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The United States Department of Housing and Urban Development, or HUD, is a government agency that helps citizens attain one of life’s most basic necessities: safe, affordable housing.
Through legal and administrative action, community development programs, and public outreach, HUD ensures everyone can access “safe and affordable” housing. To do so, HUD offers and participates in programs that:
- Reduce homelessness
- Support homeownership
- Increase access to safe, affordable rental housing
- And fight housing discrimination
Because that’s a big job with a lot of variables, HUD contains dozens of offices and programs to fulfill its mission. Let’s look at a small slice of what HUD has to offer.
What Is the U.S. Department of Housing and Urban Development (HUD)?
The Department of Housing and Urban Development was created under President Lyndon B. Johnson’s “Great Society” agenda. Officially designated in 1965, its missions include supporting housing markets and inner-city homeownership by improving housing affordability. 1
As a “cabinet-level” agency, HUD is captained by the HUD Secretary, who is presidentially appointed and senatorially approved. The position is currently held by Marcia Fudge, who took office in March 2021. 2
HUD’s primary mandate is to oversee various federal housing programs to promote fair housing opportunities. The agency’s 2022-2026 strategic plan states that the department’s mission is to: “Create strong, sustainable, inclusive communities and quality affordable homes for all.” 3
Some of its initiatives include:
- Enforcing fair housing laws
- Strengthening communities and the U.S. housing market
- Improving people’s lives by improving their housing situation
- Ensuring there’s enough quality, affordable rental housing to meet demand
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What Resources Does HUD Provide to Americans?
HUD’s programs are designed to increase affordable housing, fight housing discrimination, and support vulnerable populations in need of assistance. To do so, HUD provides several services and resources to the American people.4
HUD is perhaps most well-known for providing various forms of public housing assistance, including subsidized housing and Section 8 vouchers. To do so, HUD works with government agencies, private for-profit, and private and religious non-profits to achieve its goals. The agency estimates around 1.2 million households currently live in public housing. 5
HUD also enforces the Fair Housing Act, which prohibits discrimination based on sex, race, color, national origin, religion, family status, and disability. Its enforcement efforts include investigating cases concerning refusal to rent or sell to, or falsely misleading, individuals or families based on these factors. 6
Additionally, HUD aids those who need to repair or renovate their homes to ensure safety or improve quality and value. It does so through federal loan programsand connections with community-based lenders and home improvement programs. 7
Perhaps less well-known are HUD’s “Continuums of Care” programs. These regional or local planning groups help stem homelessness by applying for HUD grants to fund shelters, food, and transition services for local homeless populations. 8
Lastly, HUD provides targeted support to veterans eligible for VA health care through HUD-VASH. This joint partnership between HUD and the VA “helps homeless Veterans and families find and sustain permanent housing and access the health care, mental health treatment, substance use counseling, and other supports necessary to help them in their recovery process and with their ability to maintain housing in the community.”
U.S. Department of Housing and Urban Development Assistance Programs
Office of Housing Programs
HUD offers multiple housing programs and offices, but none is bigger than the Office of Housing, which also contains the Federal Housing Administration (FHA). Originally created in 1934, the FHA is most well-known for its mortgage insurance program that enables low-income and poor-credit borrowers to qualify for a government-backed home loan.
Between the Office of Housing and the FHA, HUD offers essential housing and community development programs like:
- Project-Based Rental Assistance
- Rental Assistance Demonstration
- The Housing for the Elderly program
- The Housing for Persons with Disabilities program
- The Manufactured Housing program
HUD also supports knowledgeable homeownership through the Office of Housing Counseling.
Discount Housing Programs
HUD offers unique discounts to certain populations through their:
- One-Dollar program: Allows low- to moderate-income families to purchase eligible HUD homes for just $1. (These homes must be foreclosed properties originally backed by FHA loans that have been on the market for at least 6 months.)
- Good Neighbor Next Door program: Provides 50% off the purchase price of homes in revitalization areas for public servants (teachers, firefighters, EMTs, and police officers). Buyers must make the home their primary residence for at least 36 months.
- HUD Homes program: Permits community and religious nonprofits to buy fixer-upper HUD homes at a discount to repair and resell to first-time and low-income buyers.
