of the HUD funding bill (H.R.
5576), passed on June 14, 2006, would fund the HOPWA program at the same level
as that proposed by the President. The Senate Appropriations Committee, which
reported H.R. 5576 to the Senate on July 26, 2006, would provide $295 million for
HOPWA, an increase of $9 million over FY2006, but $5 million less than the
President’s budget request and House proposal.
In addition, the President’s budget proposal stated that legislation would be
introduced to amend the formula that is used to determine the distribution of
HOPWA formula grants. The change would take account of the number of people
living with HIV/AIDS (instead of the total cumulative number of cases), and the need
for housing in a given community (which is not currently considered). Both S. 2339,
introduced on February 28, 2006, and H.R. 5009, introduced on March 13, 2006,
would allocate HOPWA funds based on the number of people living with HIV/AIDS
rather than the total cumulative number of cases.
Rural Housing and Economic Development. This program provides
competitive grants to states and localities to fund capacity building and innovative
housing and economic development activities in rural areas.

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CRS-16
Table 8. Rural Housing and Economic Development,
FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Rural Housing Economic Development
$17,000
$0
$0
$20,000
Source: See Table 2.
The Administration proposed no funding for the Rural Housing and Economic
Development program, and none is proposed in the House-passed version of H.R.
5576. The Administration argues that the program’s efforts can be continued through
the HOME and CDBG programs of HUD, and through the rural housing programs
of the U.S. Department of Agriculture. The House-passed version of H.R. 5576 does
not contain funds for the Rural Housing and Economic Development program, while
the Senate version would fund the program at $20 million.
Community Development Fund/Block Grants. The CDBG program is
the largest source of federal assistance in support of the housing, community, and
economic development activities of states and local governments. For the second
consecutive year, the Administration has included in its budget request a proposal
that would eliminate a number of federal economic and community development
programs. Last year, the Administration’s FY2006 budget recommendations
included a proposal that would have consolidated the activities of at least 18 existing
community and economic development programs into a two-part grant proposal
called the “Strengthening America’s Communities Initiative” (SACI). Seven of the
programs that would have been eliminated are administered by HUD. Under the
Administration’s FY2006 proposal, the Department of Commerce would have
administered a core program and a bonus program. The bonus program would have
awarded additional funds to communities that demonstrated efforts to improve
economic conditions. Congress rejected the proposal and appropriated $4.2 billion
for the seven HUD programs that would have been eliminated, including $3.7 billion
in CDBG funding.
The President’s FY2007 budget also contained an outline of some general
elements of a SACI proposal, although no formal legislative proposal was introduced
when the budget was first released on February 6, 2006. Under the FY2007 version,
two of the 18 existing community and economic development programs would be
funded and retooled — HUD’s CDBG and a new Regional Development Account
(RDA) to be administered by the Economic Development Administration (EDA).
As initially outlined in Administration budget documents, the proposal is likely to
call for the following:
! the development of a new CDBG allocation formula targeted to the
neediest communities;
! the development of a bonus fund component for the CDBG program;
! reforms that would address the CDBG program’s shortcoming as
outlined in the Program Assessment Rating Tool;

