The two biggest low-income housing programs in the United States are public housing and the Section 8 programs. Section 8 funds are distributed under HUD's Housing Certificate Fund. Other HUD programs fund housing for people living with AIDS (Housing Opportunities for Persons with AIDS, or HOPWA), elderly people, Native Americans and Native Hawaiians, and persons with disabilities. A new 2005 program, the Prisoner Reentry Initiative, helped ex-prisoners find housing as well as with job training and other services.
The homeownership voucher program provides vouchers to participants in the tenant-voucher programs who meet income and eligibility requirements to help them buy their first homes. The program assisted 2,000 low-income families from 2002 through 2005; in 2006 the program plans to assist 3,000 families with purchasing homes.
In 2004 the Self-Help Homeownership Opportunity Program (SHOP) supported the construction of 5,200 new homes for low-income people. Other HUD programs aim to increase privately owned low-income housing stock. FHA provides mortgage insurance for multi-family projects, and the Low-Income Housing Tax Credit program, available to developers who provide a portion of their projects at low rents, added an estimated 100,000 low-income units in 2003. Funding under HUD's Community Development Block Grant program also has money for low-income housing.
HUD maintains demographic and income data only on participants in the major programs. For that reason, information on the characteristics of participants in many other HUD subsidy programs aimed at low-income people is unavailable. The programs cited above do not include mortgage insurance and other FHA programs aimed to assist the more affluent general population to own a home.
Federal Home Loan Bank
Federal law requires each of the twelve district Federal Home Loan Banks to establish an Affordable Housing Program. Member banks then provide grants and below-market loans to organizations for the purchase, construction, and/or rehabilitation of rental housing. Only 20% of the units created with these funds have to be affordable for and occupied by very low-income households.
In addition, the Federal Home Loan Banks offer a loan program called the Community Investment Program. This provides long-term funding at fixed rates to develop rental housing or finance first-time home purchases for families and individuals with incomes up to 115% of the area's median income. This means that middle-income people can build or buy homes using these funds, but the expenses are considered part of the low-income housing assistance budget.
Rural Housing Programs
A variety of rural housing programs are administered by the Rural Housing Service (RHS), a division of the U.S. Department of Agriculture. (Table 5.8 lists program data from 1979-99.) These programs make federal money available for housing in rural areas, which are considered places with populations of 50,000 or less. Eligibility for rural housing programs is similar to that of subsidized urban programs. The requirements vary from region to region, and applicants must meet minimum and maximum income guidelines. The subsidies come in the form of grants or low-interest loans to repair substandard housing; subsidized mortgages for low-income home ownership; and grants to cover down payment and purchasing costs of low-income homes.
Table 5.8 shows the various programs that were available under RHS funding in millions of dollars and the number of households helped in 1999. In 2003, $1.6 billion was appropriated; of that, $721 million went to
Data on Rural Housing Service's housing programs, 1979-99
[Dollars in millions]
SOURCE: William B. Shear, "Table 1. Data on RHS's Housing Programs," Rural Housing Service: Opportunities to Improve Management, GAO-03-911T, U.S. General Accounting Office, June 19, 2003, http://www.gao.gov/new.items/d03911t.pdf (accessed March 11, 2005)
|RHS housing program
||Total dollars spent, fiscal year 1979
||Total dollars spent, fiscal year 1994
||Total dollars spent, fiscal year, 1999
||Number of households helped, fiscal year 1999
||Type of assistance
|Single-family housing direct loans (sec. 502)
||Loans subsidized as low as 1 percent interest
|Single-family housing guaranteed loans (sec. 502)
||No money down, no monthly mortgage insurance loans
|Single-family home repair grants and loans (sec. 504)
||Grants for elderly and loans subsidized as low as 1 percent interest
|Single-family housing mutual self-help grants (sec. 523)
||Grants to nonprofit and public entities to provide technical assistance
|Multifamily direct rural rental housing loans (sec. 515)
||Loans to developers subsidized as low as 1 percent interest
|Multifamily housing guaranteed loans (sec. 538)
||Guaranteed loans for developing moderate-income apartments
|Multifamily housing farm labor grants and loans (secs. 516/514)
||Grants and loans subsidized at 1 percent interest
|Multifamily housing preservation grants (sec. 533)
||Grants to nonprofit organizations, local governments, and Native American tribes, usually leveraged with outside funding
|Multifamily housing rental assistance (sec. 521)
||Rental assistance to about one-half the residents in RHS rental and farm labor units
*Dollar amounts represents private-sector loan levels guaranteed by RHS or loans made directly by RHS during the year. Actual federal outlays are much lower because they cover the subsidy cost, not the face value of the loans or guaranteed loans. The subsidy cost is the estimated long-term cost to the government of a direct or guaranteed loan calculated on a net present value basis, excluding administrative costs.
