Budget includes renewal of all Section 8 contracts The Clinton administration has sent a fiscal 1999 budget package to Congress that would renew all expiring Section 8 rental assistance contracts, covering about 2 million units. The contracts would be renewed for one-year terms.
The budget would also expand the number of assisted units by providing money for about 100,000 incremental Section 8 vouchers. No incremental vouchers were funded in fiscal 1998.
The incremental assistance includes 50,000 vouchers to help welfare recipients who need housing aid to find or keep a job. Local housing authorities would compete for these funds to implement welfare-to-work plans developed in conjunction with the local welfare agency and private industry.
The budget also includes 34,000 incremental vouchers to help homeless families move from emergency shelters and transitional housing into permanent housing. The remaining incremental vouchers would be used for elderly housing and certain targeted programs, such as family unification and witness protection.
For the HOME housing block grant program, in which the U.S. Department of Housing and Urban(HUD) provides funds to support state and local affordable housing programs, the administration is proposing $1.550 billion, an increase from this year's $1.5 billion. In addition, the budget calls for the creation of a new $100 million HOME loan guarantee program to support large-scale housing developments. Under this program, participating jurisdictions could leverage their HOME funds by issuing government-guaranteed obligations in an amount up to five times their current HOME grant.
The HUD budget also includes a commitment limit of $18.1 billion for Federal Housing Administration-insured multifamily mortgages, up from $17.4 billion in fiscal 1998. Other elements of the budget include $50 million to support the redevelopment of contaminated urban "brownfield" industrial sites, double this year's funding, and $52 million for fair housing activities, up from $30 million. HUD Secretary Andrew M. Cuomo has made the fight against housing discrimination a priority for the department.
For rural housing, the administration budget includes $100 million for the Section 515 rural rental housing program, down from $150 million this year. The Rural Housing Service (RHS) estimates that the 1999 funding would support theof 1,667 units and the rehabilitation of 4,146 units.Whi le cutting 515 funding, the budget also includes a big increase in the Section 538 rural multifamily guaranteed loan program, which finances housing for tenants with incomes up to 115% of area median. The budget calls for a 1999 program level of $150 million to finance construction of 4,087 units, up from $20 million this year.
Administration proposes to tighten controls on REITs The tax provisions of the administration's budget include some restrictions on the activities of real estate investment trusts (REITs).
One proposal would limit the activities of the handful of paired, or "stapled," REITs which were grandfathered when the 1984 tax act generally prohibited the coupling of a REIT and a regular corporation to get around the ban on the operation of properties by REITs.
The administration proposal would treat the stapled entities as a single entity for purposes of REIT qualification with respect to properties acquired on or after the date of first committee action on legislation.
Another provision would tighten the rules against active REIT property management through the ownership of other corporations. The current 10% limit on REIT ownership of the voting stock in another corporation would be expanded to cover 10% of the vote or value of all classes of stock.
The rules on closely held REITs would also be modified so that no person could own REIT stock with more than 50% of the voting power or value of all classes of stock.
Another administration tax proposal would seek to encourage the redevelopment of brownfield sites by making permanent the provision for the expensing of remediation costs. Under current law, expensing is available only for costs paid or incurred on or before Dec. 31, 2000.
* Section 8: Renewal of all expiring contracts plus 100,000 incremental vouchers
* HOME Housing Block Grant Program: $1.550 billion plus new loan guarantee program
* FHA-Insured Financing: $18.1 billion for multifamily loans
* Section 515 Rural Rental Housing Loans: $100 million
* Section 538 Guaranteed Rural Multifamily Loans: $150 million
* Elimination of $4 million debt limit
* Debtor requirement to begin making payments to creditor on the later of 90 days after filing bankruptcy or 30 days after court decision
* Interest rates for debtor's payments set at mortgage rate
* Payments can be made from project rents