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Department of Housing and Urban
Development: FY2016 Appropriations
Maggie McCarty, Coordinator
Specialist in Housing Policy
Libby Perl
Specialist in Housing Policy
Katie Jones
Analyst in Housing Policy
Eugene Boyd
Analyst in Federalism and Economic Development Policy
June 11, 2015
Congressional Research Service
7-5700
www.crs.gov
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Department of Housing and Urban Development: FY2016 Appropriations
Summary
Most of the funding for the activities of the Department of Housing and Urban Development
(HUD) comes from discretionary appropriations provided each year in the annual appropriations
acts, typically as a part of the Transportation, HUD, and Related Agencies appropriations bill
(THUD). HUD’s programs are primarily designed to address housing problems faced by
households with very low incomes or other special housing needs.
On May 13, 2015, the House Appropriations Committee reported its version of the FY2016
THUD appropriations bill, H.R. 2577 (H.Rept. 114-129). It was approved by the full House on
June 9, 2015. For HUD, it included the following:
• $46.4 billion in gross appropriations, which is approximately $1 billion more in
appropriations than was provided in FY2015 but $3 billion less than requested by
the President.
• $37.7 billion in net budget authority, reflecting savings from offsets and other
sources, which is $2 billion more than FY2015 ($1 billion more in appropriations
and $1 billion less in savings available from offsets).
• A 15% cut in funding for HOME relative to FY2015, with a provision to
supplement that amount by diverting any funding for the Housing Trust Fund to
the HOME program.
• Roughly level funding for the Community Development Block Grant (CDBG)
program relative to FY2015, rejecting a cut proposed in the President’s budget.
• Funding cuts (relative to FY2015) for Choice Neighborhoods (-75%) and the
Public Housing Capital Fund (-10%).
• Funding increases to cover the cost of renewing subsidies in the Section 8 tenant-
based (Housing Choice Voucher) and project-based rental assistance accounts
(+$614 million and +$924 million relative to FY2015). No funding for the new
incremental vouchers that were requested in the President’s budget.
• Rejection of the legislative reforms requested by the President, with reference to
the authorizing committees being most appropriate to consider such reforms.
On February 2, 2015, President Obama released his FY2016 budget request. For HUD, it
included the following:
• $49.3 billion in gross appropriations, which is approximately $4 billion more in
gross appropriations than was provided in FY2015.
• $40.6 billion in net budget authority, reflecting savings from offsets and other
sources, which is $5 billion more than FY2015 ($4 billion more in appropriations
and $1 billion less in savings available from offsets).
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• Increases in funding for most HUD programs, including funding for 67,000 new
incremental Section 8 Housing Choice vouchers.
• A 7% funding cut for CDBG, with a proposal to revisit the way funding is
distributed to communities.
• Several legislative reform proposals affecting the rental assistance programs,
including changes to the way that income is calculated and recertified.
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Contents
Introduction to HUD ........................................................................................................................ 1
FY2015 Enacted Funding Levels .................................................................................................... 2
FY2016 Appropriations ................................................................................................................... 2
House Action ............................................................................................................................. 2
Floor Action ........................................................................................................................ 2
Committee Action ............................................................................................................... 2
President’s Budget ..................................................................................................................... 3
Discussion of Selected FY2016 Funding Issues .............................................................................. 6
Funding for Assisted Housing Programs ................................................................................... 6
Section 8 Tenant-Based Rental Assistance .......................................................................... 6
Section 8 Project-Based Rental Assistance ......................................................................... 8
Public Housing .................................................................................................................... 9
Community Development Funding: The CDF, CDBG, and Section 108 ................................ 11
Administration Request ..................................................................................................... 12
House Appropriations Committee Bill .............................................................................. 13
HOME Investment Partnerships Program ............................................................................... 14
The Federal Housing Administration (FHA) ........................................................................... 15
Offsetting Receipts ............................................................................................................ 15
Appropriations and Commitment Authority ...................................................................... 16
Selected General Provisions .................................................................................................... 16
Tables
Table 1. Department of Housing and Urban Development Appropriations,
FY2011-FY2015 ........................................................................................................................... 1
Table 2. HUD FY2016 Detailed Appropriations ............................................................................. 4
Table 3. Tenant-Based Rental Assistance (Housing Choice Vouchers), FY2015-FY2016 .............. 6
Table 4. Public Housing, FY2015-FY2016 ................................................................................... 10
Table 5. CDBG and Related Appropriations, FY2015 and FY2016 .............................................. 11
Appendixes
Appendix. The Budget Resolution and Discretionary Spending Caps .......................................... 18
Contacts
Author Contact Information........................................................................................................... 19
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Introduction to HUD
Most of the funding for the activities of the Department of Housing and Urban Development
(HUD) comes from discretionary appropriations provided each year in the annual appropriations
acts, typically as a part of the Transportation, HUD and Related Agencies appropriations bill
(THUD). HUD’s programs are primarily designed to address housing problems faced by
households with very low incomes or other special housing needs.
Three rental assistance programs—Public Housing, Section 8 tenant-based rental assistance
(which funds Section 8 Vouchers), and Section 8 project-based rental assistance—account for the
majority of the department’s funding (more than three-quarters of total HUD appropriations in
FY2015). Two flexible block grant programs—HOME and the Community Development Block
Grant (CDBG) program—help communities finance a variety of housing and community
development activities designed to serve low- and moderate-income families. In addition, in some
years Congress appropriates funds to CDBG to assist in disaster recovery. Other more specialized
grant programs help communities meet the needs of homeless persons, including those living with
HIV/AIDS. HUD’s Federal Housing Administration (FHA) insures mortgages made by lenders to
home buyers with low down payments and to developers of multifamily rental buildings
containing relatively affordable units. FHA collects fees from insured borrowers, which are used
to sustain the insurance fund. Surplus FHA funds have been used to offset the cost of the
HUD budget.
Table 1 presents total net enacted appropriations for HUD over the past five years, including
emergency appropriations, rescissions, offsetting collections, and receipts. (For more information,
see CRS Report R42542, Department of Housing and Urban Development (HUD): Funding
Trends Since FY2002, by Maggie McCarty.)
Table 1. Department of Housing and Urban Development Appropriations,
FY2011-FY2015
(Net budget authority in billions of dollars)
FY2011
FY2012
FY2013
FY2014
FY2015
41.11 37.43a 46.63b 32.81 35.62
Source: Figures for FY2011-FY2012 and FY2014-FY2015 are taken from tables produced by the House
Appropriations Committee. FY2013-enacted funding is from FY2012 enacted, FY2013, and FY2014 President’s
Budget funding table, prepared by HUD.
