Senate Appropriations Committee Issues Report on FY 2020 DOT, HUD Appropriations Bill (Part 8 of 9)

WASHINGTON, Sept. 20 -- The Senate Appropriations Committee issued a report (S.Rpt. 116-109) on legislation (S. 2520) making appropriations for the Departments of Transportation, Housing and Urban Development, and related agencies for the fiscal ending Sept. 30, 2020. The report was advanced by Sen. Susan M. Collins, R-Maine, on Sept. 19.

HOUSING FOR THE ELDERLY

Appropriations, 2019...$678,000,000

Budget estimate, 2020...644,000,000

Committee recommendation...696,000,000

PROGRAM DESCRIPTION

This account provides funding for housing for the elderly pursuant to section 202 of the Housing Act of 1959. Under this program, the Department provides capital grants to eligible entities for the acquisition, rehabilitation, or construction of housing for seniors, as well as project-based rental assistance contracts [PRACs] to support the operational costs of such units. Tenants living in section 202 supportive housing units can access a variety of community-based services in order to continue living independently in their communities and effectively age in place.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $696,000,000 for the Section 202 program. This amount is $18,000,000 more than the amount provided in fiscal year 2019 and $52,000,000 more than the budget request. The Committee's recommendation includes $579,000,000 for the costs associated with fully funding all annual PRAC renewals and amendments; $107,000,000 for service coordinators and the continuation of existing congregate service grants, including $4,000,000 for new service coordinator grants; and $10,000,000 for Aging-in-Place Home Modification grants. The Committee recommendation does not include authority or funding for the renewal of any rental assistance contracts which contain a term of longer than 12 months.

Aging-in-Place Home Modification Grants.--The Committee recommendation includes funding for additional Aging-in-Place Home Modification grants in order to enable low-income seniors to remain in their homes through low-cost, high-impact home modifications. The intended beneficiaries of these grants has always been low-income senior homeowners. It is disappointing that the Department has been slow to follow the Committee's direction to implement the program accordingly. In response, the Committee has included language clarifying its intent for the use of these funds as well as those appropriated in fiscal year 2019. In designing the Notice of Funding Availability for this program, HUD is directed to take into account successful models of low-barrier, participant-led, holistic approaches to aging in place, including Johns Hopkins University's Community Aging in Place--Advancing Better Living for Elders program and the Community Aging in Place program of the Maine State Housing Authority. The Committee further directs HUD to track the outcomes of seniors whose homes have been modified in order to better understand the effectiveness of this funding in reducing at-home falls, hospitalizations, and emergency response calls, as well as improving independence and tenure in home over time.

Service Coordinators.--Service coordinators are responsible for connecting senior residents to supportive services offered by community agencies in order to further those seniors' independence and to assist them with aging in place. The Service Coordinator grant program pays the salaries and fringe benefits of service coordinators, as well as related program administrative costs. Annual extensions of these grants are provided only when there is no other funding source available at elderly housing developments. As the physical repair needs of aging elderly housing developments have begun to increase, however, the percentage of grantees that can offset service coordination costs from other funding sources has declined. Retention rates for service coordinators have also declined as educational requirements for the position have increased but salaries have not. This turnover not only disrupts the ability of the Department to provide grants that are utilized each year, but also breaks needed continuity in low-income elderly households' access to supportive services. The Committee encourages the Department to continue its ongoing work to improve retention rates through increasing salaries for service coordinators, where justified. To assist with these efforts, the Committee provides $103,000,000 for the renewal of service coordinator grants. This additional funding should be used to minimize dependence on annual offsets to maintain the program. The Committee also provides an additional $4,000,000 for new service coordinator grants so that low-income elderly residents of additional properties can benefit from the assistance of service coordinators.

The Committee is also concerned that the Department remains unable to identify or locate service coordinators who serve assisted elderly housing developments, but are compensated through the operational budgets of the property rather than a Service Coordinator grant. This deficiency was identified in a report by the Government Accountability Office, in which it was estimated that roughly half of Section 202 properties had a service coordinator, but found the Department's data to be less than reliable for budget-based service coordinators. The Department has stated that it is working with relevant properties to be able to identify and locate budget-based service coordinators with confidence as soon as possible through the Standards for Success reporting program. The Committee directs the Department to complete these efforts within 30 days of enactment of this act and to report annually on the percentage of eligible elderly housing developments with service coordinators. This information should include the percentage that receive support from Service Coordinator grants and those compensated through operating budgets.

Capital Advances.--In fiscal years 2018 and 2019, the Committee provided a total of $156,000,000 for the construction of new units to assist low-income elderly households. The Department released a Notice of Funding Availability in April 2019 containing $50,000,000 of these funds. The Committee directs the Department to make the remaining $106,000,000 provided in fiscal years 2018 and 2019 available within 60 days of enactment of this act and to award all remaining funding from those fiscal years with 180 days of enactment of this act.

