Housing Issues in the 108th Congress

Publication Date: January 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Social conditions

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Abstract:

An omnibus spending bill (H.R. 2673, H.Rept. 108-401) that will fund the Department of Housing and Urban Development (HUD) and other federal agencies for FY2004 was signed into law by the President on January 23, 2004 (P.L. 108-199). The Senate had approved the conference report on the bill on December 22, 2003 and the House, on December 8.

P.L. 108-199 provides HUD with $31.4 billion (not including an "advanced appropriation" of $4.2 billion that cannot be spent until FY2005), about $400 million above the FY2003 appropriation. The new law does not contain the Administration's controversial plan to convert Section 8 tenant-based vouchers into a block grant to be administered by the states. The budget provides nearly $19.4 billion for the Housing Certificate program, a substantial increase over last year and enough to maintain the program at its current level. The HOPE VI public housing rehabilitation program is funded at $150 million, a sharp reduction from the $570 million appropriated in FY2003. P.L. 108-199 provides $87.5 million for the Administration's American Dream Downpayment Act, considerably less than the $200 million requested. Language authorizing the Downpayment Act at $200 million annually from FY2004 through FY2007 was signed by the President on December 12, 2003 (S. 811, P.L. 108-186). This Act also authorizes a demonstration Section 202 program to help meet the housing needs of grandparents who raise their grandchildren and adds a requirement to minimize the permanent displacement of residents affected by HOPE VI revitalization projects.

H.R. 1102 would create a National Affordable Housing Trust Fund. With about 210 largely Democratic co-sponsors, it would tap "excess profits" from HUD's Federal Housing Administration's (FHA) mortgage insurance program to build 1.5 million affordable housing units over 10 years. An industry-supported predatory lending bill, H.R. 833, would address "high cost mortgages" and preempt state or local anti-predatory lending law. Another predatory lending bill, H.R. 1663, would establish consumer safeguards for those receiving subprime home loans.

The "Ten Year Rule" that limits the use of tax-exempt bonds used to help firsttime homebuyers would be repealed by H.R. 284/S. 595 (with 388 co-sponsors). The Administration has proposed a homeowner tax credit ( H.R. 839/S. 198, with 250 cosponsors) modeled after the popular Low Income Housing Tax Credit. Reports of accounting irregularities by Freddie Mac have prompted calls for more stringent regulations of Freddie Mac and Fannie Mae. HUD has forwarded a final rule to the Office of Management and Budget to reform the Real Estate Settlement Procedures Act (RESPA) despite strong objections by the real estate and mortgage-broker industries and some in Congress. The Administration will submit its FY2005 HUD budget on February 2, 2004 with a plan to control the rising cost of housing vouchers. With the resignation of HUD Secretary Mel Martinez on December 12, the Senate will consider the nomination of Alphonso Jackson to be the new Secretary. Not all bills discussed in this report are cited in this summary. This report will be updated as issues develop and legislation proceeds in the 108th Congress.