Notes: Final appropriations levels for any fiscal year include all supplemental appropriations and rescissions.
They do not reflect revised estimates of offsetting receipts. Each year includes advance appropriations for the
subsequent fiscal year, not advance appropriations from the previous fiscal year.
a. FY2012 budget authority includes $100 million in disaster spending provided in the regular appropriations
act.
b. FY2013 budget authority includes $15.2 billion in disaster spending provided through P.L. 113-2. The
amount appropriated was $16 billion, which was then reduced by sequestration. FY2013 budget authority
reflects reductions due to sequestration and a 0.02% rescission required by Section 3004 of P.L. 113-6.
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FY2015 Enacted Funding Levels
On December 16, 2014, the President signed the FY2015 Consolidated and Further Continuing
Appropriations Act (P.L. 113-235), funding most federal agencies, including HUD, for the fiscal
year. The House passed the bill on December 11, 2014, and the Senate passed it on December 13,
2014. Prior to enactment of P.L. 113-235, the government had been funded with three continuing
resolutions (CRs). The first, P.L. 113-164, the FY2015 Continuing Appropriations Resolution,
provided funding from October 1, 2014, through December 11, 2014, at FY2014 levels, less an
across-the-board (ATB) rescission of 0.0554% (unless otherwise specified). Congress enacted two
additional CRs, P.L. 113-202 through December 15, 2014, and P.L. 113-203 through December
17, 2014, before enactment of P.L. 113-235.
P.L. 113-235 provided $45.4 billion in gross discretionary appropriations for HUD programs, not
accounting for savings from offsets and other sources, about $90 million less than in FY2014
($45.5 billion). However, net budget authority was higher than in FY2014, approximately $35.6
billion in FY2015 compared to $32.8 billion in FY2014. This difference was primarily driven by
a decline of about $3 billion in offsetting receipts from the Federal Housing Administration
(FHA) loan insurance program.
FY2016 Appropriations
Table 2 presents account-level funding information for HUD, comparing FY2015 with the
FY2016 President’s budget request and congressional action. It is preceded by a brief summary of
action on FY2016 appropriations and followed by a more detailed discussion of selected issues
and accounts.
House Action
Floor Action
The House began consideration of H.R. 2577 on June 3, 2015, and voted to approve the bill on
June 9, 2015. Several amendments were adopted during floor consideration, including
amendments to increase funding for Housing for Persons with AIDS by $3 million, offset by
reducing funding for information technology; increase funding for Housing for the Elderly by
$2.5 million, offset by decreasing funding for research and development; and redirect HUD fair
housing funding from private to administrative enforcement activities. Amendments were also
adopted to prevent HUD from using funding provided in the bill to implement HUD regulations
related to disparate impact under the Fair Housing Act and Affirmatively Furthering Fair
Housing.
Committee Action
On May 13, 2015, the House Appropriations Committee reported its version of the FY2016
THUD appropriations bill, H.R. 2577 (H.Rept. 114-129). For HUD, it included the following:
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• $46.4 billion in gross appropriations, which is approximately $1 billion more in
appropriations than was provided in FY2015 but $3 billion less than requested by
the President.
• $37.7 billion in net budget authority, reflecting savings from offsets and other
sources, which is $2 billion more than FY2015 ($1 billion more in appropriations
and $1 billion less in savings available from offsets).
• A 15% cut in funding for HOME relative to FY2015, with a provision to
supplement that amount by diverting any funding for the Housing Trust Fund to
the HOME program.
• Roughly level funding for the Community Development Block Grant (CDBG)
program relative to FY2015, rejecting a cut proposed in the President’s budget.
• Funding cuts (relative to FY2015) for Choice Neighborhoods (-75%) and the
Public Housing Capital Fund (-10%).
• Funding increases to cover the cost of renewing subsidies in the Section 8 tenant-
based (Housing Choice Voucher) and project-based rental assistance accounts
(+$614 million and +$924 million relative to FY2015). No funding for the new
incremental vouchers that were requested in the President’s budget.
• Rejection of the legislative reforms requested by the President, with reference to
the authorizing committees being most appropriate to consider such reforms.
President’s Budget
On February 2, 2015, President Obama released his FY2016 budget request. For HUD, it
included the following:
• $49.3 billion in gross appropriations, which is approximately $4 billion more in
gross appropriations than was provided in FY2015.
• $40.6 billion in net budget authority, reflecting savings from offsets and other
sources, which is $5 billion more than FY2015 ($4 billion more in appropriations
and $1 billion less in savings available from offsets).
• Increases in funding for most HUD programs, including funding for 67,000 new
incremental Section 8 Housing Choice vouchers.
• A 7% funding cut for CDBG, with a proposal to revisit the way funding is
distributed to communities.
• Several legislative reform proposals affecting the rental assistance programs,
including changes to the way that income is calculated and recertified.
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Table 2. HUD FY2016 Detailed Appropriations
(In billions of dollars)
FY2015
FY2016 FY2016
Accounts
Enacted Request
House
Appropriations
Salaries and Expenses (Mgmt. & Adm.)