Supportive Housing Demonstration.--In fiscal year 2014, the Department was provided $22,500,000 to develop a demonstration to produce evidence of the effectiveness of an enhanced supportive services model for elderly households and to determine the value of enhanced service coordination paired with affordable housing for seniors. In January 2017, three- year demonstration grants were awarded to 80 senior housing developments to provide a full-time service coordinator and a part-time preventative health nurse on-site. However, the Department has thereafter failed to provide the required reporting on the progress of this demonstration program. This information is needed to better understand the impact that service coordinators have on seniors' ability to age in place and on preventing unnecessary heath care utilization. The Committee directs the Department to resume providing regular reporting on the progress and status of this demonstration to the House and Senate Committees on Appropriations within 30 days of enactment of this act.

Project Rental Assistance [PRA].--The PRA demonstration being conducted under the Section 811 program has shown tremendous promise as a significantly more cost-effective model for the creation of new assisted supportive housing units. While that program has demonstrated initial success with housing for persons with disabilities, it is unclear whether the program would be as successful serving other vulnerable populations, such as the elderly. The Committee directs the Department, upon completion of the Phase II Evaluation of the PRA demonstration, to examine this program and determine whether this demonstration could effectively create new units for low-income seniors under the Section 202 program. The Committee directs the Department to report on the results of that review within 180 days of the completion of the Section 811 PRA Phase II Evaluation. This report should examine: the potential impacts on seniors, including any changes to their quality of life, health, or housing; economic aspects, including any projected changes to the cost of creating a new assisted supportive housing unit for the elderly; and any potential challenges to implementation.

HOUSING FOR PERSONS WITH DISABILITIES

Appropriations, 2019...$184,155,000

Budget estimate, 2020...157,000,000

Committee recommendation...184,155,000

PROGRAM DESCRIPTION

This account provides funding for housing for persons with disabilities pursuant to section 811 of the Cranston-Gonzalez National Affordable Housing Act of 1990. Traditionally, the Section 811 program provided capital grants to eligible entities for the acquisition, rehabilitation, or construction of housing for persons with disabilities, as well as project- based rental assistance contracts [PRACs] to support the operational costs of such units. Since fiscal year 2012, HUD has transitioned to providing project rental assistance to State housing finance agencies or other appropriate entities, which act in partnership with State health and human services agencies to provide supportive services, as authorized by the Frank Melville Supportive Housing Investment Act of 2010 (Public Law 111-374).

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $184,155,000 for the Section 811 program. This amount is $27,155,000 more than the budget request and equal to the fiscal year 2019 enacted level. This level of funding, in addition to residual receipts, recaptures, and other unobligated balances, will support all PRAC renewals and amendments while also providing up to $22,155,000 for the creation of new affordable housing for persons with disabilities.

Project Rental Assistance [PRA].--The PRA demonstration seeks to create new assisted supportive housing units for extremely low-income people with disabilities without providing funding for the construction of new units. A total of $238,000,000 was awarded to 28 States in order to conduct this demonstration over a five-year period. Preliminary evaluations of this program have shown significant cost-savings in the creation of new units for people with disabilities. The Office of Policy Development and Research is evaluating this program in two phases and was expected to release the final Phase II Evaluation in early 2019. However, the Department has not yet produced that report. The second evaluation has three components: (1) an analysis of the implementation of the PRA demonstration; (2) an assessment of the effects of the PRA demonstration on participants' quality of life, housing, and health; and (3) an economic analysis to measure the costs of housing and supportive services provided and to compare those costs to benefits resulting from the demonstration. It is essential that the Committee receive the Phase II Evaluation as soon as possible in order to better understand the potential significant savings stemming from this demonstration. Therefore, the Committee directs the Department to produce and release this report within 30 days of enactment of this act.

Capital Advances.--In fiscal years 2018 and 2019, the Committee provided a total of $112,755,000 for the creation of new units to assist low-income individuals and families with disabilities. However, the Department has not yet announced the availability of any of those funds. There is significant demand for the creation of new units under the Section 811 program. In 2015, 1.39 million very low-income households with worst case housing needs included at least one non-elderly person with a disability. This number increased by 28 percent between 2013 and 2015. The Committee directs the Department to make all of the funding provided in fiscal years 2018 and 2019 available within 60 days of enactment of this act and to award that funding with 180 days of enactment of this act.

HOUSING COUNSELING ASSISTANCE

Appropriations, 2019...$50,000,000

Budget estimate, 2020...45,000,000

Committee recommendation...45,000,000

PROGRAM DESCRIPTION

The Housing Counseling Assistance program provides comprehensive housing counseling services to eligible homeowners and tenants through grants to non-profit intermediaries, State government entities, and other local and national agencies. Eligible counseling activities include: pre- and post-purchase education, personal financial management, reverse mortgage product education, foreclosure prevention and mitigation, and rental counseling.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $45,000,000 for the Housing Counseling Assistance program, of which not less than $3,000,000 shall be for the training of housing counselors in order to ensure that all individuals who currently provide housing counseling services required under or in connection with a HUD program are certified pursuant to the requirements of 12 U.S.C. 1701x. This appropriation is equal to the budget request and $5,000,000 less than the fiscal year 2019 enacted level. This funding will help to provide individuals and families across the country with sound advice to make more informed housing decisions, improve their financial situation, and meet their homeownership goals over time. Specifically, it will support competitive counseling grants and training activities. The network of HUD-approved housing counseling organizations provides a wide variety of counseling services, including assistance with preventing foreclosure and homelessness. In addition, the administrative contract support funding includes resources for financial audits and technical assistance. The Committee continues language requiring HUD to obligate counseling grants within 180 days of enactment of this act, as well as permitting HUD to publish multi-year NOFAs, contingent on annual appropriations. This should result in administrative savings for both HUD and its grantees.