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CRS-17
! the creation of a new Regional Development Account (RDA) that
would be administered by EDA, replacing the agency’s current
budget categories of public works, economic adjustment assistance,
technical assistance, and research and evaluation.
! the continued funding of planning grants to EDA-designated
Economic Development Districts and university programs; and
! the development of a common set of goals and performance
measures for CDBG and EDA programs.
The FY2007 budget proposes a SACI funding level of $3.360 billion — nearly
$2 billion less than the aggregate FY2006 appropriation for the 18 programs included
in the Administration’s original proposal. The CDBG would be funded at just under
$3 billion in FY2007. The budget would also request $327.2 million for EDA
assistance, including $257 million for RDA assistance.
On May 25, 2006, the Secretary of HUD unveiled its reform proposal for the
CDBG — The Community Development Block Grant Reform Act of 2006. The
legislative proposal, which has not been formally introduced because of a lack of
congressional sponsor, would
! eliminate the dual CDBG formula and replace it with a single
weighted formula that targets assistance based on a community or
state’s relative share of households living in poverty (excluding
college students); female-headed households with minor children;
overcrowded housing; housing 50 years or older occupied by low-
income families; and per capita income;
! no longer allocate funds to entitlement communities and states using
a 70%/30% formula allocation split; instead, states and entitlement
community allocations would be drawn from a single pool of funds;
! require entitlement communities to meet a minimum grant threshold
in order to receive a direct annual allocation — communities that fail
to meet the minimum grant amount could join with their urban
county, creating a new combined entitlement community, or could
have their data included in the state totals;
! establish a two-year transition for communities that no longer meet
the minimum grant threshold amount;
! direct HUD to establish a set of performance measures and
accountability standards; and
! create a $200 million bonus grant program dubbed the Economic
Development and Revitalization Challenge Grant, which would
reward entitlement communities that have programs resulting in
improving living conditions in distressed neighborhoods.
On June 14, 2006, the House approved the HUD funding bill, H.R. 5576. It
includes $4.2 billion for the Community Development Fund, which is $1.2 billion
more than requested by the Administration. The $4.2 billion funding level
recommended by the House includes $3.9 billion for the CDBG formula program,
which is $898 million more than requested by the President; $57 million for Indian
tribes, $250 million for EDI assistance; $20 million for Neighborhood Initiative (NI)
funding and $15 million for HUD’s Brownfields Redevelopment Program. Funding

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CRS-18
for brownfields was approved as an amendment (H.Amdt. 1013) during floor
consideration of the bill.
On July 26, 2006, the Senate Appropriations Committee reported its version of
H.R. 5576 (S.Rept. 109-293). The bill recommends an appropriation of $4.2 billion
for CDF activities, including $3.9 billion for CDBG formula grants and $58 million
for Indian tribes, $250 million for EDI assistance, and $30 million for NI funding.
Economic Development Initiatives (EDIs) and Neighborhood
Initiatives (NIs). During the past few budget cycles, Congress has used both the
EDI and NI accounts to fund hundreds of congressionally earmarked projects. For
FY2006, Congress approved $307 million in EDI funds for 1,126 earmarked projects
and $49 million in NI funds for 50 projects identified in the conference report
(H.Rept. 109-307) accompanying the FY2006 TTHUD Appropriations Act, P.L. 109-
115. The Administration’s budget document would rescind any unobligated balances
remaining from EDI and NI funds appropriated in FY2006. The House-passed
version of H.R. 5576 would appropriate $250 million for EDI earmarks and $20
million for NI projects. In addition, recipients of EDI and NI funding would be
required to provide 40% in matching funds, which would be a new requirement for
the programs. The Senate Appropriations Committee also recommends $250 million
in EDI funding, but recommends $30 million in NI assistance, which is $10 million
more than recommended by the House.
Table 9. Community Development Fund (CDF):
Community Development Block Grants (CDBG)
and Related Set-Asides, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
Program
enacted
request
House
S. Com.
CDF (see Note below)
$15,677,800
$3,032,000
$4,215,000
$4,215,000
CDBG (Formula-based grants)a
3,710,916
2,974,580
3,872,580
3,877,000
Disaster Assistance
16,700,000b
NA
NA
NA
Set-asides (see below for
details):
466,884
57,420
342,420
338,000
Indian Tribes
59,400
57,420
57,420
58,000
Working capital fund
transfer
1,584
0
0
0
Youthbuild
49,500
c
c
c
Neighborhood initiative
demonstration
49,500
d
20,000
30,000
Economic development
initiatives
306,900
d
250,000
250,000
Brownfields Redevelopment
[10,000] e
0
15,000
0
Source: See Table 2.