1.314
1.425
1.341
Tenant-Based Rental Assistance (Sec. 8 vouchers)a 19.304
21.123
19.919
Rental Assistance Demonstration
0.000b 0.050 0.000
Public housing capital fund
1.875
1.970
1.681
Public housing operating fund
4.440
4.600
4.440
Choice Neighborhoods
0.080
0.250
0.020
Family Self Sufficiency
0.075
0.085
0.075
Native American housing block grants
0.650
0.660
0.650
Indian housing loan guarantee
0.007
0.008
0.008
Native Hawai an block grant
0.009
0.000c 0.000
Native Hawaiian loan guarantee
0.000d 0.000c 0.000
Housing, persons with AIDS (HOPWA)
0.330
0.332
0.335
Community Development Fund (Including CDBG)
3.066
2.880
3.060
HOME Investment Partnerships
0.900
1.060
0.767e
Self-Help Homeownership
0.050f 0.000g 0.050f
Homeless Assistance Grants
2.135
2.480
2.185
Project-Based Rental Assistance (Sec. 8)h 9.730
10.760
10.654
Housing for the Elderly
0.420
0.455
0.417
Housing for Persons with Disabilities
0.135
0.177
0.152
Housing Counseling Assistancei 0.047
0.060
0.047
Manufactured Housing Fees Trust Fundj 0.010
0.011
0.011
Rental Housing Assistancek
0.018
0.030
0.030
Federal Housing Administration (FHA) Expensesj 0.130
0.174
0.130
Government National Mortgage Assn. (GNMA) Expensesj 0.024
0.029
0.023
Research and technology
0.072
0.050
0.050
Fair housing activities
0.065
0.071
0.065
Office, lead hazard control
0.110
0.120
0.075
Information Technology Fund
0.250
0.334
0.097
Inspector General
0.126
0.129
0.126
Gross Appropriations Subtotal
45.373
49.323
46.407
Rescissions
Drug Elimination Grants
-0.001
0.000
0.000
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FY2015
FY2016 FY2016
Accounts
Enacted Request
House
Rural Housing and Economic Development
0.000
0.000
-0.003
Other (Sec. 233)
0.000
0.000
-0.007
Management and Administration (Sec. 234)
0.000
0.000
-0.002
Youth Build
0.000l 0.000 0.000
Section 108
0.000 0.000 -0.002
Brownfields
-0.003 0.000 0.000
FHA (GI/SRI)
-0.010
0.000
0.000
Rescissions Subtotal
-0.014
0.000
-0.014
Offsetting Collections and Receipts
Manufactured Housing Fees Trust Fund
-0.010
-0.011
-0.011
FHA
-8.863 -7.786m -7.757
GNMA
-0.864 -0.886 -0.886
Offsets Subtotal
-9.737
-8.683
-8.654
Total Budget Authority
35.621
40.640
37.739
Sources: Table prepared by CRS based on FY2015 Consolidated and Continuing Appropriations Act (P.L. 113-
235) and the Explanatory Statement, Congressional Record, vol. 160, part 151—Book II (December 11, 2014),
pp. H9981-H9984 (FY2015 enacted levels); the President’s FY2016 budget documents, including HUD
Congressional Budget Justifications (FY2016-requested levels); H.R. 2577 and H.Rept. 114-129 (FY2016-
requested level and FY2016-House Committee), updated by CRS to reflect floor amendments.
a. The Section 8 tenant-based rental assistance account includes both current-year and advance
appropriations. Typically, Congress appropriates about $4 billion for tenant-based rental assistance for the
subsequent fiscal year in addition to funds for the current year.
b. While no funding was provided for the Rental Assistance Demonstration, the law did raise the cap on the
number of units that can participate in the demonstration from 60,000 to 185,000 and made several other
changes. See Section 234 of HUD General Provisions in P.L. 113-235.
c. The President’s budget does not request funding for the Native Hawai an Housing Block Grant or Native
Hawaiian Loan Guarantee accounts, noting that sufficient carryover balances are available to administer each
program in FY2016.
d. Includes $100,000 for the Native Hawaiian loan guarantee (rounding to less than $1 million).
e. In addition to the funds appropriated in the bill, the House Committee-passed bill would also transfer any
funds provided to the Housing Trust Fund in FY2016 to the HOME program. The Housing Trust Fund is to
be funded through contributions from Fannie Mae and Freddie Mac rather than through appropriations. The
committee report estimates that $133 million could be transferred from the Housing Trust Fund, which
would bring total funding for the HOME account to $900 million, the same as the FY2015-enacted level.
f.
The $50 million for the SHOP account includes $10 million for the SHOP program and $40 million for
capacity building activities
g. The President’s budget proposed providing $10 million for SHOP within the HOME account, rather than in
its own account. Capacity building activities would be funded in the Transformation Initiative account.
h. The Section 8 project-based rental assistance account includes both current-year and advance
appropriations. Typically, Congress appropriates about $400 million for project-based rental assistance for
the subsequent fiscal year in addition to funds for the current year.
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i.
In addition to HUD’s housing counseling assistance program, Congress in recent years has provided funding
specifically for foreclosure mitigation counseling to the National Foreclosure Mitigation Counseling Program
(NFMCP), administered by the Neighborhood Reinvestment Corporation (also known as NeighborWorks
America). NeighborWorks is not part of HUD, but is usually funded as a related agency in the annual HUD
appropriations laws.
j.
Some or all of the cost of funding these accounts is offset by the collection of fees or other receipts, shown
later in this table.
k. The Rental Housing Assistance account is used to provide supplemental funding to some older HUD rent-
assisted properties and, when funding is provided, it is typically offset by recaptures. Funding is not
requested in this account every year.
l.
Includes a rescission of $460,000 in prior-year unobligated balances from the Youth Build program
(rounding to less than $1 million), which was formerly funded in HUD’s budget but is now funded in the
Department of Labor’s budget.
m. Amounts shown here reflect the Congressional Budget Office’s re-estimate of the President’s budget
request; therefore, the figure for the FY2016 budget request differs from what is shown in the President’s
budget documents.
Discussion of Selected FY2016 Funding Issues
Funding for Assisted Housing Programs
More than three-quarters of appropriations for HUD supports three programs: Section 8 tenant-
based rental assistance (which funds Section 8 Housing Choice Vouchers), Section 8 project-
based rental assistance, and the Public Housing program. Together, these three programs serve
more than 4 million low-income households. The following subsections discuss appropriations
for these three programs.
Section 8 Tenant-Based Rental Assistance
The tenant-based rental assistance (TBRA) account funds the Section 8 Housing Choice Voucher
program; it is the largest account in HUD’s budget. Most of the funding provided to the account
each year is for the annual renewal of more than 2 million vouchers that are currently authorized
and being used by families to subsidize their housing costs. The account also provides funding for
the administrative costs incurred by the local Public Housing Authorities (PHAs) that administer
the program. The account is funded using both current-year appropriations and advance
appropriations provided for use in the following fiscal year. (For more information about the
program, see CRS Report RL34002, Section 8 Housing Choice Voucher Program: Issues and
Reform Proposals, by Maggie McCarty.)
Table 3. Tenant-Based Rental Assistance (Housing Choice Vouchers), FY2015-FY2016
(In billions of dollars)
FY2015
FY2016
FY2016
Section 8 Tenant-Based Rental Assistance
Enacted
Request
House
Total 19.304
21.123
19.919
Budget Authority for Voucher Renewals
17.486
18.334
18.151
Rental subsidy reserve
0.120
0.075
0.075
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FY2015
FY2016
FY2016
Section 8 Tenant-Based Rental Assistance
Enacted
Request
House
Administrative fees
1.530
2.020
1.530
Additional Fees
0.010
0.010
0.010
Tenant Protection Vouchers
0.130
0.150
0.130
Incremental Rental Vouchers
0.000
0.277
0.000
Incremental Family Unification Vouchers
0.000
0.020
0.000
Incremental Special Purpose Vouchers
0.000
0.215
0.000
Incremental Veterans Affairs Supported Housing vouchers (VASH)
0.075
0.000
0.000
Section 811 Voucher Renewals
0.083
0.108
0.108
Sources: Table prepared by CRS based on FY2015 Consolidated and Continuing Appropriations Act (P.L. 113-
235) and the Explanatory Statement, Congressional Record, vol. 160, part 151—Book II (December 11, 2014),
pp. H9981-H9984 (FY2015 enacted levels); the President’s FY2016 budget documents, including HUD
Congressional Budget Justifications (FY2016-requested levels); and H.R. 2577 and H.Rept. 114-129 (FY2016-
requested level and FY2016-House Committee).
