Citing budget constraints, the administration has proposed cuts of $68 and $104 million dollars in funding to The Housing for the Elderly (Section 202) and Housing for Persons with Disabilities (Section 811) grant programs:
Due to budget constraints, the Administration proposes to provide funding at a reduced level for new construction and awards for Section 202 and Section 811 projects.
The cut in funding has interesting implications for other affordable housing programs, most notably the Low Income Housing Tax Credit program. In the current debt-reduction and tax-reform focused political environment, the cuts in direct appropriations could have the side effect of strengthening the tax credit program’s political position. In comments made at the NCSHA’s recent HFA Institute, Pat Sheridan, Senior VP of Housing Development at Volunteers of America, Inc., said the following:
The recognition is that HUD is being cut back on their direct appropriation programs, like the 202 program, the 811 and the public housing programs. They are recognizing that the tax credit program is the place to go. It is another situation that but for the tax credits, senior housing, group homes, and public housing won’t be rehabilitated or even built new.