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CRS-19
Note: Several programs and initiatives that were funded as set-asides within the CDF account were
moved to different accounts in FY2006 (P.L. 109-115). Section 107 assistance to university-based
programs was transferred to the Research and Technology Account, and the President has proposed
to maintain that transfer in FY2007 (see Table 20). P.L. 109-115 also created a new account, the
Self-Help Assisted Homeownership account, to fund community development-related initiatives, such
as the Self-Help Homeownership Program. The President’s FY2007 budget has proposed to maintain
the new account (see Table 13).
a. The amount specified in each appropriations bill for formula grants is split between grants to
entitlement communities (which receive 70% of grant funds) and states (which receive 30% of
formula grant funds). The account also includes funds for insular areas ($6.9 million for
FY2006 and $7 million in the FY2007 request).
b. P.L. 109-148, the Defense Appropriations Act for FY2006, included an $11.5 billion supplemental
appropriation to the CDF account for emergency disaster assistance to communities affected by
Hurricanes Katrina, Rita, and Wilma. P.L. 109-234, Emergency Supplemental Appropriations
Act for Defense, the Global War on Terror, and Hurricane Recovery for 2006, includes a $5.2
billion supplemental appropriation to the CDF account for emergency disaster assistance to
communities affected by Hurricanes Katrina, Rita, and Wilma.
c. This program would be transferred to the Department of Labor with a funding level of $50 million.
d. The President’s FY2007 budget requests that Congress rescind the full amount provided in FY2006
for Economic Development Initiative and Neighborhood Initiative earmarks within the CDF
account.
e. Funds appropriated under a separate stand-alone account. See section on HUD Brownfield
Redevelopment program.
CDBG Section 108 Loan Guarantees. The Section 108 loan guarantee
program allows states and entitlement communities to leverage their annual CDBG
allocation in order to help finance brownfield redevelopment, large scale economic
development, and housing projects. CDBG entitlement communities and states are
allowed to borrow up to five times their annual CDBG allocation for qualifying
activities. As security against default, states and entitlement communities must
pledge their current and future CDBG allocation. Consistent with the
Administration’s budget request, the bill as reported by the House Appropriations
Committee did not include funding for the program. During floor consideration of
the measure, the full House approved an amendment (H.Amdt. 1023) sponsored by
Representative Maxine Waters that would appropriate more than $2.9 million for the
program for FY2007. Funding for the program would be offset by a reduction in
HUD’s management and administration account. Inclusion of funding for Section
108 loan guarantee activities is an important element in the effort to restore funding
for HUD’s Brownfield Redevelopment program. (See the discussion of HUD’s
brownfields program). The Senate Appropriations Committee bill recommends $3
million for loan guarantee activities.
Table 10. CDBG Section 108 Loan Guarantees, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Sec. 108 loan guarantee
$3,713
$0
$2,970
$3,000
Source: See Table 2.

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CRS-20
Brownfields Redevelopment. The Brownfields Redevelopment program
is a competitive grant program that provides funds to assist cities with the
redevelopment of abandoned, idled, and underused industrial and commercial
facilities where expansion and redevelopment are burdened by real or potential
environmental contamination. The Administration requested no funding for this
program for FY2007. Its budget documents note that this program activity would be
eligible for CDBG funding. The House bill as reported out of committee did not
include funding for the program for FY2007. During floor consideration of the
measure, the House approved an amendment (H.Amdt. 1013), offered by
Representative Gary Miller, that would appropriate $15 million for the program for
FY2007. Funding for the brownfield program would be offset by reducing funding
for IRS business systems modernization program by $15 million.
The availability of Section 108 loan guarantees for FY2007 makes it possible
to fund HUD’s brownfield program as it is presently authorized. The statutory
authority governing the HUD program (42 U.S.C. §5308) restricts the use of
brownfield funds to projects that also include Section 108 loan guarantees. Although
a community can receive CDBG Section 108 loan guarantees without receiving HUD
brownfield funds, it can not receive brownfield funds without procuring Section 108
loan guarantee authority. This peculiar arrangement has proven troublesome for
some communities, particularly small nonentitlement jurisdictions, which must have
the cooperation of the state government agency that controls the state CDBG program
in order to access the loan guarantee program. Last year, the House approved H.R.
280, which was introduced by Representative Gary Miller. The bill would decouple
the brownfield program from the Section 108 loan guarantee program, thus allowing
small communities direct access to the program and relieving entitlement
communities and states of the requirement of pledging their CDBG allocation as
security against defaulting on the Section 108 loan guarantee. The Senate version of
the bill does not include funding for the brownfield program.
Table 11. Brownfields Redevelopment, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Brownfields Redevelopment
$10,000
$0
[$15,000]a
0
Source: See Table 2.
a. FY2007 appropriation included as a set-aside under the Community Development Fund (CDF)
account. See Table 9 of this report.
The HOME Investment Partnership Program. Created in 1990, the
HOME Investment Partnership Program provides formula-based block grant funding
to states, units of local government, Indian tribes, and insular areas to fund affordable
housing initiatives. Eligible activities include acquisition, rehabilitation, and new
construction of affordable housing, as well as rental assistance for eligible families.
The HOME program account has also been used to fund related programs. The
American Dream Downpayment Initiative (ADDI), created in 2003 (P.L. 108-186),
funds HOME grantees to provide downpayment, closing cost, and rehabilitation