Renewal Funding
Arguably, the most contentious issue in the tenant-based rental assistance account every year is
the cost of renewing existing vouchers. All of the roughly 2 million vouchers that are currently
authorized and in use are funded annually, so in order for families to continue to receive
assistance (i.e., renew their leases at the end of the year), new funding is needed each year.
The President’s budget request usually includes an estimate of how much it will cost in the next
year to renew all vouchers in use. However, that estimate is based on assumptions about (1) how
many vouchers will be in use and (2) how much the costs of those vouchers will change the next
year. The actual renewal cost needs of the program will be influenced by whether PHAs are, in
aggregate, increasing or decreasing the number of vouchers they are issuing to families and
whether those families are able to successfully use the vouchers to find housing. These factors
influence the number of vouchers in use, also referred to as voucher utilization, or the number of
vouchers that are “under lease.” The cost of the vouchers that are up for renewal is driven by
changes in family incomes and changes in rental markets. Congress and the President may use
different assumptions about how any or all of these factors will change, and thus they may come
up with different estimates regarding how much will be needed to “fully fund” the renewal of all
vouchers currently in use.
For FY2016, the President’s budget estimates that renewal needs will be $18.3 billion, an increase
of $848 million relative to FY2015.
The House Appropriations Committee bill includes $18.15 billion for voucher renewals. A
committee press release regarding the bill states that the funding provided will “continue
assistance to all families and individuals currently served.”1
1 The U.S. House of Representatives, Committee on Appropriations, “Appropriations Committee Releases the Fiscal
Year 2016 Transportation, Housing and Urban Development Bill,” press release, April 28, 2015. Available at
http://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394177.
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Administrative Fees
PHAs are paid a per-unit fee to administer the Housing Choice Voucher program. Thus, the total
amount of fees a PHA earns in a year is based on how many vouchers it leases. In recent years,
the amount of appropriations provided by Congress has not been sufficient to fully fund all of the
fees earned by PHAs under the formula, thus they have received reduced, or prorated, fees. The
proration level resulting from the FY2015 funding level was 74%.2
For FY2016, the President’s budget requested more than $2 billion for administrative fees, an
increase of almost half a billion dollars over the FY2015 level. HUD’s Congressional Budget
Justifications state that the requested level would not be sufficient to fully fund PHAs’ fee
eligibility, but would result in a higher proration level (90%) than has been funded in recent years.
The House Appropriations Committee bill includes level funding for administrative fees in
FY2016. This would likely mean a proration level equal to or less than FY2015 (74%).
New Vouchers
New vouchers—or “incremental vouchers”—are vouchers that are funded by Congress and
distributed by HUD to PHAs to serve additional families. In recent years, the primary source of
new vouchers has been the Veteran’s Affairs Supported Housing (VASH) program, which is
administered jointly with the Department of Veterans Affairs and provides vouchers paired with
supportive services for homeless veterans.
For FY2016, the President’s budget requested more than $500 million to fund 67,000 new
incremental vouchers. HUD estimates that this is the number of vouchers that have been lost as a
result of funding cuts since sequestration in FY2013.3 Of those 67,000, HUD proposed to allocate
37,000 based on relative need, as determined by the Secretary, and 30,000 for special populations.
Specifically, the President requested $178 million for new vouchers for families, veterans, and
Native Americans experiencing homelessness as well as victims of domestic violence; and $20
million for families and youth in the child welfare system, through the Family Unification
Program (FUP). The President’s budget requested no new funding for VASH (although homeless
veterans would be eligible for the new vouchers requested in the budget).
The House Appropriations Committee bill does not include any funding for new incremental
vouchers, including new incremental VASH vouchers.
Section 8 Project-Based Rental Assistance
The Section 8 project-based rental assistance (PBRA) account provides funding to administer and
renew existing project-based Section 8 rental assistance contracts between HUD and private
multifamily property owners. Under those contracts, HUD provides subsidies to the owners to
2 This is an estimated amount and may change over the course of the year, although HUD does not expect it to change
significantly. See HUD, “CY 2015 Housing Choice Voucher Funding Implementation Follow-Up Questions from
February 21, 2015 Broadcast,” available at http://portal.hud.gov/hudportal/documents/huddoc?id=
BROADCASTQAs.pdf.
3 See Appendix for discussion of sequestration.
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make up the difference between what eligible low-income families pay to live in subsidized units
(30% of their incomes) and a previously agreed-upon rent for the unit. No contracts for newly
subsidized units have been entered into under this program since the early 1980s.4 When the
program was active, Congress funded the contracts for 20- to 40-year periods, so the monthly
payments for owners came from old appropriations. However, once those contracts expire, they
require new annual appropriations if they are renewed. Further, some old contracts do not have
sufficient funding to finish their existing terms, so new funding is needed to complete the contract
(referred to as amendment funding). As more contracts have shifted from long-term
appropriations to new appropriations, this account has grown and become the second-largest
account in HUD’s budget.
The President’s budget requested just under $10 billion for project-based contract renewals,
nearly $600 million for amendment needs, and $215 million for the contract administrators that
HUD contracts with to manage the program (generally, PHAs and state housing finance
agencies). The total amount requested for the PBRA account ($10.76 billion) is more than $1
billion above the FY2015 funding level. Part of that increase is driven by estimated increases in
renewal costs, but part of the increase is the result of FY2015 funding needs being lower than
usual because of one-time savings from an accounting change. That accounting change resulted in
some contracts needing less than 12 months of funding. The President’s budget documents state
that the amount requested in FY2016 is sufficient to fully fund all contracts for a full 12-month
period.
The House Appropriations Committee bill proposes $10.65 billion for the PBRA account in
FY2016. It includes $10.5 billion for renewals and amendment needs and $150 million for
contract administrators. The committee report states that it expects HUD to realize cost savings in
the contracting for these services.
