By Vicki Needham - 02/14/11 08:24 PM EST
The budget request reduces the block grants by $300 million from $3.98 billion in 2010, to about $3.7 billion for 2012, a decrease of 7.5 percent, Donovan said.
"The administration will work with grantees to complement CDBG formula funds with other federal investments, such as Sustainable Communities, Growth Zones and Neighborhood Revitalization initiatives to help stabilize and revitalize local economies," the White House budget said.
The budget request for the programs is $953 million, $172 million less than 2010 levels, though it includes $499 million for new construction and incremental project rental assistance contracts.
"Preserving assistance to all existing units is the top funding priority," Donovan said. He said cuts wouldn't have been made if the country were in a better fiscal situation.
The budget request also cuts HOME Investment Partnerships by 9.5 percent, or $175 million relative to current funding levels.
The White House's budget request provides for $250 million to invest into "high-poverty neighborhoods where distressed HUD-assisted public and privately owned housing is located."
The White House requested $35 billion to preserve rental housing assistance to 4.7 million low-income families and $200 million for an evaluation of the conversion of up to 255,000 public housing units to long-term project-based rental assistance contracts, creating 70,000 jobs, Donovan said.
The president's budget also includes $250 million to connect historically isolated people and neighborhoods to local, regional and national economies by providing for the Choice Neighborhoods initiative.
Another $150 million in the 2012 budget would be used to create incentives for more communities to develop comprehensive housing and transportation plans that "result in jobs, economic growth and easier commutes."
In the 2012 budget, HUD is requesting $790 million to fund programs that will directly support housing and economic development in rural communities.
The White House is asking for an increase of $577 million above the 2010 enacted level for homelessness initiatives as part of a $2.5 billion program unveiled last year.
As part of the funding, HUD is requesting $2.3 billion for Homeless Assistance Grants, up from $1.9 billion in 2010, to maintain existing units and expand prevention, as well as for “rapid rehousing” and permanent supportive housing facilities. The request also includes $145 million to fund new housing vouchers for 19,000 homeless veterans and other homeless people receiving care from the Veterans Affairs or Health and Human Services departments. The administration is seeking $50 million for service coordinators and incentive fees to motivate housing authorities to serve more homeless people.
The administration projects that the Federal Housing Administration will insure $218 billion in mortgage borrowing, which Donovan said was "substantially below volumes done this past year" as the administration moves to reduce its involvement in housing market financing.
An annual insurance premiums collected from FHA borrowers, which are slated to go into effect April 18, are expected to reduce the amount of lending and generate $5 billion in fiscal 2012, up from $2.6 billion in 2010.
The budget requests $19.2 billion for the Housing Choice Voucher program to help more than 2 million extremely low- to low-income families with rental assistance live in decent housing in neighborhoods of their choice.
The budget provides $9.4 billion for Project-Based Rental Assistance, up from $8.6 billion in 2010, to preserve approximately 1.3 million affordable units through increased funding for contracts with private owners of multifamily properties. "This critical investment will help extremely low- to low-income households to obtain or retain decent, safe and sanitary housing."