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CRS-21
assistance to first-time home buyers. Housing counseling assistance is authorized
under Section 106 of the Housing and Urban Development Act of 1968 (P.L. 90-
448). HUD provides competitive grants to local housing counseling agencies,
intermediaries, and state Housing Finance Agencies to provide several categories of
housing counseling, including comprehensive counseling, counseling services that
address predatory lending, counseling in conjunction with HUD’s Homeownership
Voucher Program, counseling services that specifically target colonias (rural
communities on the U.S.-Mexico border), and Home Equity Conversion Mortgage
counseling.
Table 12. The HOME Investment Partnership Program,
FY2006-FY2007
(in millions of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
HOME (total)
$1,757
$1,917
$1,917
$1,942
Formula grantsa
1,680
1,803
1,837
1,862
American Dream Downpayment Initiative
25
100
25
25
HOME/CHDO technical assistance
10
10
10
9
Housing counseling assistance
42
b
42
42
Working capital fund transfer
1
3
3
4
Source: See Table 2.
Note: Totals may not add due to rounding.
a. Includes funding for insular areas, which received $3.4 million in FY2006, and for which the
President requested $3.6 million in FY2007. The House bill does not specify an amount for
insular areas.
b. The FY2007 budget would fund Housing Counseling at $45 million in a separate account; see line
item in Table 2.
Formula Grants. The President has proposed an increase of 7% in funding
for HOME formula grants. This increase follows a decrease of 6% from FY2005 to
FY2006. The FY2007 requested level would be less than a 1% increase over the
FY2005 enacted level ($1,789 million). The House-passed bill would fund formula
grants at $1,837 million, an increase of 2% over the President’s request, 9% over the
FY2006 enacted level, and 3% over the FY2005 level. The Senate committee-passed
bill includes a larger increase for formula grants than does the House bill. The
Senate committee-bill would provide a 3% increase over the President’s request, an
11% increase over the FY2006 level, and a 4% increase over the FY2005 level.
American Dream Downpayment Initiative. From FY2002-FY2006, the
President requested funding for the ADDI at an annual level of $200 million; each
year, Congress funded it below the President’s request. At its highest, ADDI was
funded at $87 million (FY2004); at its lowest, ADDI was funded at $25 million
(FY2006). For FY2007, the President has requested that Congress fund the program
at $100 million, half of what he has requested in the past but four times as much as

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CRS-22
Congress provided in FY2006. The House-passed and Senate committee-passed bills
would fund ADDI at $25 million.
Housing Counseling Assistance. Since FY2003, the President has
requested that Congress provide funding for housing counseling assistance in a
separate account, rather than as a set-aside within the HOME program. Each year,
Congress has rejected that proposal and funded the program as a set-aside within
HOME. While the FY2007 budget does not explain the desire to move the program,
one factor may be that the HOME program is within the jurisdiction of the Assistant
Secretary for Community Planning and Development, while housing counseling
assistance is currently administered by the Assistant Secretary for Housing. If it were
funded in a separate account, the account would be within the jurisdiction of the
Assistant Secretary for Housing. The House-passed and Senate committee-passed
bills would continue funding for Housing Counseling assistance within the HOME
account. Each would provide $42 million for FY2007, even with the FY2006
enacted level and $3 million less than the President’s request.
Self Help and Assisted Homeownership. Under the Self-Help
Homeownership Opportunity Program (SHOP), HUD makes grants to national and
regional organizations and consortia that have experience in providing or facilitating
self-help homeownership opportunities. Prospective home buyers and volunteers
provide “sweat equity” by contributing labor toward the construction of their homes.
For FY2007, the Administration is requesting a $19.9 million increase in SHOP
funding, but is proposing no funding for capacity building under the National
Community Development Initiative or for several nonprofit organizations that
received funding in FY2006. The House bill would fund the Self Help and Assisted
Homeownership program at the same overall level as FY2006, although the funds
would be distributed differently. The Senate bill would appropriate $66 million for
account activities. This is just under $6 million more than appropriated in FY2006
or recommended by the House, and is used to fund several initiatives proposed for
elimination in the President’s budget and the House bill.

