Order Code RL33344
The Department of Housing and
Urban Development: FY2007 Budget
Updated March 2, 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, just over the FY2006 level (not including FY2006
supplementals related to Hurricane Katrina). HUD’s FY2007 budget summary stated
that the budget intended to use “taxpayer money more wisely” and “reform programs
in need of repair.”
The President’s budget would have increased funding for the Section 8 Housing
Choice Voucher program from $15.4 billion in FY2006 to $15.9 billion in FY2007.
It proposed 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 also would
have eliminated 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 proposed cutting 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 have increased 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 have increased funding for the four Homeless Assistance
Grants by $209 million, and provided funding for two new initiatives: the Samaritan
Initiative for the chronically homeless and the Prisoner Re-entry Initiative. The
President’s budget proposed to cut in half funding for the Section 811 Housing for
the Disabled program, as proposed in FY2006. The FY2007 budget would have
provided $119 million for Section 811, down from $237 million in FY2006.
Funding for the Section 202 Housing for the Elderly program would have been
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 funded 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 have provided over $2 billion more for HUD than the President’s request
and the House bill, increased funding for Public Housing and restored 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. On February 15, 2007, Congress approved a revised year-
long continuing resolution, funding most accounts at their FY2006 level (P.L. 110-5).
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FY2007 Budget Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Budget Pressures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Tenant-Based Rental Assistance (Section 8 Vouchers) . . . . . . . . . . . . . 6
Section 8 Project-Based Rental Assistance . . . . . . . . . . . . . . . . . . . . . 10
Housing Certificate Fund Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Public Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Native American Block Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Housing for Persons with AIDS (HOPWA) . . . . . . . . . . . . . . . . . . . . 16
Rural Housing and Economic Development . . . . . . . . . . . . . . . . . . . . 16
Community Development Fund/Block Grants . . . . . . . . . . . . . . . . . . 17
CDBG Section 108 Loan Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . 20
Brownfields Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
The HOME Investment Partnership Program . . . . . . . . . . . . . . . . . . . 21
Self Help and Assisted Homeownership . . . . . . . . . . . . . . . . . . . . . . . 23
Homeless Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Housing Programs for the Elderly and the Disabled . . . . . . . . . . . . . . 25
Federal Housing Administration (FHA) . . . . . . . . . . . . . . . . . . . . . . . 27
Government National Mortgage Association (Ginnie Mae) . . . . . . . . 28
Office of Federal Housing Enterprise Oversight (OFHEO) . . . . . . . . . 29
Fair Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Lead-Based Paint Hazard Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Research and Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
List of Tables
Table 1. Department of Housing and
Urban Development Appropriations, FY2002-FY2006 . . . . . . . . . . . . . . . . 3
Table 2. Appropriations: Housing and Urban Development,
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 3. Section 8 Tenant-based Rental Assistance (Vouchers),
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 4. Section 8 Project-based Rental Assistance,
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 5. Public Housing, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 6. Native American Block Grants, FY2006-FY2007 . . . . . . . . . . . . . . . . 15
Table 7. HOPWA, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 8. Rural Housing and Economic Development,
FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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Table 9. Community Development Fund (CDF):
Community Development Block Grants (CDBG)
and Related Set-Asides, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table 10. CDBG Section 108 Loan Guarantees, FY2006-FY2007 . . . . . . . . . . 20
Table 11. Brownfields Redevelopment, FY2006-FY2007 . . . . . . . . . . . . . . . . . 21
Table 12. The HOME Investment Partnership Program, FY2006-FY2007 . . . . 22
Table 13. Self Help and Assisted Homeownership, FY2006-FY2007 . . . . . . . . 24
Table 14. HUD Homeless Programs, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . 24
Table 15. Sections 202 and 811, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . . . 26
Table 16. Federal Housing Administration, FY2006-FY2007 . . . . . . . . . . . . . . 28
Table 17. Government National Mortgage Association, FY2006-FY2007 . . . . 29
Table 18. Fair Housing Programs, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . . . 29
Table 19. Lead-Based Paint Hazard Control, FY2006-FY2007 . . . . . . . . . . . . . 30
Table 20. Research and Technology, FY2006-FY2007 . . . . . . . . . . . . . . . . . . . 31

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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
FY2007 appropriations legislation enacted. On February 15, 2007,
President Bush signed a revised year-long continuing resolution into law (P.L. 110-
5). With some exceptions, the act funds accounts at their FY2006 levels. Those
exceptions include funding a number of HUD programs at levels higher than those
enacted in FY2006:
! Tenant Based Rental Assistance: $15,920 million
! Project-Based Rental Assistance: $5,976 million
! Public Housing Operating Fund: $3,864 million
! Indian Housing Loan Guarantee: $6 million
! Homeless Assistance Grants: $1,442 million
! Salaries and Expenses: the FY2006 levels, plus such sums as
necessary to meet 50% of the need for cost-of-living increases for
federal employees
The act funds three HUD accounts below their FY2006 level:
! Self Help Homeownership: $49 million
! Research and Technology: $50 million
! Community Development Fund: $3,772 million
The decrease in funding for the Community Development Fund does not
decrease funding for the primary program funded by the account, the Community
Development Block Grant (CDBG) program. Instead, the decline can be attributed
to the Congress’s decision not to fund the Economic Development Initiatives (EDI)
program that is also funded under that account. The EDI account has traditionally
been a source of funding for congressionally driven projects, or earmarks.
The remainder of this report is not yet updated to reflect enactment of P.L. 110-
5. It will be updated when committee estimates of the FY2007 enacted levels
become available.
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, 2006, and
signed into law on September 29, 2006 (P.L. 109-289). It funded HUD programs