Public Housing
The Public Housing program provides publicly owned and subsidized rental units for very low-
income families. Created in 1937, it is the federal government’s oldest housing assistance
program for poor families, and it is arguably HUD’s most well-known assistance program. (For
more information, see CRS Report R41654, Introduction to Public Housing, by Maggie
McCarty.)
Although no new Public Housing developments have been built for many years, Congress
continues to provide funds to the more than 3,100 PHAs that own and maintain the existing stock
of more than 1 million units. Public Housing receives federal funding under two primary
accounts, which, when combined, result in Public Housing being the third-highest funded
program in HUD’s budget (following the two Section 8 programs). Through the operating fund,
HUD provides funding to PHAs to help fill the gap between tenants’ rent contributions and the
cost of ongoing maintenance, utilities, and administration of public housing properties. Through
the capital fund, HUD provides funding to PHAs for capital projects and modernization of their
public housing properties. Choice Neighborhoods is an Obama Administration initiative to
provide competitive grants to revitalize distressed public and assisted housing properties and their
4 Under the Rental Assistance Demonstration (RAD), units funded through other HUD-assisted housing programs may
convert to Section 8 project-based assistance. These include the Rent Supplement program, Rental Assistance
Payments, Public Housing, and Section 8 Moderate Rehabilitation program.
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surrounding communities. It is similar to its predecessor program, the HOPE VI program;
however, Choice Neighborhoods expands the pool of eligible applicants beyond public housing
properties to include other HUD-assisted properties and their communities.
Table 4. Public Housing, FY2015-FY2016
(In billions of dollars)
FY2015
FY2016
FY2016
Account
Enacted
Request
House
Public Housing Capital Fund
1.875
1.970
1.681
Amount Available for Formula Grants, after set-asides
1.764 1.815
1.613
Resident Opportunities for Supportive Services (ROSS)
0.045 0.000
0.030
Jobs Plus Demonstration
0.015 0.100
0.015
Other set-asides
0.051 0.055
0.023
Public Housing Operating Fund
4.440
4.600
4.440
Choice Neighborhoods
0.080
0.250
0.020
Sources: Table prepared by CRS based on FY2015 Consolidated and Continuing Appropriations Act (P.L. 113-
235) and the Explanatory Statement, Congressional Record, vol. 160, part 151—Book II (December 11, 2014),
pp. H9981-H9984 (FY2015- enacted levels); the President’s FY2016 budget documents, including HUD
Congressional Budget Justifications (FY2016-requested levels); and H.R. 2577 and H.Rept. 114-129 (FY2016-
requested level and FY2016-House Committee).
Operating Fund
Operating fund dollars are allocated to PHAs based on a formula that estimates what it should
cost PHAs to maintain their public housing properties based on the characteristics of those
properties. HUD’s Congressional Budget Justifications estimate that the amount requested for the
operating fund in FY2016, $4.6 billion, would be sufficient to fund approximately 86% of the
amount PHAs would qualify for under the operating fund formula.
The House Appropriations Committee would provide $160 million less than the amount
requested, which is even with the FY2015 enacted level. Thus, at the House Appropriations
Committee funding level, PHAs could expect an operating fund proration level of less than 86%.
Capital Fund
For the capital fund, the President’s budget requested about a $50 million increase for formula
grants over FY2015. According to HUD’s Congressional Budget Justifications, the amount
requested represents about 53% of the annual capital accrual needs in public housing.
The House Appropriations Committee bill would cut capital fund formula grants by about $150
million relative to FY2015, $200 million less than the President’s budget request.
Choice Neighborhoods
The FY2016 President’s budget requested $250 million for Choice Neighborhoods, a significant
increase over the $80 million provided in FY2015. HUD’s Congressional Budget Justifications
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note that the amount requested would fund between five and eight implementation grants (which
have a maximum grant amount of $30 million) and five to ten planning grants.
The House Appropriations Committee bill includes $20 million for Choice Neighborhoods.
Community Development Funding: The CDF, CDBG, and
Section 108
The Community Development Fund (CDF) funds several community development-related
activities, including the Community Development Block Grant (CDBG) program. CDBG is the
federal government’s largest and most widely available source of financial assistance supporting
state and local government-directed neighborhood revitalization, housing rehabilitation, and
economic development activities. These formula-based grants are allocated to approximately
1,194 entitlement communities (metropolitan cities with populations of 50,000, principal cities of
metropolitan areas, and urban counties), the 50 states plus Puerto Rico, and the insular areas of
American Samoa, Guam, the Virgin Islands, and the Northern Mariana Islands. Grants are used to
implement plans intended to address housing, community development, and economic
development needs, as determined by local officials. (For a detailed review of recent CDF
funding issues and a detailed description of CDBG, see CRS Report R43208, Community
Development Block Grants: Funding Issues in the 113th Congress, by Eugene Boyd and CRS
Report R43520, Community Development Block Grants and Related Programs: A Primer, by
Eugene Boyd.)
Table 5. CDBG and Related Appropriations, FY2015 and FY2016
(In billions of dollars)
FY2015
FY2016
FY2016
Program
Enacted
Request
House
CDF, total
3.066 2.880a 3.060
CDBG-formula
3.000 2.800 3.000
Entitlement
communities
2.095 2.011 2.095
States
0.898 0.862 0.898
CDBG insular areas
0.007
0.007
0.007
CDBG Indian tribes
0.066
0.080b
0.060c
Sources: Table prepared by CRS based on FY2015 Consolidated and Continuing Appropriations Act (P.L. 113-
235) and the Explanatory Statement, Congressional Record, vol. 160, part 151—Book II (December 11, 2014),
pp. H9981-H9984 (FY2015-enacted levels); the President’s FY2016 budget documents, including HUD
Congressional Budget Justifications (FY2016-requested levels); and H.R. 2577 and H.Rept. 114-129 (FY2016-
requested level and FY2016-House Committee).
Note: Totals may not add due to rounding.
a. Includes potential transfer of $20 million to the Transformation Initiative (TI) account.
b. Includes a $10 million set-aside for teacher housing in tribal areas.
c. Includes a $3.960 million set-aside to be used for emergencies that constitute an imminent threat to health
and safety.
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Administration Request
The Obama Administration budget request for FY2016 included $2.880 billion for CDBG
formula grants to entitlement communities, states, and insular areas ($2.800 billion) and
competitive grants awarded to Indian tribes and Alaskan Native villages ($80 million). The
Administration’s FY2016 budget proposal for the CDBG formula grants, if approved, would
reduce the amount of funds allocated by $200 million below the amount appropriated for FY2015
($3 billion). For FY2016, the Administration request for the CDBG formula components of the
CDF account included
• $2.011 billion to be allocated to 1,194 CDBG entitlement communities;
• $862 million for the CDBG state-administered program, including funds for
Puerto Rico; and
• $7 million for insular areas (American Samoa, Guam, the Virgin Islands, and the
Northern Mariana Islands).
