President Donald Trump’s administration will seek to slash spending on affordable housing and community development programs, a plan that housing advocates condemned as "immoral" and a blow to voters who sent him to the White House.
The administration is seeking to cut spending on affordable housing and community development and wants mortgage lenders to fund technology fixes at the Department of Housing and Urban Development, according to a budget draft obtained by POLITICO. The proposal also eliminates the Housing Trust Fund, a program financed by Fannie Mae and Freddie Mac profits.
In all, the request cuts funding by some $6 billion for fiscal year 2018, to about $40 billion. The draft, dated May 4, might not reflect the administration’s final spending request, which is expected next week. A HUD spokesman did not respond to requests for comment.
The document puts increased responsibility on state and local governments and calls for the private sector to do more to meet community needs, a key goal of HUD Secretary Ben Carson.
The budget “recognizes a greater role for state and local governments and the private sector in addressing community development and affordable housing needs,” the document states.
Skeptics say some of those programs exist precisely because private money hasn’t stepped up.
"Private companies won’t build water and sewer; they expect the cities and counties and states to provide this infrastructure," said Matt Chase, executive director of the National Association of Counties.
“They’ve taken the Heritage Foundation budget, and we’re trying to educate them on the real-world impact,” Chase said. “This is no longer a think tank exercise.”
The biggest cut would eliminate the $3 billion Community Development Block Grant program, a state and local entitlement that benefits low- and moderate-income communities. The grants support a range of economic development projects, including roads, sewers and housing.
The document also zeros out Choice Neighborhoods revitalization grants and the HOME Investment Partnerships Program, which leverages private funds to expand the supply of affordable housing.
Rental assistance to tenants would fall by $974 million, to $19.3 billion, with the elimination of a housing program for veterans and reduced spending on Section 8 and other voucher programs. Capital funding for public housing would fall by two-thirds.
Diane Yentel, president of the National Low Income Housing Coalition, called the spending plan "immoral."
"The budget reflects a cruel indifference to the millions of low-income seniors, people with disabilities, families with children, veterans, and other vulnerable people who are struggling to keep a roof over their heads," Yentel said.
Cuts to HUD’s safety net and development spending, combined with reductions at other agencies, will hit rural communities the hardest, Chase said.
“These chainsaw cuts go across the budget,” Chase said. “All these programs were to help build community infrastructure for people and places that have been left behind.”
HUD’s mortgage agencies, which help low-income borrowers buy homes, would get small funding increases. The administration wants to levy $30 million in fees on lenders who sell mortgages through the Federal Housing Administration, money that would be used to upgrade technology and risk-management systems.
The budget includes a slight increase in staffing for Ginnie Mae, which pools and sells FHA loans and is second-largest provider of U.S. mortgage liquidity.
The draft budget maintains funding to support and enforce the Fair Housing Act, a Civil Rights-era law to end housing discrimination. Before becoming HUD secretary, Carson had called a recent fair housing rule a "social-engineering" scheme.