Eviction Counseling.--The Committee remains concerned about the short- and long-term effects of evictions on families and individuals. The Committee directs HUD to continue to work with housing counseling organizations to improve the assistance offered to renters at risk of eviction. The Committee is disappointed that HUD has not yet provided the report detailing their efforts to improve these processes and augment the services offered by housing counselors. The Committee directs HUD to produce this report within 30 days of enactment of this act.

Program Administration.--In September 2018, the HUD Office of Inspector General [IG] released an audit which found that the Office of Housing Counseling's agency approval and performance review processes were not being adequately performed. The IG recommended that HUD: (1) determine whether housing counseling agencies, which were reapproved without performance reviews, were properly qualified to provide services; (2) develop and implement updated standard operating procedures for performance reviews and agency approvals; and (3) ensure that the new management system being developed permits adequate programmatic oversight. The Committee is concerned that housing counseling agencies could have been permitted to provide services to families and individuals without sufficient qualifications and directs HUD to report on its progress to comply with the recommendations of the IG audit and its potential implementation of a risk-based management system within 90 days of the enactment of this act.

Rental Housing Assistance

Appropriations, 2019...$5,000,000

Budget estimate, 2020...3,000,000

Committee recommendation...3,000,000

PROGRAM DESCRIPTION

This account provides amendment funding for housing assisted under the Rental Housing Assistance Payments (Section 236) program.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $3,000,000 for HUD-assisted, State-aided, noninsured rental housing projects, consistent with the budget request and $2,000,000 less than the fiscal year 2019 enacted level. The Committee recommendation includes a provision which allows for the conversion of these projects through the Rental Assistance Demonstration to long- term Section 8 contracts at no additional cost. The Committee notes that all of the Rent Supplement program properties have been converted, ending that program, and that the conversion of the remaining projects within the Section 236 program will lead to the elimination of that program as well by the end of fiscal year 2020.

PAYMENT TO MANUFACTURED HOUSING FEES TRUST FUND

Appropriations, 2019...$12,000,000

Budget estimate, 2020...12,000,000

Committee recommendation...13,000,000

PROGRAM DESCRIPTION

The National Manufactured Housing Construction and Safety Standards Act of 1974, as amended by the Manufactured Housing Improvement Act of 2000, authorizes the Secretary to establish Federal standards for the construction, design, safety, and performance of manufactured homes. All manufactured homes are required to meet these Federal standards, and fees are charged to producers to cover the costs of administering the Act.

COMMITTEE RECOMMENDATION

The Committee recommends $13,000,000 to support the manufactured housing standards programs, of which $13,000,000 is expected to be derived from fees collected and deposited into the Manufactured Housing Fees Trust Fund account [Trust Fund]. No direct appropriation is provided. The total amount recommended is $1,000,000 more than the budget request and the fiscal year 2019 enacted level. The Committee recommendation directs that not more than $5,740,000 shall be for monitoring of manufacturers' compliance with construction and safety standards by third-party inspection agencies.

Originally, HUD's partnership payments to States were based on new homes produced in States and new homes shipped into States. The Manufactured Housing Improvement Act of 2000 changed this formula by requiring HUD to pay States at rates not less than the amount paid in 2000. While beneficial to some States, this has created inequitable payments over time when compared to potential current payments based on anticipated workload from actual production and shipments. As the manufactured housing industry continues to recover from the economic crisis, HUD has recognized that additional payments need to be made to States and has published a proposed rule (81 FR 91083) in order to provide for a more equitable guarantee of minimum funding and to base such payments upon participation in the production or siting of new manufactured homes. The Committee directs HUD to publish a final rule on this matter within 180 days of enactment of this Act and provides additional appropriations to make those increased payments based on anticipated workload from actual production and shipments.

The Committee continues to permit the Department to collect fees from program participants in the dispute resolution and installment programs, as mandated by the Manufactured Housing Improvement Act of 2000. These fees are to be deposited into the Trust Fund and may be used to support the manufactured housing standards programs, subject to the overall funding limitation placed on this account.

Congressional Justification.--The Committee again notes with disappointment the lack of detail and program cost- estimates in the Office of Manufactured Housing Programs' [OMHP] fiscal year 2020 written budget justification. The Committee directs OMHP to provide detailed Congressional justifications of its annual budget requests, including anticipated payments for each of the following: State Administrative Agencies, Monitoring Manufacturer's Compliance with Construction and Safety Standards, Oversight of Model Installation Standards, Administration of the Dispute Resolution Program, Coordination of Activities of the Manufactured Housing Consensus Committee, and Meetings with Partners in the Federal Manufactured Housing Program.