This is approximately 7% less than the amount appropriated for FY2015. The Administration also
requested $80 million for Indian tribes, which is a 21.2% increase above the amount appropriated
in FY2015.
The Administration, when releasing its FY2016 budget request, noted that it planned to propose
revisions and reforms to the program.5 According to the Administration’s budget documents, the
legislative package, which it plans to release after the FY2016 appropriations cycle, will focus on
four areas: grantee eligibility; aligning program cycles; improving grantee accountability; and
addressing issues in the state CDBG program.
More specifically, the Administration’s grant reforms, as outlined in HUD’s Congressional
Budget Justifications, may include proposals that would
• reduce the number of small grantees, including removing grandfathering
protections for communities that no longer meet the population threshold for
entitlement status and establishing a minimum grant amount;
• reduce the administrative burden on grantees by synchronizing critical program
cycles for the submission of plans and reports;
• help grantees target funding resources to areas of greatest need; and
• provide more options for regional coordination, administration, and planning.
The Administration also proposed an increase (from 10% to 15%) in the percentage of CDBG
funds allocated to the states of Texas, California, New Mexico, and Arizona that must be used in
colonias; these are blighted and economically distressed unincorporated areas within 150 miles of
the border with Mexico.
5 The Administration previously has announced efforts to pursue similar grant reforms during the last two budget
cycles (FY2014/FY2015), but did not put forth a formal proposal.
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Upward Mobility Initiative
In addition, the Administration outlined a new proposed Upward Mobility Initiative (UMI) that
would allow up to 10 states, local governments, or consortia of the two to combine funding across
four existing block grants (Social Services Block Grants, Community Service Block Grants,
HOME Investment Partnerships, and CDBG). The UMI, which would be jointly administered by
HUD and the Department of Health and Human Services, would allow grantees to use funds
“beyond the current allowable purposes of these programs to implement evidence-based or
promising strategies for helping individuals succeed in the labor market and improving economic
mobility, children’s outcomes, and the ability of communities to expand opportunity.”6
Section 108 Loan Guarantees
The CDBG Section 108 Loan Guarantee program (Section 108) allows states and entitlement
communities to borrow up to five times their annual CDBG allocation for a term of 20 years
through the public issuance of bonds to support large-scale economic development and housing
projects. The Administration’s FY2016 budget proposed a loan commitment ceiling of $300
million. This is $200 million less than was made available for FY2015, the first year the program
charged a fee for access to it rather than provide a credit subsidy. The fee-based requirement to
access the program, which was first proposed by the Administration in its FY2010 budget request,
was not approved by Congress until the FY2014 appropriations. On February 5, 2015, HUD
published two notices regarding the Section 108 fees in the Federal Register. The first of the two
established a fee of 2.42% of the principal obligation of the loan, which will be applied to Section
108 loan disbursements during FY2015. The fee will be charged after available credit subsidies
have been depleted. The second notice included proposed rules that would govern the levying of
fees when appropriations for credit subsidies are not available or insufficient in future years.
House Appropriations Committee Bill
The House Appropriations Committee recommends $3.060 billion in FY2016 for activities
funded under the CDF account, including $3.0 billion for CDBG formula grants awarded to
states, entitlement communities, and insular areas. This is the same amount appropriated in
FY2015 for formula grants and $200 million (7%) more than requested by the Administration.
The bill recommends an appropriation of $60 million for Indian tribes. This is $20 million less
than requested by the Administration. The bill also includes a general provision (Section 230) that
would prohibit HUD from using any funding provided in the bill to terminate the designation of a
community as an entitlement community for the purposes of CDBG eligibility. The provision is
an effort to protect the entitlement status of communities that may no longer meet statutory
requirements for a direct formula-based allocation since it is anticipated that the Administration
will seek statutory changes in the program eligibility requirements that would have the net effect
of reducing the number of entitlement communities. The report language accompanying the bill
noted the proposed changes in eligibility “may have adverse effects on smaller communities”
forcing states “to support a greater number of communities without additional funds.”7
6 U.S. Department of Housing and Urban Development, Congressional Budget Justifications for FY2016, Community
Development Fund, Washington, DC, February 2, 2015, p. 15-7, http://portal.hud.gov/hudportal/documents/huddoc?
id=18-FY16CJ-CDFund.pdf.
7 U.S. Congress, House Committee on Appropriations, Subcommittee on Transportation, Housing and Urban
(continued...)
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The bill includes language supporting the continued conversion of Section 108 loan guarantees to
a fee-based structure and recommends a loan guarantee ceiling of $300 million. This is consistent
with the Administration’s request. The committee also recommended the rescission of all
unobligated credit subsidy balances, completing the conversion of the program to a fee-based
structure.
HOME Investment Partnerships Program
The HOME Investment Partnerships Program is a flexible block grant that provides formula
funding to states and certain local jurisdictions (referred to as “participating jurisdictions” or PJs).
PJs can use HOME funds for a wide range of affordable housing activities (including both rental
housing and homeownership) that benefit low-income households. Along with states, nearly 600
local jurisdictions received formula funding through HOME in FY2014. (For more information
about HOME, see CRS Report R40118, An Overview of the HOME Investment Partnerships
Program, by Katie Jones.)
The President’s budget requested $1.06 billion for HOME, $150 million more than the FY2015
enacted level of $900 million. (The HOME request includes $10 million for the Self-Help
Homeownership Opportunity Program, or SHOP, which historically has been funded in its own
account.)
The House Appropriations Committee bill would provide $767 million in funding for the HOME
program. (It would continue to fund SHOP within its own account.) In addition, the House
Appropriations Committee bill would divert any funds provided to the Housing Trust Fund in
FY2016 to the HOME program. The committee report estimates that $133 million would be
transferred from the Housing Trust Fund, which would bring total HOME funding for FY2016 to
$900 million, the same as the FY2015-enacted level.
The Housing Trust Fund was established by the Housing and Economic Recovery Act of 2008
(HERA, P.L. 110-289) and would provide formula funding to states to use primarily for rental
housing activities that benefit extremely low-income households. It was to be funded through
contributions from Fannie Mae and Freddie Mac, rather than through appropriations.8 However,
the contributions were suspended before they had ever begun shortly after Fannie Mae and
Freddie Mac were placed into voluntary conservatorship in September 2008. Therefore, the
Housing Trust Fund has never been funded, but the Director of the Federal Housing Finance
Agency (FHFA), Fannie Mae’s and Freddie Mac’s regulator, recently directed Fannie and Freddie
to resume their contributions.9 The first funds are expected to be transferred to the Housing Trust
(...continued)
Development, and Related Agencies, Department of Transportation, and Housing and Urban development, and
Related Agencies Appropriations Bill, 2016, committee print, 114th Cong., 1st sess., June 2, 2015, 114-xx (Washington:
GPO, 2015), p. 84.
