President’s FY12 Budget Proposal Contains Important Preservation Provisions

Released on Feb 14, the Administration’s proposed FY12 budget includes a variety of items pertinent to Preservation efforts in Oregon. Most notably, the proposed HUD budget provides funding for the project-based Section 8 program ($9.4 billion, up by $871 million from FY10 enacted levels) that would ensure HUD can fulfill all existing contract commitments. While the overall tenant-based Section 8 program numbers increased, the proposed Tenant Protection voucher funding would represent a decrease ($75 million, down from $120 million in FY10), which could mean fewer available vouchers for qualified families displaced when certain HUD-assisted affordable housing exits the inventory. The proposed budget also includes significant cuts to programs that help produce housing for seniors, people with disabilities, and families.

The proposed FY12 budget for the Department of Treasury includes a provision to grant qualifying Preservation properties a 30% basis boost when using 4% Low Income Housing Tax Credits (LIHTCs), similar to that authorized for 9% LIHTCs in 2008 legislation. Another provision would allow income targeting in LIHTC units to increase to 80% of area median income (AMI), as long as they are offset by units serving households with lower incomes and the average percentage of AMI in the building does not exceed the 60% threshold. The Administration believes both provisions will stimulate greater use of LIHTCs in the Preservation of HUD-assisted and Rural Development properties.

Finally, the Department of Agriculture’s proposed FY12 budget represents a possible step backward for Preservation efforts in rural communities. While many of the Department’s housing programs would receive funding near FY10 levels, the proposed budget eliminates the Multifamily Preservation and Revitalization (MPR) demonstration program and the Preservation Revolving Loan Fund (PRLF).

(Note: FY11 funding levels are not used in comparisons above because Congress, as of February 16, has yet to pass FY11 appropriations bills.)

Click here for HUD’s press release, which includes a link to the HUD budget summary and information on the LIHTC provisions. Click here for the Treasury budget summary. Click here for the Agriculture budget summary.

— Posted on 2/16/2011