President Signs Omnibus Legislation into Law, 10% Increase for HUD, LIHTC Improvements

On March 23, President Trump signed into law the 2018 omnibus spending bill (HR 1625). Bill language was released late Wednesday night and the House of Representatives and Senate subsequently passed the bill on Thursday. The news of passage comes shortly after President Trump threatened via Twitter to veto the bill on Friday morning. The bill will fund the Federal Government for the remainder of the 2018 fiscal year and comes after several stopgap funding measures.

What’s In the Bill:

Low Income Housing Tax Credit
The LIHTC received some improvements adopted from the Cantwell-Hatch Affordable Housing Credit Improvement Act:

  • Allocation Increase: A 12.5 percent increase in Housing Credit allocation for four years (2018-2021)
  • Income Averaging: The income averaging option allows projects to accept tenants with higher average median incomes as long as the overall average of tenants in the project does not exceed 60% AMI. This will allow for LIHTC projects to serve a greater range of incomes.

Unfortunately, a provision creating a fixed 4% floor for tax-exempt bond financed projects was not included.

HUD
At $42.7 billion, HUD sees a 10% funding increase over Fiscal Year 2017. That’s in stark contrast to President Trump’s proposed 19% cut to the Department and exceeds proposals from both the House and Senate sub-committee markups (a 4% increase in the Senate and a 1% cut in the House). The increased numbers stem from last month’s bipartisan budget agreement.

The Rental Assistance Demonstration (RAD) program sees an increased cap from 225,000 units to 455,000 units as well as extended authority to cover PRAC. Detailed funding numbers for specific HUD programs can be found in the chart below.

HUD / RD PROGRAMS Enacted Funding FY 2017 (in Millions) Omnibus Proposed FY 2018 (in Millions) Difference Between 2017 Enacted and 2018 Omnibus
Project-Based Rental Assistance  $     10,816.00  $     11,515.00  $          699.00
Tenant-Based Rental Assistance  $     20,292.00  $     22,015.00  $       1,723.00
Public Housing Capital Fund  $       1,941.50  $       2,750.00  $          808.50
Homeless Assistance Grants  $       2,383.00  $       2,513.00  $          130.00
Choice Neighborhoods Initiative  $          138.00  $           150.00  $            12.00
Housing for the Elderly Program  $          502.40  $           678.00  $          175.60
HOME Investment Partnerships  $          950.00  $       1,362.00  $          412.00
Community Development Block Grants  $       3,060.00  $       3,300.00  $          240.00
Public Housing Operating Fund  $       4,400.00  $       4,550.00  $          150.00
Housing for Persons with Disabilities Program  $          146.20  $           229.60  $            83.40
Section 515 Rental Housing  $             35.00  $             10.52  $           (24.48)
Section 521 Rental Assistance  $       1,405.00  $       1,345.29  $           (59.71)
RD Multi-Family Housing Revitalization  $             41.00  $             47.00  $               6.00
Family Self-Sufficiency Program (FSS)  $             75.00  $             75.00  $                   –
Native American Housing Block Grant  $          654.00  $           655.00  $               1.00
RAD  $                   –  $                    –  $                   –
Native Hawaiian Housing Block Grants  $               2.00  $               2.00  $                   –
HOPWA  $          356.00  $           375.00  $            19.00
FHA MMI Fund Account  $          130.00  $           130.00  $                   –
FHA — General and Special Risk Insurance Fund  $                   –  $                   –
Fair Housing Programs  $             65.90  $             65.30  $             (0.60)