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CRS-23
Table 13. Self Help and Assisted Homeownership,
FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com
Self Help and Assisted Homeownershipa
$60,390
$39,700
$60,390
$66,000
Self Help Homeownership (SHOP)
19,800
39,700
21,920
23,000
Capacity Building
29,700
0
32,000
35,000
Housing Assistance Council
2,970
0
3,500
3,500b
National Housing Development Corp.
1,980
0
1,980
0
Technical Assistance
0
0
990
0
National American Indian Housing
990
0
0
2,000
Council
Special Olympics
990
0
0
0
National Council of La Raza
3,960
0
0
2,500
Source: See Table 2.
a. Prior to FY2006, these programs were funded as set-asides in the Community Development Fund
(see Table 9).
b. This includes $31 million for LISC and Enterprise Foundation, and $4 million for Habitat for
Humanity.
Homeless Programs. Homeless Assistance Grants is the blanket title given
to the four homeless programs authorized by the McKinney-Vento Homeless
Assistance Act (P.L. 100-77) and administered by HUD. Three of the four programs
are competitive grant programs: the Supportive Housing Program (SHP), the Shelter
Plus Care program (S+C), and the Section 8 Moderate Rehabilitation Assistance for
Single Room Occupancy program (SRO). Funding for the fourth HUD program, the
Emergency Shelter Grants program (ESG), is distributed via a formula allocation to
states and local communities.
Table 14. HUD Homeless Programs, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Homeless Assistance Grants
$1,326,600
$1,536,000
$1,536,000
$1,511,190
Formula and Competitive Grants
1,314,053
1,298,380
1,523,130
1,498,320
Technical Assistance/Data
11,557
10,395
10,395
10,395
Working Capital Fund
990
2,475
2,475
2,475
Samaritan Initiative
0
200,000
0
0
Prisoner Re-entry Initiative
0
24,750a
0
0
Source: See Table 2.
a. Funds for the Prisoner Re-entry Initiative would be transferred from HUD to the Department of
Labor.

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CRS-24
On June 14, 2006, the House of Representatives passed the HUD funding bill
(H.R. 5576), which would allocate $1.5 billion to the Homeless Assistance Grants,
the same amount proposed by the Administration, and an increase of just under $210
million over FY2006. However, while the Administration’s budget proposal
contained funding for two new programs — the Samaritan Initiative and the Prisoner
Re-Entry Initiative — the House version of the HUD funding bill does not contain
funding for these two programs. The Senate Appropriations Committee’s version of
H.R. 5576, which was reported to the Senate on July 26, 2006, would allocate
approximately $25 million less to the Homeless Assistance Grants than the
President’s request and the House proposal, but would still increase total funding
over FY2006 by nearly $185 million. Like the House version of H.R. 5576, the
Senate Appropriations Committee version would not fund the Samaritan Initiative
and the Prisoner Re-Entry Initiative.
In addition, for the fourth year in a row, the Administration’s budget called for
the consolidation of the three competitive Homeless Assistance Grants — S+C, SHP,
and SRO — into one grant. Both S. 1801, introduced on September 29, 2005, and
H.R. 5041, introduced on March 29, 2006, would consolidate the three programs.
Housing Programs for the Elderly and the Disabled. Formerly known
together as Housing for Special Populations, the Section 202 housing for the elderly
program and the Section 811 housing for the disabled program provide capital grants
and ongoing project rental assistance contracts (PRAC) to developers of new
subsidized housing for these populations. In addition, the Section 811 program
provides vouchers for tenants with disabilities to use in the private housing market.