Federal Housing Administration

MUTUAL MORTGAGE INSURANCE PROGRAM ACCOUNT

View table at https://www.congress.gov/congressional-report/116th-congress/senate-report/109/1?s=2&r=3

GENERAL AND SPECIAL RISK PROGRAM ACCOUNT

View table at https://www.congress.gov/congressional-report/116th-congress/senate-report/109/1?s=2&r=3

PROGRAM DESCRIPTION

The Federal Housing Administration [FHA] fund covers the mortgage and loan insurance activity of HUD mortgage/loan insurance programs. These include the mutual mortgage insurance [MMI] fund, cooperative management housing insurance [CMHI] fund, general insurance [GI] fund, and the special risk insurance [SRI] fund. For presentation and accounting control purposes, these are divided into two sets of accounts based on shared characteristics. The unsubsidized insurance programs of the mutual mortgage insurance fund and the cooperative management housing insurance fund constitute one set; and the general risk insurance and special risk insurance funds make up the other.

COMMITTEE RECOMMENDATION

The Committee has included the following amounts for the Mutual Mortgage Insurance Program account: a limitation on guaranteed loans of $400,000,000,000, a limitation on direct loans of $1,000,000, and $130,000,000 for administrative contract expenses. For the GI/SRI account, the Committee recommends $30,000,000,000 as a limitation on guaranteed loans and a limitation on direct loans of $1,000,000. The Committee does not include the authority for HUD to charge a fee to provide additional funds for FHA's administrative costs as proposed in the budget request. However, the Committee supports the goal of improving FHA's system automation, risk management, and quality control efforts and has included funding in the Information Technology Fund account for these purposes.

Home Equity Conversion Mortgages [HECM].--The Committee urges the Department to take appropriate actions to ensure transparency and improve the resolution of defaulted and foreclosed FHA Home Equity Conversion Mortgage loans which have been assigned to HUD in order to improve program performance and loss mitigation results for borrowers. The Committee is concerned that HUD has not taken the necessary steps to build on its existing loss mitigation authorities through programs such as the cash for keys, in order to mitigate the risk of HECM loans held before January 1, 2016. Further, HUD lacks the necessary data sharing and public reporting on the HECM portfolio, including loan performance and sales. To ensure transparency, the Committee directs FHA to make public data tables used to compile the annual actuarial review, complete with a data element dictionary. All personal identifying information shall be removed from this data to ensure appropriate privacy. The Committee also directs HUD to reinstate online publishing of the HECM Single-Family Data Report. The Committee encourages HUD to include FHA loan-level origination and performance data, including servicing and termination information as part of this report. HUD shall brief the House and Senate Committees on Appropriations on its proposed actions and timelines for implementation within 90 days of enactment of this act.

Reporting on Distressed Assets.--In order to provide public transparency on the management of taxpayer assets through the sale of Secretary-held residential loans, HUD regularly published a "Report to the Commissioner on Post-Sale Reporting Distressed Asset Stabilization Program [DASP]" between 2012 and 2016. These reports included data on outcomes and resolutions of distressed loans sold under DASP, including the structure of loan modifications and demographic and geographic information about the borrowers. In an effort to further the Department's mission of sustainable homeownership, as well as its responsibilities to taxpayers, the Committee directs the Secretary to publish online, within 60 days of enactment of this act, a similar report or reports showing the post-sale status of all loans sold through HUD's Single Family Asset Sales program, including both forward loans and HECM loans since January 2017, and to publish online similar reports on a semi-annual basis thereafter.

Data Collection to Improve Transparency.--The Committee recognizes that properly structured downpayment assistance programs can provide a valuable resource to qualified borrowers who face the barrier of initial cash investment. Further, the Committee recognizes that more granular data on downpayment assistance providers would help HUD provide better oversight of the program and improve overall program performance. While HUD currently requires mortgagees to obtain tax identification numbers for non-profit downpayment assistance providers, it does not require the same information be collected if the provider is a government entity. The Committee believes that the uniform collection of tax identification numbers for both non-profit and governmental entities has the potential to improve FHA's oversight of downpayment assistance programs. Therefore, the Committee encourages HUD to require that mortgagees obtain and provide to HUD the tax identification number of a governmental entity when a governmental entity provides downpayment assistance in the form of a gift or a second mortgage.