assist renters and $4.2 million toward single-family home loan guarantees.
In the fourth quarter of 2004, homeownership in rural areas, at 76.4%, was 7.2% higher than the national rate (69.2%), but affordable housing is in short supply in rural areas. Much of the rural low-income housing where renters, migrant workers, and a high population of minorities live is substandard. There are four major areas affected by housing inadequacies: the Mississippi Delta, Native American trust lands, the Colonias bordering Mexico, and Appalachia.
Unfortunately, like HUD, RHS has been plagued by accusations of mismanagement. The GAO report "Rural Housing Services, Opportunity to Improve Management" (June 2003) found that the RHS could be improved by reducing costs and centralizing administration. A May 2004 GAO report said that the RHS had consistently overestimated its budget needs ("Rural Housing Service: Agency Has Overestimated Its Rental Assistance Budget Needs over the Life of the Program," GAO-04-752).
Projects for Assistance in Transition from
Projects for Assistance in Transition from Homelessness (PATH) is a federally funded program administered by the federal Center for Mental Health Services through grants to state mental health agencies. These state agencies provide PATH-funded services to homeless people with mental illness primarily through local or regional mental health service providers. PATH funds can be used for outreach, screening, diagnostic treatment, habilitation, rehabilitation, community mental health services, case management, supportive and supervisory services in residential settings, and other housing-related services.
Education for Homeless Children and Youth (EHCY)
In response to reports that over 50% of homeless children were not attending school regularly, Congress enacted the McKinney-Vento Act's Education for Homeless Children and Youth (EHCY) program in 1987. The program ensures that homeless children and youth have equal access to the same free, appropriate education, including preschool education, provided to other children. EHCY also provides funding for state and local school districts to implement the law. States are required to report estimated numbers of homeless children and the problems encountered in serving them. The McKinney-Vento Homeless Education Assistance Act, part of the No Child Left Behind Act of 2001, reauthorized the program and included the following new guidelines.
- Homeless children cannot be segregated.
- Transportation has to be provided to and from schools of origin if requested (a school of origin is the school the student attended when permanently
housed, or the school in which the student was last enrolled).
- In case of a placement dispute, immediate enrollment is required pending the outcome.
- Local education agencies (LEAs) must put the "best interest of the child" first in determining the feasibility of keeping children in their school of origin.
- LEAs have to designate a local liaison for homeless children and youth.
- States have to subgrant 50% to 75% of their allotments under EHCY competitively to LEAs.
Unaccompanied Youth Services
The Runaway and Homeless Youth Program (RHYA), administered by the Department of Health and Human Services, began in 1974 and provides financial assistance to community-based crisis and referral centers that serve runaway and homeless youth and their families. Transitional Living Program for Older Homeless Youth was created in 1988 as part of RHYA to assure long-term assistance to this segment of the homeless ("Family and Youth Services Bureau—Transitional Living Program for Older Homeless Youth," U.S. Department of Health and Human Services http://www.acf.dhhs.gov/programs/fysb/tlp.htm, March 10, 2004). Services are geared to the following areas:
- Living accommodations that are safe and stable
- Skill building on two levels: life-skills such as housekeeping, budgeting, and food preparation, and interpersonal skills such as relationship-building, decision-making, and stress management
- Education area addresses furthering secondary and post secondary achievement, job preparation, and substance abuse education
- Mental and physical health care, which includes counseling, health assessment, and treatment in emergencies