8 Specifically, Fannie Mae and Freddie Mac are each directed to set aside 4.2 basis points (.042%) of every dollar of the
unpaid principal balance of their new business purchases. The contributions are to be split between the Housing Trust
Fund and another program created by HERA, the Capital Magnet Fund, which would be administered by the
Department of the Treasury. Of the amount available, the Housing Trust Fund is to receive 65% of the contributions
and the Capital Magnet Fund is to receive 35%. Some funds may also be used to cover costs of the Hope for
Homeowners program, a foreclosure prevention program that is no longer active.
9 See Federal Housing Finance Agency, “FHFA Statement on the Housing Trust Fund and Capital Magnet Fund,”
December 11, 2014, at http://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Statement-on-the-Housing-Trust-Fund-
(continued...)
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Fund in early 2016, subject to certain conditions. (For more information on the Housing Trust
Fund, see CRS Report R40781, The Housing Trust Fund: Background and Issues, by Katie
Jones.)
The Federal Housing Administration (FHA)
The Federal Housing Administration (FHA) insures private mortgage lenders against losses on
certain mortgages made to eligible borrowers. If a borrower defaults on the mortgage, FHA
repays the lender the remaining amount that the borrower owes. The provision of FHA insurance
helps to make mortgage credit more widely available, and at a lower cost, than it might be in the
absence of the insurance.
The FHA insurance programs are administered primarily through two program accounts in the
HUD budget. The Mutual Mortgage Insurance Fund (MMI Fund) account includes mortgages for
single-family home loans made to eligible borrowers, such as those with low down payments. It
also includes FHA-insured reverse mortgages, known as Home Equity Conversion Mortgages
(HECMs). The MMI Fund is the largest of the FHA insurance funds, and when there is public
discussion of “FHA insurance” or “FHA loans,” it is usually related to the MMI Fund and the
single-family home loans insured under that fund. (For more information on the features of FHA-
insured home mortgages, see CRS Report RS20530, FHA-Insured Home Loans: An Overview ,
by Katie Jones.) The second account, the General Insurance/Special Risk Insurance Fund (GI/SRI
Fund), includes mortgages on multifamily buildings and healthcare facilities such as hospitals and
nursing homes.
Offsetting Receipts
The costs of federal loan guarantees are reflected in the budget as the net present value of all of
the expected future cash flows from the loans that are expected to be insured in a given year.
(Cash inflows include fees paid by borrowers to the federal government; cash outflows include
claims paid by the federal government when a loan is not repaid by the borrower.) If the estimated
cash inflows exceed the estimated cash outflows—that is, if the insured loans are expected to earn
more money for the government than they cost—then the program is said to have a negative
credit subsidy.10 A negative credit subsidy results in offsetting receipts, which, in the case of FHA,
can offset other costs of the HUD budget.
Historically, the MMI Fund has been estimated to have negative credit subsidy.11 The resulting
offsetting receipts are usually the single largest source of offsets in the HUD budget. While the
President’s budget request estimates the amount of FHA offsetting receipts, the Congressional
Budget Office (CBO) does its own estimates, and the CBO estimates are the ones that are used by
congressional appropriators to determine budget authority.
(...continued)
and-Capital-Magnet-Fund.aspx.
10 Credit subsidy rates do not include administrative expenses.
11 The credit subsidy rates for loans insured in a given year are re-estimated each subsequent year, taking into account
updated assumptions and actual loan performance. Given that estimates of the future performance of loans are
inherently uncertain, the Federal Credit Reform Act provides permanent and indefinite budget authority to government
loan guarantee programs to cover future increases in the costs of loan guarantees based on these re-estimates.
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For FY2016, CBO estimates that loans insured by FHA (including both the MMI Fund and the
GI/SRI Fund) will generate about $7.8 billion in offsetting receipts, a decline of about $1 billion
from the estimated offsetting receipts in FY2015. This decline in offsetting receipts means that
less funding is available to offset the cost of the HUD budget. All other things being equal, a $1
billion decrease in offsets would mean that gross appropriations would have to increase by $1
billion to meet the same level of net HUD budget authority that was provided in FY2015.
Appropriations and Commitment Authority
Because the loans insured under the MMI Fund have historically been estimated to have negative
credit subsidy, the MMI Fund has never needed an appropriation to cover the costs of loans
guaranteed in a given fiscal year. However, FHA does receive appropriations every year for
salaries (included in the salaries and expenses account for the overall HUD budget) and
administrative contract expenses. The President’s budget requested $174 million for
administrative contract expenses for FHA in FY2016. The House Appropriations Committee bill
would provide $130 million, the same as the FY2015-enacted level.
Annual appropriations acts also authorize FHA to insure up to a certain aggregate dollar volume
of loans during the fiscal year. This is referred to as “commitment authority.” The House
Appropriations Committee bill would authorize FHA to insure up to $400 billion in loans under
the MMI Fund, and up to $30 billion under the GI/SRI Fund, in FY2016. This is the same amount
of commitment authority requested in the President’s budget, and the same as the FY2015-
enacted levels.
Selected General Provisions
Each year, in addition to proposing funding levels for HUD programs, the President’s budget
request and congressional appropriations bills include provisions that may affect the operation of
HUD programs, implement new initiatives, or keep HUD from using funds for particular
purposes. These proposals are often included in the General Provisions sections of HUD’s budget
justifications and appropriations bills. While some provisions are included in appropriations bills
every year, new changes are often proposed.
The President’s FY2016 budget request included a number of new legislative proposals in the
General Provisions, described in the Congressional Budget Justifications. They included the
following:
• Certain flexibilities for PHAs administering public housing to transfer funds
between accounts and extend the availability of funds. (Sec. 223)
• Several administrative changes to the SHOP program. (Sec 225)
• Several HOME program changes, including revising grandfathering provisions in
a way that would reduce the number of eligible grantees. (Sec. 228)
• Several housing counseling changes related to the administration of grants.
(Sec. 227)
• Changes to the health and medical expense deduction used for calculating
adjusted gross income designed to streamline the administration of the deduction.