HUD-Federal Financing Bank Risk Sharing.--In fiscal year 2014, HUD and the Federal Financing Bank [FFB] launched a risk sharing initiative in order to provide financing for multifamily mortgage loans insured by FHA under its Risk Sharing programs on an interim basis until September 30, 2021. Through this initiative, FFB provides Housing Finance Agencies [HFAs] with upfront financing for affordable multifamily housing developments, which FHA insures through the Multifamily Risk-Sharing Program under section 542 of the Housing and Community Development Act of 1992 (12 U.S.C. 1707). In 3 years, the HUD-FFB risk sharing initiative preserved or produced nearly 25,000 affordable housing units, which included investments in rural and non-metropolitan areas. Though not widely adopted by state HFAs, the initiative also resulted in increased offsetting collections to FHA, reduced administrative costs to the Department and increased public-private partnerships. As HUD continues working with HFAs that have existing HUD-FFB risk sharing agreements in place and submitted loan applications to HUD for financing of additional properties prior to December 31, 2018, the Committee encourages the Department to expedite its review and to keep its stakeholders engaged throughout the process. The Committee recognizes the important role the initiative has played in affordable multifamily housing development and that other financing options remain available to HFAs. The Committee encourages HUD to work with HFAs under the section 542 authority and continue to encourage innovate financing solutions in order to spur affordable multifamily housing production.

Government National Mortgage Association

GUARANTEES OF MORTGAGE-BACKED SECURITIES LOAN GUARANTEE PROGRAM ACCOUNT

View table at https://www.congress.gov/congressional-report/116th-congress/senate-report/109/1?s=2&r=3

PROGRAM DESCRIPTION

The Government National Mortgage Association [Ginnie Mae], through the mortgage-backed securities program, guarantees privately issued securities backed by pools of Government- guaranteed mortgages. Ginnie Mae is a wholly owned corporate instrumentality of the United States within the Department. Its powers are prescribed generally by title III of the National Housing Act, as amended. Ginnie Mae is authorized by section 306(g) of the act to guarantee the timely payment of principal and interest on securities that are based on and backed by a trust, or pool, composed of mortgages that are guaranteed and insured by the FHA, the Rural Housing Service, or the Department of Veterans Affairs. Ginnie Mae's guarantee of mortgage-backed securities is backed by the full faith and credit of the United States. This account also funds all salaries and benefits funding to support Ginnie Mae.

COMMITTEE RECOMMENDATION

The Committee recommends a limitation on new commitments on mortgage-backed securities of $550,000,000,000. This level is the same as the budget request and fiscal year 2019 enacted level. The bill allows Ginnie Mae to use $29,626,000 for salaries and expenses. This is $2,626,000 more than the fiscal year 2019 enacted level and $1,226,000 more than the budget request.

Hiring and Retention.--The Consolidated Appropriations Act of 2017 directed HUD to report on the effects retention plays in carrying out its oversight role and to provide possible solutions to improve staff retention. In February, HUD provided Congress with this report, which recommended an alternative pay scale authority for boosting retention for mission critical positions, but did not include any other recommendations for improving hiring and retention or identify statutory or regulatory barriers to an alternative pay scale. Subsequently, GAO released a report on Ginnie Mae's Risk Management and Staffing-Related Challenges (GAO-19-191) which found that Ginnie Mae overwhelmingly relies on contractors to fulfill its mission critical functions and that the Department has not done a comprehensive workforce analysis to identify how much of Ginnie Mae's contract workforce can be shifted in-house or identified the costs and benefits of doing such a restructure. The Committee is concerned that Ginnie Mae has not identified how the current workforce, both contractors and government employees, meets mission critical functions in oversight, risk management, and compliance and believes this must be completed before Ginnie Mae can develop a plan to fill gaps in hiring and retention. In order to understand the staffing and retention challenges at Ginnie Mae, the Committee directs the Department to conduct an analysis and submit a report to the House and Senate Committees on Appropriations within 120 days of enactment of this act on how the current workforce, contractors, and government employees, meets mission critical functions. Additional information required in the report include an identification of the specific roles that contractors play in Ginnie Mae's core functions, the costs incurred in hiring and supervising such contractors, whether there are statutory or regulatory barriers to shifting these functions to government employees, and the impact on costs and long-term program continuity if these functions are shifted from contractors to government employees.

The Committee recognizes that pay compensation at comparable Federal financial or regulatory institutions exceeds that of Ginnie Mae, but is concerned that the Department has not fully exercised its current authority to reduce barriers to pay compensation or increase retention. In its May report, GAO noted that HUD has existing authority available to them to improve hiring and retention within Ginnie Mae. The Committee is aware of existing administrative flexibility that Ginnie Mae could pursue, including Critical Position Pay Authority, in order to address gaps in its workforce or improve retention strategies and understands that the Department is working with the Office of Personnel Management and the Office of Management and Budget to explore effective ways to use this alternative pay scale model to improve hiring and retention. The Committee encourages the Department to continue its work in this area and to report to the House and Senate Committees on Appropriations within 60 days of enactment of this act on its progress.

