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Frequently Asked Questions about the Department of Housing and Urban Development (HUD)

January 1, 1980

What Does the Department of Housing and Urban Development (HUD) Do?

HUD has a record of accomplishments that spans more than 30 years and seven Presidents. Thousands of communities and tens of millions of Americans have benefited from HUD's community development and housing programs.

For instance:

  • Thanks to HUD and the Federal Housing Administration, more than 24 million families have become homeowners.


  • Ginnie Mae, a wholly-owned federal corporation within HUD, pioneered the Mortgage Backed Security and used it to add more than $1 trillion to the supply of affordable mortgage funds.

  • HUD continues to play a major role in providing shelter for America's most vulnerable populations: the working poor, minorities, Native Americans, people with disabilities, people with AIDS, the elderly, the homeless.

  • More than 7 million families have lived in locally-managed, HUD supported public housing.

  • Today, HUD helps about 4.8 million low income families through its public housing or private rental assistance programs (by contrast, there are a total of 14.75 million very-low-income households in the nation-earning less than 50 percent of the local median income potentially eligible for HUD rental housing assistance).

  • An estimated 600,000 homeless Americans can be found on the streets and in homeless shelters on any given night. HUD's Homeless Assistance programs have helped some 2 million families and individuals since 1987.

  • In 1996, HUD helped states and communities spur economic and community development and create affordable housing through more than $6.3 billion in grants and $1.37 billion in loan guarantees. These funds have leveraged billions more in other public and private resources.

  • In 1996, HUD support for first-time and moderate income homebuyers included insuring mortgages for 650,000 single-family homeowners, and an additional 95,000 rental units in multifamily developments. By the end of Fiscal Year (FY) 1996, the total number of FHA-insured mortgages passed the 24 million mark with a value of over $900 billion.

What Is "Assisted" Housing?

HUD "assists" low-income households with rental subsidies in the private sector, primarily through Section 8 certificates and vouchers, through the Office of Public and Indian Housing. Families seeking assistance apply through their local public housing agency.

Under the voucher program, tenants have greater freedom of choice to select housing where they want to live within a standard rent range.

Under the Section 8 certificate program, rent subsidies are used to pay owners the difference between what tenants can pay and contract rents.

Public and Indian Housing (PIH) provides funds for the rental voucher, certificate and Moderate Rehabilitation programs that are managed by local public housing agencies (PHAs) created by state law and administered by local governments.

Overall, more than 3 million households received Section 8 rental assistance in FY 1996.

Congress appropriated about $400 million primarily for relocation assistance in the form of Section 8 certificates and vouchers in FY 1996. It also provided $830 million for Section 202 housing grants and subsidies for elderly, and $258 million for grants and subsidies for Section 811 housing for the disabled.

The program goes beyond providing certificates and vouchers to individuals; it also renews Section 8 contracts with private owners. This is needed in order to maintain a sufficient housing stock nationwide to serve low-income families. While HUD tries to reduce the cost of contract renewals and shorten their tenure, budget authority was expected to reach $3.6 billion for 306,058 units in FY 1996 and grow substantially after that.

HUD also administers a Housing Counseling Program with $12 million in FY 1996 to assist tenants and homeowners in property maintenance, financial management and other matters.

How Does Public Housing Work?

Public housing programs provide direct payments to Public Housing Agencies (PHAs) and Indian Housing Authorities (IHAs) to develop and operate housing for low-income families. HUD's Public Housing programs are administered by the Assistant Secretary for Public and Indian Housing (PIH).

HUD distributed more than $6.2 billion in FY 1996 to approximately 3,350 Public and Indian housing authorities that provided public housing and services to 1.3 million households.

Existing programs and their FY 1996 funding levels (in parenthesis) are:

  • Indian Housing Development grants ($160 million) for constructing new units or acquiring and rehabilitating existing units.

  • Modernization funds ($2.5 billion) allocated under a non-competitive formula Comprehensive Grant Program (CGP) for medium and large PHAs and IRAs with 250 or more units. Smaller PHAs are funded on a competitive basis under a Comprehensive Improvement Assistance Program (CIAP). The funds are used to improve the physical condition and upgrade management of public housing.

  • Tenant Opportunity Program (TOP) funds are set aside ($15 million) within the Modernization program to promote resident organization and management.

  • Severely Distressed Public Housing grants ($480 million) go to PHAs to plan and implement revitalization programs. HUD encourages PHAs to use the funds to leverage other resources such as low-income housing tax credits and bond financing.

  • Operating Subsidies ($2.8 billion) assist local PHAs in the cost of operating and maintaining the dwellings they own.

  • Drug Elimination Grants for Low-Income Housing ($270 million) go to PHAs to mobilize their communities in the war on drugs by increasing security and ridding housing projects of drug dealers and drug use.

How Do the Homeless Get Help From HUD?

HUD provides funds to state and local governments and to nonprofit organizations to assist homeless individuals and families. The funds are used in a "continuum of care" to help the homeless move from the streets, to temporary shelter, to supportive housing (with services, if necessary), and ultimately back to the mainstream of American life. The Assistant Secretary for Community Planning and Development administers most of HUD's homeless assistance programs.

HUD's homeless efforts began on a national level with the Stewart B. McKinney Homeless Assistance Act of 1987, which provided the first direct HUD program to help communities deal with homelessness. More than $4.8 billion has been provided and more than 2 million homeless Americans have been assisted by these programs through FY 1996.

In addition, since the Housing Opportunities for Persons with AIDS (HOPWA) program was begun in 1992 through the end of 1996, almost $646 million has been appropriated for housing assistance and related supportive services. This program provides benefits for over 58,000 low-income persons who are living with HIV or AIDS and their families during a one-year period. HUD distributed $823 million for homelessness assistance and $171 million under HOPWA to eligible recipients in FY 1996.

