WASHINGTON -- The Office of Management and Budget is proposing to terminate the fledgling housing preservation program, under which 501(c)(3) organizations were expected to issue tax-exempt bonds to purchase low-income housing projects, according to preliminary fiscal 1996 budget documents.

The budget office is also proposing sharp cuts in the so-called Section 8 rent subsidy program, and acknowledges that the cuts may cause some of the federally insured multifamily housing projects supported by the subsidies to default on their loans and underlying bond issues, according to the documents, which were obtained by The Bond Buyer.

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