House, Senate Agree On Bill to Give Funds Totaling $1.5 Billion For HOME Program
WASHINGTON -- House-Senate conferees have agreed on a bill to give $1.5 billion in federal funds to the new housing affordability program next year and temporarily waive a requirement that state and local governments kick in part of the funding for the program.
The bill, which also makes appropriations for the Department of Housing and Urban Development for fiscal 1992, must now go back to the House and Senate for final approval, and then to President Bush for his signature.
HUD Secretary Jack Kemp said in a Sept. 25 letter to lawmakers he would recommend a veto if they funded the program above $1 billion and if they did not require state and local contributions next year. But housing lobbyists said they were confident the President would sign the bill.
The housing affordability program, known as HOME, was created by Congress last year and requires the federal government to match financial contributions state and local governments make to low-income housing projects. HUD has said it would allow general obligation bonds to count toward the match, and housing industry officials have urged HUD to make private-activity bonds and revenue bonds eligible as well.
The $1.5 billion funding level was approved by the conferees at a brief meeting convened on Thursday that caught the housing industry by surprise. That level represents a compromise between the Senate's proposal for $2.0 billion and the House proposal of $500 million. On the matching requirement, conferees agreed to a Senate provision waiving that requirement in 1992, allowing state and local governments to receive federal funds without coming up with their own contributions.
The conferees' decision to waive the match "represents a real recognition that many of those governments simply don't have those those matching funds and the HOME program wouldn't work as well with a match requirement this year," said John McEvoy, executive director of the National Council of State Housing Agencies.
Waiving the match "will be a great jump-start for the program in some very difficult times," and will probably make state and local governments more likely to want to contribute matching funds in later years, once their financial situations improve, Mr. McEvoy added. That is because next year, "they will get hooked on HOME funds," he said.
Some housing lobbyists have said that without the matching requirement, state and local governments might not have any need to issue tax-exempt bonds under the program next year. But others disagree, saying that even if they are not required to supplement the federal funds, they will still want to contribute to the housing projects under the program.
"Waiver of the match will give the program a fair opportunity to get off the ground, and, coupled with bonds and other subsidies, will enable communities that have a high priority for construction of new affordable housing to [go forward] without being constrained by a wholly unworkable matching requirement," said John C. Murphy, executive director of the Association of Local Housing Finance Agencies.