Policy Development And Research

RESEARCH AND TECHNOLOGY

Appropriations, 2019...$96,000,000

Budget estimate, 2020...87,000,000

Committee recommendation...96,000,000

PROGRAM DESCRIPTION

Title V of the Housing and Urban Development Act of 1970, as amended, directs the Secretary of the Department of Housing and Urban Development to undertake programs of research, evaluation, and reports relating to the Department's mission and programs. These functions are carried out internally and through grants and contracts with industry, nonprofit research organizations, educational institutions, and through agreements with State and local governments and other Federal agencies. The research programs seek ways to improve the efficiency, effectiveness, and equity of HUD programs and to identify methods to achieve cost reductions. Additionally, this appropriation is used to support HUD evaluation and monitoring activities and to conduct housing surveys.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $96,000,000 for research, technology, and community development activities in fiscal year 2020. This level is equal to the fiscal year 2019 enacted level and $9,000,000 more than the budget request. The Committee recommends $50,000,000 for Core Research and Technology, including: market surveys; research support and dissemination; data acquisition; housing finance studies; research partnerships; and housing technology. In addition, the Committee includes $46,000,000 for Department-wide technical assistance and critical research beyond the core studies. Of this amount, at least $29,750,000 is for technical assistance across HUD programs of which $2,250,000 shall be for targeted technical assistance to public housing agencies under the direction of a federal monitor. The Committee recommendation will continue to support market surveys, such as the American Housing Survey, that are integral to HUD's ability to understand its own programs, and also help enhance public and private entities' knowledge of housing conditions in the United States.

Of the amount provided for critical research beyond the core studies, the recommendation includes up to $750,000 for use by the Office of Innovation for innovation awards, up to $3,500,000 for cooperative agreement and research partnerships with historically black colleges and universities, and $3,000,000 for an assessment of public housing capital needs.

The recommendation includes continued funding for evaluations of the Moving-to-Work program and expansion; and on-going evaluation and follow-up work related to the Family Options Study, and long-term tracking of the Family Self- Sufficiency program.

The recommendation also includes funding for the following new research and evaluations: an evaluation of the aging-in- place home modification program for low-income senior homeowners, and an assessment of housing search assistance for people with disabilities.

HUD shall include details on its allocation of these resources in its operating plan.

Fair Market Rents [FMRs].--The Committee encourages HUD to identify and implement alternatives to locally funded rent surveys for areas affected by changing economic conditions and natural disasters. In fiscal year 2018, the Committee directed HUD to submit a report describing proposals to update the FMR formula to more accurately reflect the current housing market. In this report, submitted to Congress in September 2018, HUD identified potential causes of inaccuracies in the FMR calculation, including the trend and inflation factors, and the data used for recent mover base rents. However, in this report HUD did not identify a methodology for forecasting local rental market trends for areas of the country that have significantly higher or lower rental growth compared to the national average, which is used in the determination of annual FMRs, resulting in some markets yielding a rent change factor that is 1.9 percent higher or 3.2 percent less than the consumer price index gross rent for the same market for the year. In its forecasting of an inflation factor at the national and regional level, HUD does not have a reliable method for projecting actual inflation for smaller or nonmetropolitan areas of the country that are not captured in annual residential sampling conducted by the Bureau of Labor Statistics. HUD's FMR calculation is also limited by the frequency of data collected on changes in gross rents through the American Community Survey [ACS]. For larger, metropolitan communities, the ACS collects data annually but for communities with populations of less than 65,000, data is collected every 5 years. In using the most recent validated data to determine changes in local gross rents, HUD is limited in using the last year of ACS data collection for that market, which could result in data from 3 years prior. For rapidly changing rental markets, this lag in data availability poses significant challenges for housing providers who are trying to provide HUD-assisted households with rental subsidies that are comparable to local fair market rents. While the Committee recognizes that the results of the analysis will not yield actions that will inform the fiscal year 2020 FMR calculations, it looks forward to the Department engaging the public on proposed adjustments to improve the FMR calculation. The Committee directs HUD to finalize its strategy and review of the notice of proposed rulemaking comments within 120 days of enactment of this act.

The Committee is concerned that the overall challenges in the FMR calculation could have disproportionate impacts on leasing among special populations, including homeless veterans participating in the HUD-VASH program, and directs Policy Development and Research to work with the Office of Public and Indian Housing to submit a report to the House and Senate Committees on Appropriations on HUD-VASH leasing success rates trends in areas that have requested an exception payment standard, submitted a local rent survey, or received approval to administer payments above 110 percent of the FMR. The Committee continues to encourage the Department, to the extent practicable, to work with communities to use local rent survey data made available in the preceding year to inform the calculation of FMRs. The Committee continues to strongly encourage HUD to expedite the process for consideration of FMRs and exception payment standards that are requested by PHAs.

Cold Climate Housing.--The Committee encourages HUD to enter into cooperative agreements with philanthropic entities, other Federal agencies, State or local governments and their agencies, Indian tribes, tribally designated housing entities, or colleges or universities for research into sustainable housing design, development and construction for cold climates.

Fair Housing and Equal Opportunity

FAIR HOUSING ACTIVITIES

Appropriations, 2019...$65,300,000

Budget estimate, 2020...62,300,000

Committee recommendation...65,300,000

PROGRAM DESCRIPTION

The fair housing activities appropriation includes funding for both the Fair Housing Assistance Program [FHAP] and the Fair Housing Initiatives Program [FHIP], among others.