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CRS-25
Table 15. Sections 202 and 811, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Housing for the Elderly (202)
$734,580
$545,490
$746,580
$750,000
Section 202 New Capital Grants and
597,856
414,843
615,900
— a
PRAC
Section 202 PRAC Renewals
36,932
44,517
44,550
— a
Service coordinators
51,084
59,400
59,400
59,400
Grants for conversion to assisted living
24,552
24,750
24,750
24,750
Pre-development grants
19,800
0
0
20,000
Working Capital Fund
396
1,980
1,980
1,980
Intergenerational Housing
3,960
0
0
0
Demonstration
Housing for the Disabled (811)
$236,610
$118,800
$239,610
$240,000
New Capital Grants and PRAC
140,364
13,210
148,875
— a
PRAC Renewal and Amendments
13,383
15,005
15,000
— a
New Mainstream Vouchers
4,950
14,850
0
5,000
Mainstream Voucher Renewal
77,517
74,745
74,745
— a
Working Capital Fund
396
990
990
990
Source: See Table 2.
a. The amount is not specified.
The Administration’s budget proposed to reduce funding for the housing for the
elderly program from $735 million in FY2006 to $545 million in FY2007, a cut of
almost 26%. However, the House-passed version of the HUD funding bill (H.R.
5576) would fund the program at approximately $747 million, about $12 million
more than FY2006. Before the bill went to the House floor, it contained $735
million for housing for the elderly, but an amendment (H.Amdt. 1020), passed by a
vote of 335 to 90, added $12 million to the Section 202 program. Both the
President’s budget and the House-passed version of H.R. 5576 would increase
funding for service coordinators, from $51 million to $59 million, while grants for
conversion to assisted living facilities would remain approximately the same at just
under $25 million. The Senate Appropriations Committee’s version of H.R. 5576
would increase funding above the House-approved amount by just under $3.5
million, to $750 million, and would provide identical amounts for service
coordinators and the assisted living conversion program.
For the second year in a row, the Administration’s budget proposed to cut in half
funding for the Section 811 program, to $119 million from $237 million in FY2006.
However, H.R. 5576, as passed by the House, would increase funding by
approximately $120 million more than the President’s proposal, and $3 million more
than the FY2006 appropriation, to nearly $240 million. The House added $3 million
more to the Section 811 program than was originally contained in H.R. 5576 before

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CRS-26
it went to the floor through H.Amdt. 1020. Unlike funding for FY2006, though, the
House version of H.R. 5576 would not provide any funding for new Section 811
vouchers, down from approximately $5 million in FY2006. The Senate
Appropriations Committee’s version of H.R. 5576 would slightly increase funding
over the House-passed version, and would provide $5 million for new vouchers.
Federal Housing Administration (FHA). The FHA administers a variety
of mortgage insurance programs that insure lenders against loss from loan defaults
by borrowers. Through FHA insurance, lenders make loans that otherwise may not
be available, and enable borrowers to obtain loans for home purchase and home
improvement, as well as for the purchase, repair, or construction of apartments,
hospitals, and nursing homes. The programs are administered through two program
accounts — the Mutual Mortgage Insurance/Cooperative Management Housing
Insurance fund account (MMI/CMHI) and the General Insurance/Special Risk
Insurance fund account (GI/SRI). The MMI/CMHI fund provides insurance for home
mortgages. The GI/SRI fund provides insurance for more risky home mortgages, for
multifamily rental housing, and for an assortment of special-purpose loans such as
hospitals and nursing homes.
The budget proposed comprehensive reform of the FHA single family insurance
program to enable FHA to be more flexible in responding to changes in the mortgage
market, and to provide a lower cost alternative to borrowers who might otherwise
choose subprime mortgage products or even become the victims of predatory lending.
The budget assumes budget savings from transferring several single-family housing
programs from the GI/SRI fund to the MMI fund. Neither version of H.R. 5576
assumes the transfer of these programs.
Many of the Administration’s reform proposals were included in H.R. 5121, as
passed by the House. An administrative provision in the House-passed version of
H.R. 5576 includes language from H.R. 5121. It would amend the National Housing
Act (12 U.S.C. 1709(b)(2)) to limit FHA-insured home loans to the lesser of the
median price for the area or the Federal Home Loan Mortgage Corporation (Freddie
Mac) conforming loan limit.6 The loan limit for low-cost areas would be raised from
48% to 65% of the Freddie Mac limit. FHA would have authority to insure 100%
mortgages, and HUD would be permitted to determine what, if any, down payment
would be required based upon the likelihood of borrower default. The borrower’s
mortgage insurance premium would be based upon the risk that the borrower poses
to the mortgage insurance fund.
The Senate committee does not include these provisions because the committee
does not believe that the proposal includes the necessary reforms to allow HUD to
compete on the private market without increased financial risk to the FHA insurance
fund and without subjecting the program to significant fraud and abuse. The
committee is concerned that the proposals would move FHA closer to becoming the
lender of last resort.
6 Under present law the loan limit is the lesser of 95% of the median home price for the area
or 87% of the Freddie Mac limit.

