The HUD 209k Program

FHA’s Renovation Loan

HUD provides Federal housing assistance to local housing agencies (HAs) that manage low-income rental properties for families, the elderly and persons with disabilities. It also promotes public education and enforcement of fair housing laws.

HAs use income limits developed by HUD to decide which families are eligible for these programs. Often, long waiting periods apply.

Community Development Block Grant (CDBG) Program

The Community Development Block Grant (CDBG) Program, which was enacted in 1974, provides funding for urban, suburban and rural communities to help revitalize neighborhoods, renovate substandard housing, provide public services and expand economic opportunities, primarily for low- and moderate-income people. CDBG funds are flexible and can be used as a gap financing tool for projects that need other public and private funding.

The program is administered by the U.S. Department of Housing and Urban Development. HUD distributes CDBG funds to each state on the basis of a formula that takes into account population, poverty, incidence of overcrowded housing and age of housing.

Cities, towns and villages that participate as an entitlement jurisdiction receive annual CDBG funding through a formula allocation system administered by their state. The program has been weakened by recent cuts, with funding for the program dropping from $3.3 billion in FY 2010 to $150 million in the current year's appropriations process.

CDBG funding is provided by a variety of sources, including federal and state governments and the private sector. It is critical that these resources be protected and increased at the level needed to maintain a healthy economy and thriving communities.

In New York City, for example, the program's expenditures are largely allocated to housing rehabilitation and maintenance, public facilities and infrastructure improvement, economic development activities, planning and administration, and public services. Nationwide, however, the profile of CDBG funding and expenditures is quite different from the city's profile. Nationally, the most common expenditures are for housing rehabilitation and maintenance ($20.3 million), public facilities and infrastructure improvements, planning and administration and economic development.

Housing Choice Voucher (HCV) Program

The Housing Choice Voucher (HCV) Program provides a subsidy to low-income households for rental homes, which helps them afford the rent. This subsidy is paid directly to the landlord by Loudoun County on behalf of the participating family.

Under the Housing Choice Voucher program, families are assigned vouchers that are portable to a wide variety of rental units as long as the landlord agrees to accept the voucher. Families select their housing unit from a list of available units, including units in subsidized public housing projects and on the private market.

When a family selects a rental unit, the PHA reviews the property and determines whether it meets minimum standards of quality and safety. Once approved, the PHA assigns a unit to the family and negotiates a lease with the landlord.

If a family loses income, or its expenses change, they must report their changes to their PHA agent. These adjustments may result in an increase or decrease in the family’s subsidy payment, which is based on their income and the Payment Standard (PS) that the PHA has calculated.

The HCV program is administered locally by public housing agencies, or PHAs, which receive federal funds from the U.S. Department of Housing and Urban Development (HUD). The PHAs use these funds to administer the HCV program and provide housing assistance to eligible families.

Section 108 Loan Guarantee Program

The Section 108 Loan Guarantee Program, which was established through the CDBG program, allows communities to transform a small portion of their annual grant allocation into federally guaranteed loans. These loans can be used to finance a wide variety of economic development, housing and public facility projects.

Using this tool, cities and towns can create revitalization projects that drive economic growth and attract private investment into neighborhoods. It also provides communities with a flexible source of financing for large projects that may take several years to achieve full development potential.

In addition to financing economic development projects, Section 108 can be used to assist with the construction of public facilities and infrastructure, such as schools and highways. It can also be used to support the rehabilitation of public housing units and buildings.

The program has a history of strong performance, and is currently viewed as one of the most effective community investment tools available to state and local governments. It is one of the few programs that allow communities to use federal funds to finance projects that can have a significant impact on economic revitalization in their area.

For example, the City of Memphis is utilizing Section 108 to transform a former Sears distribution center into a mixed-use, mixed-income project that will include offices, retail space, healthcare and education services, and 265 residential units.

To ensure that Section 108 projects are appropriate for HUD's funding, they must meet the following "general principles": Provide an appropriate benefit to low and moderate income people; Promote economic revitalization; Aid in the elimination of slums or blight; Meet other community development needs that have a particular urgency and are of very recent origin; and Enhance the overall public health and safety of the community.

Public Housing Programs

Public Housing Programs offer affordable housing for low-income families. These programs are administered by state governments, non-profit or private developers, Public Housing Authorities (PHAs), and other agencies.

HUD funds these programs, and each program has different rules for applying, income limits, and renting. All tenants must abide by the rules and regulations.

Generally, housing assistance through these programs is provided in the form of lower rents that can increase or decrease depending on family income levels and circumstances. This type of assistance helps individuals and families avoid homelessness and other types of housing instability by limiting the amount they spend on housing each month.

In addition, public housing allows people to live in neighborhoods that have well-resourced schools and more employment opportunities. This may reduce their need to seek other forms of assistance like food, health-related services, child care, and transportation.

These public housing units also provide access to safe, decent, and sanitary dwellings. This is an important part of HUD’s overall mission to improve urban communities and create safer, more sanitary, and affordable places for everyone.

Currently, about 958,000 units of housing assistance are available nationwide through the public housing program. Most of these are located in racially segregated, under-resourced, and distressed neighborhoods.

HOPE VI Program

The HOPE VI Program is a federal program that provides funds to public housing authorities to revitalize severely distressed public housing projects. The program provides funding for major reconstruction, rehabilitation, and other physical improvements as well as community services to support both original and new residents.

The program aims to improve the living conditions of residents by replacing dilapidated housing with new housing that is more attractive and in mixed-income neighborhoods. It also aims to improve neighborhood quality and create viable social networks that will provide residents with the opportunities they need to reach their full potential.

In order for the HOPE VI Program to succeed, it must move residents in a manner that is least disruptive to their social relationships. Fortunately, the Utica Housing Authority (NBHA) is taking this concern seriously and has been working with residents and local partners to ensure that the relocation process will not negatively impact their lives.

NBHA has also taken measures to reduce the burden on relocated residents by making sure that they are able to receive all of their benefits in a timely manner and that they will not have to pay any gap payments as they move into their new home. In addition, NBHA has made sure that they have the necessary documentation to qualify for their Housing Choice Voucher (HCV) as required by URA and HUD.

Although HOPE VI is an excellent program that has changed the lives of many, it must be monitored carefully to make sure that the program is being effective and that residents are being satisfied with their new housing and community. This will require monitoring a number of key variables, including the success of community and supportive services, changes in neighborhood racial demographics, and the effectiveness of resident programs.

Supportive Housing Program

The Supportive Housing Program provides loans to non-profit and for-profit developers of permanent supportive housing with on-site social services for people who are homeless or living with disabilities. Projects must provide 60% of units for homeless or disabled individuals or families with a disabled head-of-household and the remaining 40% can be rented to households from the community earning up to 60% of the area median income (AMI).

The goal of the program is to improve the lives of individuals experiencing homelessness by providing affordable housing and wrap-around supportive services. These services can include substance abuse treatment, mental health care, and assistance with housing and employment.

Studies have shown that individuals who receive these services experience increased housing stability and improved health outcomes. They also spend less time in homeless shelters, hospitals, emergency rooms, jails and prisons, saving taxpayers money.

To maximize savings from this model, however, it is essential to target those who most need the services provided by supportive housing. People with chronic illnesses or multiple disabilities who are homeless for a long time, or those who fail to succeed with other treatments, are likely the most cost-effective group to target for supportive housing.

States should expand Medicaid eligibility to more individuals who are homeless and need the services offered by supportive housing. Many states have not expanded Medicaid since health reform, and only a small fraction of people who need supportive housing are currently covered by Medicaid.