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CRS-2
— through November 17, 2006 — at the lower of the House-passed or FY2006
enacted funding level. Programs that received funding in FY2006, but were not
slated to receive any funding under the House-passed bill, were 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 extended the original CR through February 15, 2007. 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.
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.

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CRS-3
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.)
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.)

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CRS-4
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.
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
1 As can be seen in Table 16, the House bill assumes that FHA will find additional
administrative savings.

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CRS-5
FY2006
FY2007
FY2007
FY2007
Program
enacted
request
House
S. Com.
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
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

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CRS-6
FY2006
FY2007
FY2007
FY2007
Program
enacted
request
House
S. Com.
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 requested 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 included $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 continued 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 assumed 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 would cost $43 million,
but its costs would be offset by an additional $43 million in offsetting receipts. The House and
Senate bills did 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 requested that Congress rescind the full amount it provided in
FY2006 for Economic Development Initiative and Neighborhood Initiative earmarks within the
CDF account.
n. The CR appropriates such sums as may be necessary to fund 50% of the cost of the statutory cost-
of-living increase approved for FY2007. It is unclear at this time how much HUD will receive
under this provision.
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

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CRS-7
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-8
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 requested $14.4 billion for voucher renewals,
an increase of 3.5% over FY2006. Most of these funds ($14.3 billion) would have
been 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 have been 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 request would have removed a clause included in the FY2006 appropriations
law requiring that the entire amount of funding for renewals be obligated up front.
It also would have lifted 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 have been 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-9
The House-passed bill provided $70 million more than the President requested
for voucher renewals, and would have distributed 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 have funded voucher renewals at the President’s request, but
adopted a different formula for allocating the funds. The Secretary would have been
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
have then been prorated to fit within the amount appropriated. Moving to Work
agencies would have been funded according to their agreements. Up to $100 million
would have been made available to adjust agency budgets for significant increases
in renewal costs resulting from unforseen exigencies or from portability vouchers.3
Agencies would have continued 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 have been 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 have been set aside for special fees in FY2007
(only $10 million was set aside in FY2006), the base administrative fees would have
only increased by 2%.
The House-passed version of the HUD funding bill would have 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 have 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 have been reduced by
almost 10%.
The Senate Appropriations Committee-passed version of the bill would have
provided just under $1.3 billion for administrative fees. The funds would have been
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
have been set aside for the Secretary to allocate to PHAs needing extra funds to
administer their programs. Under the Senate bill, base administrative fees would
have been 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-10
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 requested $149 million for tenant protection
vouchers and also requested the authority to supplement the amount provided with
amounts recaptured from unobligated Section 8 balances. In a change of past policy,
the President proposed providing 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 adopted the President’s request for tenant protection vouchers.
The Senate committee-passed bill would have funded tenant protection vouchers
at the President’s requested level; however, it would not have limited 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 contained
$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-11
Contract Renewals. The President’s budget included a request for a 13%
increase in project-based renewal funding for FY2007. The level of funding
requested was 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 would have provided $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 have funded 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 was
a decrease from the FY2006 enacted level, but the Administration 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 depends 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 have funded 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 requested that Congress rescind $2 billion from
the HCF, and again requested the authority to meet the rescission from other sources
if sufficient funds are not available within the HCF. The House bill matched the
President’s request. The Senate committee-passed version would also have rescinded
$2 billion; however, the bill included 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 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-12
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 were
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 proposed no new funding for HOPE VI and requested that
Congress rescind the full amount provided to the program in FY2006.