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CRS-27
The budget and both versions of H.R. 5576 would limit FHA mortgage
insurance to $220 billion in FY2007. The total includes $185 billion in commitments
under the MMI/CHMI account and $35 billion under the GI/SRI account. In
addition, both funds would be able to make up to $50 million in direct loans to
facilitate the sale of HUD-owned properties for occupancy or ownership by low- and
moderate-income families. An appropriation of $8.6 million is requested for the
credit subsidies associated with the GI/SRI account.
Table 16. Federal Housing Administration, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Net Total FHA Appropriations
$(920,597)
$81,674
$(134,686)
$71,647
Net Appropriations — MMI
(894,576)
(120,150)
30,850
227,850
Total Expenses
414,442
413,850
403,850
403,850
Offsetting receipts
(1,309,000)
(176,000)
(176,000)
(176,000)
Move programs to GI/SRI
n/a
(358,000)
n/a
n/a
FHA modernization & reform
n/a
n/a
(197,000)
n/a
Net Appropriations — GI/SRI
(26,021)
201,797
(165,536)
(156,203)
Total Expenses
304,267
311,197
310,464
319,797
Offsetting receipts
(339,000)
(476,000)
(476,000)
(476,000)
Move programs from MMI
n/a
358,000
n/a
n/a
Credit Subsidy
8,712
8,600
8,600
8,600
Source: See Table 2.
Government National Mortgage Association (Ginnie Mae). Ginnie
Mae is the entity within HUD that guarantees the timely payment of principal and
interest on securities backed by mortgages insured or guaranteed by FHA, the
Department of Veterans Affairs (VA), or the Rural Housing Service. The budget is
requesting $10.6 million for the administrative expenses of carrying out the
mortgage-backed securities program.
The Administration is proposing that the administrative expense be made
discretionary instead of mandatory. It is also proposing that issuers of Ginnie Mae
securities be charged an upfront fee to offset the administrative expense of the
program. Both versions of the bill would authorize Ginnie Mae to issue
commitments that total no more than $100 billion.

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CRS-28
Table 17. Government National Mortgage Association,
FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Net Appropriations
($357,300)
($163,300)
($170,300)
(170,300)
Total Expenses
10,700
60,700a
10,700
10,700
Offsetting Receipts
(368,000)
(224,000)a
(181,000)
(181,000)
Source: See Table 2.
a. Assumes adoption of a legislative proposal that would cost $43 million in administrative
expenses and would be offset by $43 million in fees paid by issuers of Ginnie Mae securities.
Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO
is the office within HUD that is responsible for regulating the safety and soundness
of Fannie Mae’s and Freddie Mac’s operations. The appropriations for OFHEO are
completely offset by fees collected from Fannie Mae and Freddie Mac. In recent
years, OFHEO has been criticized as ineffective in its role. The Administration’s
budget expects OFHEO will be transferred to a new, strengthened regulator. H.R.
1461, as passed by the House, would combine OFHEO and HUD’s regulatory
division into a new independent agency called the Federal Housing Finance Agency.
The House-passed bill would appropriate $62 million for OFHEO, while the
Senate Appropriations Committee recommends 67.6 million.
Fair Housing. The Office of Fair Housing and Equal Opportunity enforces
the Fair Housing Act and other civil rights laws that make it illegal to discriminate
in the sale, rental, or financing of housing based on race, color, religion, sex, national
origin, disability, or family status. This is accomplished through the Fair Housing
Assistance Program (FHAP) and the Fair Housing Initiatives Program (FHIP).
FHAP provides grants to state and local agencies to enforce laws that are
substantially equivalent to the federal Fair Housing Act. It provides grants on a non-
competitive basis. FHIP provides funds for public and private fair housing groups,
as well as state and local agencies, for activities that educate the public and housing
industry about the fair housing laws.
Table 18. Fair Housing Programs, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Fair Housing
$45,740
$44,550
$44,550
$45,540
Fair Housing Assistance
25,740
24,750
25,750
19,800
Fair Housing Initiatives
20,000
19,800
18,800
24,759
Source: See Table 2.

