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HUD Secretary Presents Department’s Budget for FY 2013

Before a senate subcommittee Thursday, ""HUD"":http://portal.hud.gov/hudportal/HUD Secretary Shaun Donovan revealed details of his department's 2013 fiscal year budget and presented a breakdown on what programs the funds will help.

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Overall, HUD's budget for the fiscal year 2013 provides $44.8 billion for housing programs, an increase of 3.2 percent or $1.4 billion compared to 2012. However, Donovan further explained that the program funding level is offset by $9.4 billion in projected FHA and Ginnie Mae receipts, which means the budget is actually $35.4 billion, or 7.3 percent below the fiscal year 2012 level of $38.2 billion.

""The Budget reflects the reality that we cannot create an economy built to last without taking responsibility for our deficit,"" said Donovan.

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Overall, 83 percent of HUD's total budget for 2013 will go towards providing rental assistance to over 5.4 million residents of HUD-subsidized housing, including public housing and HUD grants to homeless assistance programs.

The budget will also provide $55 million housing counseling to assist 185,000 low-to moderate-income families and to provide training to over 4,800 counselors.

HUD is also requesting $400 billion in loan guarantee authority for the Mutual Mortgage Insurance Fund to provide a projected 0.8 million single-family mortgages.

Another $25 billion is being requested for the General and Special Risk Insurance Fund, which is expected to provide 156,000 units in multifamily housing properties and about 80,600 beds in healthcare facilities.

""At a time when liquidity and access were needed most in the housing market to facilitate the recovery of the broader economy, FHA stepped in to ensure that mortgage capital continued to flow,"" said Donovan. ""However, FHA's expanded role is and should be temporary.""

Donovan also added that FHA's market share is shrinking for the first time since 2006, a sign that private capital is returning to the mortgage market.

Underscoring the important role of the FHA for borrowers “the conventional market does not adequately serve,” Donovan said over 30 percent of all FHA-insured homebuyers are minorities, and over half of all African Americans and forty-five percent of Hispanics who bought a home last year were financed through FHA.

About Author: Esther Cho

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