CPD has administered the following homelessness assistance programs:

  • Shelter Plus Care - HUD provides grants for rental assistance to homeless persons with chronic disabilities under the Shelter Plus Care program. Eligible recipients are state and local government units, public housing agencies and Indian tribes.

    To receive the funds each recipient must provide supportive services at least equal in value to the rental assistance. Supportive services would address mental illness, substance abuse, and acquired immunodeficiency syndrome (AIDS) and related diseases.

  • Supportive Housing - Supportive Housing grants go to state and local governments, Indian tribes and nonprofit organizations to provide short-term transitional housing and services to deinstitutionalized homeless individuals, families with children, individuals with mental disabilities and others, including AIDS victims. States may receive funds for long-term housing projects for homeless handicapped persons.

    HUD provides grants for acquisition, rehabilitation, new construction and annual payments for operating costs and supportive services. HUD also provides technical assistance. Participants must match the acquisition, rehabilitation or new construction costs and provide a percentage of the operating costs.

  • Section 8 Moderate Rehabilitation (SRO) - Public and Indian housing agencies and private nonprofit organizations compete for Section 8 Moderate Rehabilitation grants based on local needs and their ability to provide single-room occupancy (SRO) housing for homeless persons.

  • Emergency Shelter Grants - Emergency Shelter Grants are distributed to states, entitlement cities and counties and territories on a formula basis, and to Indian tribes. The funds may be used to renovate, rehabilitate or convert buildings to be used as shelters for homeless persons. The funds also may be used to operate emergency shelters, provide essential services to homeless individuals and to prevent homelessness.

  • Housing Opportunities for Persons with AIDS (HOPWA) - HOPWA provides housing assistance and supportive services to prevent homelessness of low-income persons with HIV/AIDS and their families, and to devise long-term comprehensive strategies for meeting the housing needs of persons with AIDS and their families.

    Eligible activities include construction, acquisition, renovation and operation of facilities; rental assistance and short-term housing payments; supportive services; technical assistance, and other housing-related activities. In 1994, 40 percent of the formula funds were used for rental assistance at an average cost of $5,000 a month.

    Ninety percent of HOPWA funds are allocated on a formula basis to states and metropolitan areas that have the largest number of AIDS cases. Governments and nonprofit organizations also may compete for 10 percent of the funds to develop model programs.

How Do HUD's Fair Housing Programs Work?

Federal Fair Housing statutes prohibit housing discrimination based on race, color, national origin, sex, religion, families with children, and disabilities.

HUD's programs to prevent housing discrimination through public education and enforcement are administered by the Assistant Secretary for Fair Housing and Equal Opportunity (FHEO).

In addition to investigating and resolving housing discrimination complaints under the Fair Housing Laws, FHEO conducts compliance reviews of HUD funds recipients, ensures equal employment opportunity and affirmative action within HUD and ensures that HUD programs provide equal opportunity.

Under its Fair Housing Assistance Program (FHAP), FHEO assists state and local governments in becoming certified -- having "substantially equivalent" fair housing laws -- and processing complaints with technical assistance and training grants. FHEO provided about $13.0 million in funds to the FHAP participants in FY 1996.

FHEO received $17 million in FY 1996 for its Fair Housing Initiatives Program (FHIP) to fund public agencies with substantially equivalent fair housing laws and private nonprofit organizations. These public and private organizations assist HUD in enforcement activities such as testing, investigations and complaint resolution. FHEO refers complaints arising in certified jurisdictions to those government agencies for investigation and prosecution.

FHIP also funds public education and outreach programs conducted by the fair housing organizations to make the public aware of what constitutes discrimination and promote voluntary compliance in the housing industry.

FHEO and the State and local Fair Housing Enforcement agencies received 10,915 new housing discrimination cases, closed 11,516 cases and obtained $9,092,685 in compensation (HUD ALJ and DOJ results not included), and obtained 'housing relief' in 623 cases in FY 1996.

Are Any HUD Housing Programs Available for Persons Who Are Not Very Low Income?

FHA assists first-time buyers and others who might not be able to meet down payment requirements for conventional loans by providing mortgage insurance to private lenders. It also insures loans for home improvements and buying manufactured (mobile) homes.

This is done through the Federal Housing Administration (FHA), a branch of HUD which works through local mortgage lending institutions to provide Federal mortgage and loan insurance for homeownership and the construction or improvement of affordable housing.

There are approximately 10 mortgage insurance and loan programs administered by the Assistant Secretary for Housing-Federal Housing Commissioner. As of October 1, 1996, FHA has insurance in force on 6.5 million single-family dwellings, totaling $401 billion. Most of these loans are insured by the Mutual Mortgage Insurance Fund. MMI is designed to be a self-sustaining fund requiring no annual appropriations.

Interest rates on FHA loans are generally market rates, while down payment requirements are lower than those for conventional loans. FHA loans cannot exceed the statutory limit.

When buyers become seriously delinquent on their loans, their mortgage companies usually foreclose and file insurance claims with HUD for the amount still owed on the loan. HUD pays the claim and becomes the owner of the property. The HUD Property Disposition staff across the nation and its contractors maintain and market these properties.

FHA also assists in providing affordable rental housing by insuring loans to developers and builders who construct or rehabilitate apartments and other multi-family housing developments.

FHA had insurance in force estimated at $48.6 billion on 15,935 multi-family developments with 2 million units as of September 30, 1996.

About the Department of Housing and Urban Development

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