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CRS-29
As requested by the budget, both versions of H.R. 5576 would fund the Fair
Housing and Equal Opportunity program at $44.55 million. The budget requests
$24.75 million for the Fair Housing Assistance program, a decrease of $990,000 from
the FY2006 level. The House-passed version of H.R. 5576 would fund the program
at $25.75 million, while the version passed by the Senate committee would fund the
program at $19.8 million. The budget requests $19.8 million for the Fair Housing
Initiatives program, a $200,000 decrease from the FY2006 level. The House bill
would decrease the funding even more, and fund the program at $18.8 million. The
Senate committee would fund the program at $24.6 million. The budget assumes that
legislation will be introduced and enacted that will enable HUD to collect tuition fees
from participants in the National Fair Housing Training Academy. In response, the
House bill provides that HUD may assess and collect fees to cover the cost of the
Fair Housing Training Academy.
Lead-Based Paint Hazard Reduction. The Office of Lead Hazard Control
at HUD administers both the Lead-Based Paint Hazard Control Grant Program and
the Healthy Homes Initiative (HHI), designed to reduce the hazards of lead-based
paint in homes.
For FY2007, the budget requests $114.8 million for the program, the House-
passed bill appropriates $114.8 million, and the Senate committee appropriates $152
million.
Table 19. Lead-Based Paint Hazard Control, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Office of Lead Hazard Control
$150,480
$114,840
$114,840
$152,000
Source: See Table 2.
Research and Technology. The Office of Policy Development and
Research (PD&R) at HUD is responsible for maintaining current information on
housing needs, market conditions, and existing programs, as well as conducting
research on priority housing and community development issues. The Research and
Technology account funds PD&R’s core research. Beginning in FY2006, the account
was expanded to fund the Section 107 University Partnerships, which were
previously funded as set-asides within the CDF account. Section 107 grants are
awarded to institutions of higher education to assist them in building partnerships
with the communities in which they are located to foster and achieve neighborhood
development and revitalization. The funds are also used to support a work study
program for disadvantaged and minority students in graduate-level community
building curricula. The Administration request did not set aside funding for the
PATH (Partnership in Advancing Technology in Housing) program, but requested
that it remain an eligible activity under the Research and Technology account. The
House and Senate bills include $5 million for PATH.

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CRS-30
Table 20. Research and Technology, FY2006-FY2007
(in thousands of dollars)
FY2006
FY2007
FY2007
FY2007
enacted
request
House
S. Com.
Research and Technology
$55,786
$68,360
$55,787
$60,000
Core Research and Technology
35,392 39,650
30,393
34,400
PATH
4,950
a
5,000
5,000
Section 107 Grants
20,394
28,710
20,394
20,600
Historically Black Colleges & Universities
8,910
8,910
b
9,000
Hispanic-Serving Institutions
5,940
5,940
b
6,000
Community Development Work Study
0
2,376
b
0
Alaskan Native and Native Hawaiian-
2,970
2,970
b
3,000
Serving Institutions
Tribal Colleges and Universities
2,574
2,574
b
2,600
Community outreach partnership
0
5,940
b
0
crsphpgw
Source: See Table 2.
a. The President did not request a set-aside amount of funding for PATH, but noted that it remains an
eligible activity under Core Research and Technology.
b. Amount not specified.

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