(Sec. 229)
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• Authorization of a new energy and water conservation demonstration in certain
assisted multifamily properties (Sec. 230) and an energy conservation pilot for
public housing. (Sec. 244)
• Creation of new authority for the Secretary to update certain use agreements
when dealing with preservation properties. (Sec. 231)
• Statutory amendments to permanently allow private nonprofit organizations to
administer rental assistance in the Continuum of Care program, as opposed to
temporarily extending this authority from year to year, as has happened in recent
appropriations acts. (Sec. 233)
• A proposal to allow FHA to charge lenders an administrative support fee to help
fund FHA’s administrative expenses, including quality assurance activities.
(Sec. 240)
• A proposal to expand the Moving to Work (MTW) demonstration to up to 15
high-performing PHAs, under certain modified conditions. (Sec. 242)
• Authorization of triennial income recertification for persons on fixed income
receiving rental assistance. (Sec. 243)
• Authority to transfer Section 811 Housing for Persons with Disabilities assistance
from one property to another, under specified conditions. (Sec. 247)
• A proposal to exempt certain FHA-insured risk-sharing loans for small
multifamily apartment buildings from specific affordability requirements.
(Sec. 221)
• A proposal to allow certain FHA multifamily risk-sharing loans to be included in
Ginnie Mae securities, subject to certain conditions. (Sec. 224)
• A range of additional FHA reforms. (Secs. 245-246 and Secs. 248-255)
• New authority for HUD to require border areas to set aside CDBG funding for
colonias. (Sec. 256)
The House Appropriations Committee bill rejected the President’s new legislative proposals. In
several places in the draft committee report, the committee noted that the authorizing committees
are the appropriate bodies to address such proposals. However, the bill does include several new
General Provisions, including a provision to prohibit HUD from requiring funding recipients to
meet Energy Star or other energy efficiency standards beyond state and local building codes
(Sec. 232).
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Appendix. The Budget Resolution and
Discretionary Spending Caps
HUD appropriations are included as a part of the Transportation, HUD, and Related Agencies
appropriations bill (THUD) each year. That bill, like the other 11 annual appropriations bills, is
crafted to comply with limits provided in the annual budget resolution, which is, in turn,
influenced by the Budget Control Act and its discretionary spending limits. Thus, it is useful to
have a basic understanding of these policies and procedures as context when considering the
formulation of HUD appropriations levels.
The Budget Resolution
The annual budget resolution provides a budgetary framework within which Congress considers
legislation affecting spending and revenue. It sets forth spending and revenue levels, including
spending allocations to House and Senate committees. These levels are enforceable by a point of
order. After the House and the Senate Appropriations Committees receive their discretionary
spending allocations from the budget resolution (referred to as 302(a) allocations), they divide
their allocations among their 12 subcommittees (referred to as the 302(b) allocations). Each
subcommittee is responsible for one of the 12 regular appropriations bills. While a budget
resolution and subcommittee allocations alone cannot be used to determine how much funding
any individual account or program will receive, they do set the parameters within which decisions
about funding for individual accounts and programs can be made.
The FY2016 budget resolution was agreed to by the House on April 30, 2015, and the Senate on
May 6, 2015 (S.Con.Res. 11, H.Rept. 114-96). It set an overall base discretionary spending limit
of $1.017 trillion for FY2016, an increase from the FY2015 level of $1.014 trillion and consistent
with aggregate current law statutory spending limits under the Budget Control Act, as amended
(discussed below).
The current Section 302(b) allocation for THUD is $55.27 billion in the House and $55.646
billion in the Senate, both of which represent an increase over the FY2015 allocation of $53.77
billion.12 However, practically speaking, both would provide a much smaller increase than it
would appear because of declines in the amount of offsets available from FHA (a decline of $1.1
billion) and rescissions of contract authority from the Department of Transportation (a decline of
$260 million).13
The Budget Control Act and Sequestration
In 2011, Congress passed the Budget Control Act (BCA, P.L. 112-25), which both increased the
debt limit and contained provisions intended to reduce the budget deficit through spending limits
12 https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/dataandtechnicalinformation/45384-2015-
DiscretionaryCurrentStatus.pdf.
13 As of the date of this report, the most recent House Appropriations Committee 302(b) suballocations are provided in
H.Rept. 114-118 (May 18, 2015); the most recent Senate Appropriations Committee 302(b) suballocations are provided
in S.Rept. 114-55, which were reported from committee on May 21, 2015.
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and reductions. In part, the BCA accomplishes deficit reduction by imposing statutory spending
limits for discretionary programs, in effect from FY2012 through FY2021. The BCA specifies
separate limits for defense and nondefense funding; HUD discretionary programs are subject to
the nondefense discretionary limits.
In addition to the initial spending limits set in the BCA, the law tasked a Joint Select Committee
on Deficit Reduction to develop a federal deficit reduction plan for Congress and the President to
enact by January 15, 2012. When a plan was not enacted, the BCA required that sequestration of
nonexempt discretionary funding occur in FY2013. (Sequestration is a process of automatic,
largely across-the-board spending reductions.) In addition, the BCA required that the
discretionary spending limits be lowered further through 2021.14
In each year, if Congress appropriates discretionary funding that exceeds either of the limits
(defense or non-defense), then sequestration will be imposed to reduce spending in the applicable
category. In terms of mandatory funding, the BCA provided for sequestration of nonexempt
programs to occur in each year through FY2021, subsequently amended to occur through
FY2024.15
Author Contact Information
Maggie McCarty, Coordinator
Katie Jones
Specialist in Housing Policy
Analyst in Housing Policy
mmccarty@crs.loc.gov, 7-2163
kmjones@crs.loc.gov, 7-4162
Libby Perl
Eugene Boyd
Specialist in Housing Policy
Analyst in Federalism and Economic Development
eperl@crs.loc.gov, 7-7806
Policy
eboyd@crs.loc.gov, 7-8689
14 For more information about the BCA and its implementation, see CRS Report R43411, The Budget Control Act of
2011: Legislative Changes to the Law and Their Budgetary Effects, by Mindy R. Levit.
15 A very small amount of HUD funding ($3 million from the Rental Housing Assistance Fund) is considered non-
exempt mandatory funding subject to sequestration. Additionally, if the Housing Trust Fund is funded in FY2016, it
will also be subject to mandatory sequestration. See Office of Management and Budget, OMB Report to the Congress
on the Joint Committee Reductions for Fiscal Year 2016, February 2, 2015, p. 8, https://www.whitehouse.gov/sites/
default/files/omb/assets/legislative_reports/sequestration/2016_jc_sequestration_report_speaker.pdf.
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