The White House publicly presented President Joe Biden’s motion for discretionary funding, also known as “tight budget,” to Congress on Friday before its full budget proposal is expected this spring. The application contains several provisions relating to housing. While the Home Equity Conversion Mortgage (HECM) program is not mentioned in the document, there are provisions regarding senior housing that may be relevant to the reverse mortgage industry in its mission to serve older Americans.
In relation to the requested allocation to the U.S. Department of Housing and Urban Development (HUD) for fiscal year 2022, the Biden government is requesting $ 68.7 billion for the HUD, $ 9 billion more than it was in 2021 led by former President Donald Trump and former HUD Secretary Dr. Ben Carson.
Older priorities in the housing
While much of the President’s housing priorities understandably focus on reducing homelessness and improving the construction of affordable housing for low-income people, the HUD proposal includes certain priorities specifically aimed at helping the elderly.
“To address the critical shortage of affordable housing in communities across the country, the discretionary motion provides for a $ 500 million increase in the HOME investment partnership program for a total of $ 1.9 billion to build and renovate affordable rental housing and to support other housing -related needs, ”the White House document reads. “This is the highest level of funding for HOME since 2009. In addition, the application provides for $ 180 million to support 2,000 new, permanently affordable housing units for the elderly and people with disabilities to enable the elderly and people with disabilities to live independently to support.”
The White House also intends to increase the Funding Allocation for the Social Security Administration (SSA) by $ 1.3 billion, an increase of 9.7% over the previous year allocation under the previous administration. According to the document, this is a key focus of the initiatives in the new proposal to support the elderly.
“The Social Security Administration (SSA) has a responsibility to provide essential benefits to retirees, survivors, people with disabilities and older Americans with limited incomes and resources,” the proposal said. “The 2022 discretionary motion would improve the timely processing of disability claims, expand the reach to vulnerable populations, ensure that SSA makes the correct payments to qualified individuals, and modernize information technology to improve access to services for seniors and people with disabilities . “
HUD response, HECM details to follow
HUD Secretary Marcia Fudge released a statement responding to the government’s request to increase government investment in HUD and its programs The Department’s mission and the programs it oversees.
“Addressing our country’s pressing housing problems and building a more affordable, equitable and resilient housing system requires strong federal leadership backed by solid federal funding,” Secretary Fudge said in a statement. “President Biden’s fiscal 22 fiscal discretionary funding filing takes a look at years of inadequate and detrimental spending claims and instead empowers HUD to meet the housing needs of families and communities across the country. I’m particularly pleased that the motion proposes more than $ 30 billion to extend home vouchers to an additional 200,000 low-income families. I look forward to working with the President to advance HUD’s critical priorities. “
Regarding specific details on the White House budget requests for more directly relevant reverse mortgage-related programs – including the HECM program itself – a ministry spokesman told RMD that these details will be included in the White House’s full budget proposal later submit in spring. Details related to the HECM program are not yet ready to be released, the spokesman said.
Last year’s HECM proposals
When the new budget proposal arrives later this year, it will likely look significantly different from this one final budget proposal Introduced by the Trump administration in 2020.
Last February, the legislative and tentative proposals contained in the HUD Congress Reasons for the Trump White House Budget Proposal for the FHA Fund aimed to remove the HECM loan cap imposed by Federal Housing Administration (FHA) can be insured while also building in support for other legislative initiatives that would affect the HECM program.
This included a waiver of the HECM advisory requirement to give HUD the authority to provide advisory services for all HECM transactions, as well as an update of the actuarial analysis used by the FHA to determine the adequacy of its original HECM insurance premiums in 2001. The FHA under the Trump administration did not believe that the study that led to this actuarial basis was no longer “adequate” in the face of modern concerns.
The Trump proposal also reiterated a previously introduced proposal to introduce regional HECM credit limits rather than operating from a single national limit. This move has been considered “bad advice” in the past by the CEO and alumnus of the National Reverse Mortgage Lenders Association President Peter Bell.
“Applying the forward mortgage concept of ‘territorial restrictions’ to a financial resource (HECM) created at a completely different time in their lives for a completely different population would be inadvisable,” Bell said in a statement to a House of Representatives before an HECM -focused Listen in September 2019. “This discussion took place in the [Financial Services] Committee when the single national border was enacted in 2007-2008 and this provision should remain in place. “
The pandemic and what’s in previous HUD decisions
The equation for the Biden administration’s HECM program proposals is also likely to change the COVID-19 coronavirus pandemic, declared a national emergency by President Trump a month after his administration submitted its final budget proposal to Congress.
According to former HUD Deputy Secretary Brian Montgomery, who hopes his team’s successors will take the time to understand why certain decisions have been made, the Trump administration has several relief efforts aimed at wider housing and the HECM program specifically implemented, a crisis that is difficult to react to.
“So here you are offering what you think is a good political idea. But then someone says, “Someone did that in a previous administration.” And you answer, “Okay, did it work?” That reaction that “if someone from the other party tried, it must be bad,” I just want people to avoid that temptation, “Montgomery told RMD in one exclusive interview earlier this year. “And it’s a heavy temptation to avoid, oh boy. Trust me. The new administration has only been there for a few weeks. So hopefully when they start setting up their team […] I hope you understand why we came to a decision and the process behind it. “
Some of the original relief efforts put in place by the Trump administration were carried over to the Biden administration, including a renewed expansion of foreclosure and eviction moratoriums as well as the ability to only complete externally Assessments.