FHAP assists State and local fair housing agencies with implementing title VIII of the Civil Rights Act of 1968, as amended, which prohibits discrimination in the sale, rental, and financing of housing and in the provision of brokerage services. The major objective of the program is to ensure prompt and effective processing of title VIII complaints, with appropriate remedies for complaints being provided by State and local fair housing agencies.

FHIP is authorized by section 561 of the Housing and Community Development Act of 1987, as amended, and by section 905 of the Housing and Community Development Act of 1992. This program provides support to public and private organizations for the purpose of eliminating or preventing discrimination in housing, and enhances fair housing opportunities.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $65,300,000 for the Office of Fair Housing and Equal Opportunity. This amount is $3,000,000 more than the budget request and equal to the fiscal year 2019 enacted level. Of the amounts provided, $23,500,000 is for FHAP, $39,900,000 is for FHIP, including not less than $7,850,000 for education and outreach programs and not less than $600,000 for Fair Housing Organization Initiatives, and $300,000 is for the creation, promotion, and dissemination of translated materials that support the assistance of persons with limited English proficiency. The Committee also provides $1,600,000 for the National Fair Housing Training Academy and encourages the Department to pursue ways to make the Academy self-sustaining.

Test Coordinator Training.--Testing remains one of the most effective investigative tools and is essential to the successful enforcement of fair housing laws. Those who coordinate testing investigations need specialized training from skilled, experienced professionals in this field. The Committee directs the Department to continue to operate a comprehensive program which provides ongoing training, technical assistance, and resources to test coordinators working in fair housing organizations throughout the country. The Committee also directs the Department not to merge existing test coordinator training with other fair housing activities, including the National Fair Housing Training Academy.

Delays in Grant Awards.--In recent years, the Department has been slow in awarding funds under the FHIP program. The Committee is concerned that these continued delays in the awarding of FHIP grants could undermine fair housing organizations' abilities to effectively address discrimination in their communities. The Committee directs that funding provided for FHIP in fiscal year 2019 be awarded within 90 days of enactment of this act and that funding provided in fiscal year 2020 be awarded within 1 year of enactment of this act.

Office of Lead Hazard Control and Healthy Homes

LEAD HAZARD REDUCTION

Appropriations, 2019...$279,000,000

Budget estimate, 2020...290,000,000

Committee recommendation...290,000,000

PROGRAM DESCRIPTION

Title X of the Housing and Community Development Act of 1992 (Public Law 102-550) established the Residential Lead- Based Paint Hazard Reduction Act, under which HUD is authorized to make grants to States, localities, and Native American Tribes in order to conduct lead-based paint hazard remediation and abatement activities in private, low-income housing. Lead is a significant environmental health hazard, particularly for young children and pregnant women, and exposure can result in neurological damage, learning disabilities, and impaired growth. The Healthy Homes Initiative, which was authorized under sections 501 and 502 of the Housing and Urban Development Act of 1970 (Public Law 91-609), provides grants to remediate hazards in housing that have been scientifically shown to negatively impact occupant health and safety.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $290,000,000 for lead-based paint hazard reduction and abatement activities, of which $45,000,000 is for the Healthy Homes Initiative and $64,000,000 is for the High Impact Neighborhoods demonstration program. This appropriation is equal to the President's budget request and $11,000,000 more than the fiscal year 2019 enacted level. This overall funding level will support lead-based paint hazard reductions in more than 17,900 units, providing safer homes for over 66,600 low and very-low income families and individuals, including nearly 16,600 children under the age of 6 years old.

The Committee remains committed to protecting children in communities with the highest rates of childhood lead poisoning and the oldest housing stock. Lead-based paint hazards are far more prevalent in older homes and in low-income housing in particular, where maintenance is less robust and paint surfaces are more likely to deteriorate. In order to target funding to those communities, the Committee directs HUD to award no less than $100,000,000 of grants to those jurisdictions with the highest lead-based paint abatement needs. The Committee notes that this set-aside is a minimum floor and encourages HUD to exceed this threshold.

High Impact Neighborhood Demonstrations.--According to the Centers for Disease Control and Prevention, children in at least 4 million U.S. households are exposed to high levels of lead. Exposure to lead hazards at a young age can not only severely inhibit healthy development and compromise learning, but may also permanently jeopardize potential for upward social mobility throughout adulthood. Children who are exposed to lead hazards are seven times more likely to drop out of school and six times more likely to end up in the juvenile justice system.

In an effort to demonstrate the effectiveness of intensive multi-year investments in lead-based paint remediation activities in low-income communities, the Committee provides $64,000,000 for five-year grants in up to 10 communities, with each grantee receiving not less than $6,000,000 and not more than $9,000,000. This funding will support projects to dramatically reduce the presence of lead-based paint hazards in neighborhoods with high reported incidences of elevated blood lead levels in children under the age of 6 years old, as well as high rates of housing stock built before 1940 and low-income families with young children.