Block Grant Program
HUD’s Community Development Block Grant program allocates federal grant money to eligible communities. The proceeds help develop safe, affordable neighborhoods and facilities near employers, supermarkets, and/or public transportation.
Cities, counties, and communities must use funds in ways that:
- Prevent or eliminate slums and blight
- Primarily benefit low- to moderate-income residents
- Address urgent community problems that threaten residents’ health and welfare, such as high levels of homelessness or natural disaster recovery
Housing Choice Voucher Program
The Housing Choice Voucher program, or Section 8, helps low-income, disabled, or elderly citizens find safe housing even in unsubsidized units or properties.
Qualifying families receive vouchers funded by HUD and channeled through local Public Housing Agencies (PHAs). The PHA subsidizes the landlord directly, with the tenant paying the different between the rent amount and the subsidy value.
Properties must meet requirements set by the local PHA to be eligible. Applicants must also meet various requirements to qualify for vouchers. In particular, applicant incomes may not exceed 50% of the median income for the area.
List of HUD Program Offices
Aside from the aforementioned programs and perks, HUD runs a number of program offices dedicated to addressing specific intra- and extra-departmental needs. Each plays a crucial role in ensuring fair and equal housing access.
We’ve broken down the big ones here:
- The Government National Mortgage Association (GNMA), or Ginnie Mae, formed when it splintered away from Fannie Mae. Overseen by HUD, this government agency guarantees timely payments on qualifying mortgage-backed securities (MBS), thereby ensuring liquidity and better loan prices in the secondary mortgage market.
- The Office of Community Planning and Development builds partnerships between for- and non-profit government and private entities. The goal is to develop communities with decent, affordable housing and expanded economic opportunities.
- The Office of Economic Development encourages coordinated, cost-effective investments that create jobs, foster stronger communities, and save taxpayer dollars.
- The Office of Fair Housing and Equal Opportunity “eliminates housing discrimination, promotes economic opportunity, and achieves diverse, inclusive communities” by developing, enforcing, and investigating violations of federal fair housing policies.
- The Office of Hearings and Appeals is responsible for presiding over hearings and adjudicating appeals based on alleged violations of federal statutes.
- Healthy Homes and Lead Hazard Control develops cost-effective measures to reduce lead-based paint hazards, enforces lead-based paint regulations, and conducts technical studies to assess the impacts of hazardous exposure in the home.
- The Office of the Inspector General provides resources for the HUD Inspector General to audit, investigate, evaluate, and oversee HUD’s programs and operations. The position is currently held by Ms. Rae Oliver Davis, who was sworn in January 2019.
- The Office of Policy Development and Research gathers and maintains up-to-date information on market conditions, housing needs, existing programs, and community development issues to inform HUD policy decisions.
- The Office of Public and Indian Housing (PIH) ensures access to safe, decent, affordable housing. The office also helps create opportunities for residents to become self-sufficient and economically independent.
- Public Affairs keeps citizens informed on HUD’s mission, initiatives, and activities.
What Is the Relationship Between HUD, Fannie Mae, and Ginnie Mae?
Fannie Mae is a government-sponsored enterprise (GSE) that buoys liquidity in the mortgage market by purchasing mortgages from lenders and issuing mortgage-related securities.
By contrast, Ginnie Mae is a government agency that guarantees timely payments on MBS’s issued on government-guarantees mortgages.
Meanwhile, HUD oversees Ginnie Mae to ensure the agency conducts its affairs properly.
Does HUD Originate Loans?
HUD doesn’t offer home loans directly. Instead, HUD – often through the FHA – works with a network of lenders to help homebuyers access financing.
How to Qualify for a HUD Loan
Qualifying for a mortgage through a HUD program involves meeting most of the requirements for non-HUD loans, including:
- Minimum credit score guidelines
- Earning a minimum income
- Having an acceptable debt-to-income ratio
- Saving up for a down payment
However, many HUD-backed programs have slightly more lenient requirement that non-government-backed loans.
Bottom Line: U.S. Department of Housing and Urban Development
HUD is a crucial federal agency that helps address the country’s housing needs, improve communities, and enforce fair housing laws. Since its inception, the agency has ensured millions of families had access to the safe, affordable housing they need.