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CRS-13
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 asked 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 requested for operating
subsidies was not enough to fund agencies at 100% of their eligibility. Rather, HUD
estimated that agencies would receive only 85% of their eligible budget, compared
to just under 89% in FY2005. Some advocates contend that the final proration would
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 requested 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 have funded the account at the President’s request.
The Senate committee-passed bill would have provided a $100 million increase in
funding for formula grants, but would not have funded the self-sufficiency initiative.
The Senate bill provided $30 million to aid small PHAs in adjusting to the new
operating fund formula. Language in the administrative provisions portion of the bill
would have delayed 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 specified 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 came 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-14
The President’s budget included 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 changed the structure of the grants to expand
eligible activities. As in FY2006, the President’s budget also proposed 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 would be distributed via the Capital
Fund formula or though the competitive HOPE VI program.
The Senate committee-passed bill would have increased the Capital Fund to just
above the FY2006 level. Formula grants were increased slightly over the FY2006
level, which was almost $300 million more than the President’s request and the
House-passed level. The bill would have funded ROSS at $30 million, $6 million
more than the President requested, 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
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
were 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 have
funded HOPE VI at $100 million, nearly level with FY2006 funding. It did 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-15
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 have funded 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 required 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 directed HUD to reassess the decision through notice and comment
rulemaking.
The Senate Appropriations Committee noted 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 provided $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-16
An administrative provision in both versions of the bill would have required 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 have funded 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 have provided $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-17
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 argued 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 did not contain funds for the Rural Housing and Economic Development
program, while the Senate version would have funded 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 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 would 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-18
! 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 proposed 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 have been funded at
just under $3 billion in FY2007. The budget also requested $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
included $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 included $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-19
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 recommended 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 have rescinded any unobligated
balances remaining from EDI and NI funds appropriated in FY2006. The House-
passed version of H.R. 5576 would have appropriated $250 million for EDI earmarks
and $20 million for NI projects. In addition, recipients of EDI and NI funding would
have been required to provide 40% in matching funds, which would have been a new
requirement for the programs. The Senate Appropriations Committee also
recommended $250 million in EDI funding, but recommended $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-20
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 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 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 requested 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 have appropriated more than $2.9 million
for the program for FY2007. Funding for the program would have been 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
recommended $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-21
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 have appropriated $15 million for the
program for FY2007. Funding for the brownfield program would have been 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 did 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),

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CRS-22
funds HOME grantees to provide downpayment, closing cost, and rehabilitation
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 did 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 proposed an increase of 7% in funding for
HOME formula grants. This increase followed a decrease of 6% from FY2005 to
FY2006. The FY2007 requested level was less than a 1% increase over the FY2005
enacted level ($1,789 million). The House-passed bill would have funded 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 included a larger increase for formula grants than did the House bill. The Senate
committee-bill would have provided 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 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-23
Congress provided in FY2006. The House-passed and Senate committee-passed bills
would have funded 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 have continued funding for Housing Counseling assistance within the
HOME account. Each would have provided $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 requested a $19.9 million increase in SHOP
funding, but proposed 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 have funded the Self Help and
Assisted Homeownership program at the same overall level as FY2006, although the
funds would be distributed differently. The Senate bill appropriated $66 million for
account activities. This is just under $6 million more than appropriated in FY2006
or recommended by the House, and would have been used to fund several initiatives
proposed for elimination in the President’s budget and the House bill.

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CRS-24
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-25
On June 14, 2006, the House of Representatives passed the HUD funding bill
(H.R. 5576), which would have allocated $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 did 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 have
allocated approximately $25 million less to the Homeless Assistance Grants than the
President’s request and the House proposal, but would have still increased total
funding over FY2006 by nearly $185 million. Like the House version of H.R. 5576,
the Senate Appropriations Committee version did 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-26
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 have funded 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 have increased
funding for service coordinators, from $51 million to $59 million, while grants for
conversion to assisted living facilities would have remained approximately the same
at just under $25 million. The Senate Appropriations Committee’s version of H.R.
5576 would have increased funding above the House-approved amount by just under
$3.5 million, to $750 million, and would have provided 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 have increased 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-27
it went to the floor through H.Amdt. 1020. Unlike funding for FY2006, though, the
House version of H.R. 5576 did 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 have slightly increased
funding over the House-passed version, and would have provided $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 assumed budget savings from transferring several single-family housing
programs from the GI/SRI fund to the MMI fund. Neither version of H.R. 5576
assumed 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 have amended 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 have
been raised from 48% to 65% of the Freddie Mac limit. FHA would have had
authority to insure 100% mortgages, and HUD would have been 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 have been
based upon the risk that the borrower poses to the mortgage insurance fund.
The Senate committee did 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-28
The budget and both versions of H.R. 5576 would have limited 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 have been 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 was 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 proposed that the administrative expense be made
discretionary instead of mandatory. It also proposed 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 have authorized Ginnie Mae to issue
commitments that total no more than $100 billion.

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CRS-29
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 expected OFHEO to be transferred to a new, strengthened regulator. H.R.
1461, as passed by the House, would have combined OFHEO and HUD’s regulatory
division into a new independent agency called the Federal Housing Finance Agency.
The House-passed bill would have appropriated $62 million for OFHEO, while
the Senate Appropriations Committee recommended $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-30
As requested by the budget, both versions of H.R. 5576 would have funded the
Fair Housing and Equal Opportunity program at $44.55 million. The budget
requested $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
have funded the program at $25.75 million, while the version passed by the Senate
committee would have funded the program at $19.8 million. The budget requested
$19.8 million for the Fair Housing Initiatives program, a $200,000 decrease from the
FY2006 level. The House bill would have decreased the funding even more, to
$18.8 million. The Senate committee would have funded the program at $24.6
million. The budget assumed that legislation would be introduced and enacted that
would enable HUD to collect tuition fees from participants in the National Fair
Housing Training Academy. In response, the House bill provided 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 requested $114.8 million for the program, the House-
passed bill would have appropriated $114.8 million, and the Senate committee would
have appropriated $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 included $5 million for PATH.

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CRS-31
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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