Several Department of Housing and Urban Development (HUD) programs have received funding increases in fiscal 2010, including Sec. 8, public housing, homeless assistance, and community development.

In addition, the final appropriations bill (H.R. 3288) passed by Congress and signed into law by President Obama provides initial funding for the administration's Choice Neighborhoods initiative to promote neighborhood revitalization through the redevelopment of distressed and public and assisted housing.

Choice Neighborhoods is intended to be an extension of, and replacement for, the HOPE VI program for distressed public housing. Because of the lack of authorization legislation for the program, Congress wasn't willing to fully adopt the administration's plan.

Instead, it appropriated $200 million for HOPE VI, up from $120 million in fiscal 2009, with $65 million set aside for a Choice Neighborhoods demonstration to transform, rehabilitate, and replace public and assisted housing and turn poor neighborhoods into mixedincome communities with appropriate services, transportation, schools, and access to jobs. Funds can also be used to convert vacant or foreclosed properties to affordable housing.

The bill provides $18.2 billion for Sec. 8 tenant-based assistance and $8.6 billion for Sec. 8 project-based assistance for fiscal 2010 compared with 2009 funding levels of $16.8 billion and $7.1 billion, respectively.

The bill also includes $2.5 billion for the public housing capital fund compared with $2.4 billion in fiscal 2009; $4.8 billion for the public housing operating fund, up from $4.5 billion in 2009; and $1.9 billion for homeless assistance grants, up from $1.7 billion in 2009.

The appropriation for community development was boosted from $3.9 billion to $4.4 billion, with the funding for formula Community Development Block Grants raised from $3.6 billion to $4 billion.

For HUD mortgage programs, the bill provides commitment limits of $400 billion for the Federal Housing Administration Mutual Mortgage Insurance Fund; $15 billion for General and Special Risk Program Account, which covers multifamily loans; and $500 billion for Ginnie Mae securities.

House jobs bill includes funds for trust fund, public housing

The House approved a jobs bill (H.R. 2847) in the final days of the first session of the 111th Congress that includes funds for the affordable housing trust fund and public housing.

The legislation was awaiting Senate action at press time.

The bill includes $1 billion for the trust fund, along with $65 million for project-based voucher or rental assistance, to be allocated according to the trust fund formula and used with trust fund grants.

In addition, the measure has $1 billion for competitive public housing capital grants. Public housing authorities (PHAs) receiving grants would have to give priority to projects for which contracts can be awarded based on bids within 120 days. In addition, housing authorities would have to give priority to projects that are already under way or included in their five-year capital plans and to the rehabilitation of vacant units.

Funds could not be used for rental assistance or operating purposes, and they would not be subject to any legislation that restricts the use of public housing funds to the provision of replacement housing.

House passes tax extender bill with refundable housing credit

Before adjournment, the House also passed and sent to the Senate a tax extender bill (H.R. 4213) that includes a refundable low-income housing tax credit for 2010—in effect, a one-year extension of last year's tax credit exchange program.

Like the credit exchange program, the refundable credit proposal would allow state housing agencies to trade a portion of their tax credit allocations for grants that they could provide to taxpayers to finance low-income housing. The grants wouldn't reduce the tax basis of a qualified building.

An agency's maximum refundable credit amount would be 10 times 85 percent of the total of its unused 2009 housing credit ceiling, any returns during 2010 of previously allocated credits, 40 percent of its 2010 credit allocation, and 40 percent of its share of the 2010 national pool. This is the same formula used to determine the maximum credit exchange amount in 2009.

Any refundable credits not used to make grants before Jan. 1, 2012, and any grants to taxpayers returned on or after that date would have to go back to the Treasury Department.

The bill would also extend the New Markets Tax Credit program through calendar 2010, with $5 billion in investment authority for 2010.

Barry G. Jacobs is editor of Housing and Development Reporter, the nation's premier source for in-depth, factual coverage of all aspects of affordable housing and community development. The two-part publication includes informed reports and insightful analyses in “HDR Current Developments,” and an up-to-date compilation of essential documents in the “HDR Reference Files.” Jacobs is also the author of the annually updated HDR Handbook of Housing and Development Law. For more information, call (800) 723-8077.