President Trump’s Administration released the Fiscal Year (FY) 2021 budget request, “A Budget for America’s Future.” Overall the $4.8 trillion budget requests increased funding for infrastructure, the military (including the new U.S. Space Force) and the construction of a southern border wall while cutting funding across non-defense discretionary agencies, as well as Medicaid. The budget projects adding $3.4 trillion to the national debt by 2024 and extends the individual income tax cuts that were set to expire in 2025.
HUD is allocated $47.9 billion in funding, a 15.2 percent decrease over FY 2020 enacted levels with notable zeroing out of the HOME program, Community Development Block Grants (CDBG), Public Housing Capital Fund, Choice Neighborhoods and HOPE VI. Section 514, 515 and 516 loans/grants at the U.S. Department of Agriculture (USDA) and the Housing Trust Fund and the Capital Magnet Fund received no funding. Tenant Based Rental Assistance is funded at 18.8 billion, a 21 percent decrease over FY 2020 funding levels.
The administration once again requested $100 million for the Rental Assistance Demonstration (RAD) while slashing funding for the Public Housing Capital and Operating Funds. The budget calls for the complete elimination of the RAD cap.
The budget requests minor increases for Sections 202 and 811, as well as Project-Based Rental Assistance and Healthy Homes & Lead Hazard. For more information, please view the updated budget chart for select HUD and USDA programs from the National Low Income Housing Coalition.
Developers that financed deals in 2019 with sources of funding that the President’s budget eliminates or decreases are encouraged to contact their congressional representatives (based on both where the deal is located and your personal representatives) to explain the importance of these funding sources to make the deals pencil out. Stay tuned for more advocacy materials!