The Committee directs the Department to provide training and ongoing technical assistance to grantees throughout the duration of the multi-year grant period in order to assist those communities with fully utilizing the funding awarded as part of this demonstration program. The Committee also directs the Department to evaluate the effectiveness of these intensive multi-year investments in reducing the presence of lead-based paint hazards and the per-unit cost of lead-based paint remediation activities. The Department shall provide a report to the House and Senate Committees on Appropriations discussing its methodology for making these evaluations and the results of those evaluations when each is completed.

The Committee applauds the Department for issuing the Notice of Funding Availability [NOFA] for the High Impact Neighborhoods grant expeditiously in order to help communities target resources to the areas of greatest need in a timely manner. However, the Committee is concerned that the NOFA's eligibility criteria lacked clarity and consistency with the statutory authority. Specifically, the Committee is concerned that the NOFA was unclear on what entities were eligible to apply for the funding, including entities that are a part of the same state government or general local government, and directs the Department to ensure all future NOFAs explicitly describe all eligible grantees and are consistent with the statute. The Committee notes the goal for the High Impact Neighborhoods grant is to provide resources for innovative capacity building in the intensive reduction of lead hazards, and directs HUD to adjust the weighting criteria to ensure proper consideration is given to applicants that demonstrate such capacity building. The Committee is also aware of jurisdictions with limited staffing, nonetheless in need of intensive lead intervention. To ensure these jurisdictions are not adversely impacted and that resources are directed to communities with the highest need, the Committee further directs HUD to allow program managers to have a 1 year overlap in the period of performance for the oversight of grants funded under this heading.

Grantee Coordination.--Funds received under the Lead-Based Paint Hazard Control grant program may be utilized by grantees to evaluate and address lead-based paint hazards in Section 8 voucher units. The Office of Lead Hazard Control and Healthy Homes [OLHCHH] currently gives preference to grantees that work with public housing agencies to address lead-based paint hazards in those units. The Committee commends HUD for emphasizing this need when awarding these grants and urges HUD to continue to address this need in HUD-assisted housing stock in the private market.

Weatherization Assistance Program.--Funding from HUD's Lead-Based Paint Hazard Control grant program is often used to replace windows in homes that generate lead dust that is harmful to children. These homes are also often eligible for assistance under the Department of Energy's [DOE's] Weatherization Assistance Program [WAP], which will replace those same windows with more energy-efficient ones. However, even with the establishment of DOE's Lead-Safe Weatherization program, many WAP contractors are hesitant to work in units where lead-based paint hazards may be present because of the additional time and cost involved with each project. There is a tremendous opportunity for these programs to complement one another in a manner that saves grantees money and allows for more work to be completed.

The Committee supports OLHCHH's continued participation in the interagency working group on healthy homes and energy. OLHCHH is encouraged to continue to coordinate with DOE and to assist WAP grantees and sub-grantees in partnering with its own grantees to perform window removal and installation work in older low-income housing. HUD is directed to collect information on how many units benefit from this coordination and how much this coordination has reduced costs for hardware and labor. HUD is directed to provide this information to the Senate and House Committees on Appropriations no later than 6 months after the end of each grant cycle on an annual basis.

Eliminating Fall Hazards for the Elderly.--Approximately one-third of adults ages 65 years and older fall each year, and the majority of these falls occur in the home. By 2020, expenditures related to injuries sustained as a result of falls by seniors are projected to cost nearly $60,000,000,000. According to the Centers for Disease Control and Prevention, medical costs related to these injuries already rank as one of the top twenty most expensive medical costs. The Committee encourages the Department to continue its efforts through the Healthy Homes Initiative to educate residents about the elimination of fall hazards in their homes. Building upon the investments made by this Committee for aging-in-place home modifications, the Committee directs OLHCHH to emphasize fall prevention and management strategies. The Committee encourages interagency coordination, where appropriate, to improve the effectiveness of these initiatives.

Progress on Fiscal Year 2019 Directives.--The Committee is encouraged with the Department's progress on its fiscal year 2019 directives, including: operationalizing a tool that will provide data to permit the Department to better target grant awards to communities most at risk for lead-based paint hazards; issuing clarifying guidance to address noncompliance of grantees with lead-based paint regulations and to determine when enforcement actions should be pursued against grantees; and submitting annual reports mandated by 42 U.S.C. 4856. The Committee directs the Department to complete these directives within 120 days of enactment of this act.

Overdue Report.--The Committee directs the Department to complete the report required by section 312 of Public Law 115- 474 within 30 days of enactment of this act. This report should include best practices for improving existing standards and policies with regard to addressing lead-based paint hazards, as well as recommendations for legislation to improve lead-based paint hazard prevention and abatement.

Information Technology Fund

Appropriations, 2019...$280,000,000

Budget estimate, 2020...280,000,000

Committee recommendation...280,000,000

PROGRAM DESCRIPTION

The Information Technology Fund finances the information technology [IT] systems that support departmental programs and operations, including FHA Mortgage Insurance, housing assistance and grant programs, as well as core financial and general operations.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $280,000,000 for the Information Technology Fund for fiscal year 2020, which is equal to the budget request and the fiscal year 2019 enacted level.

Federal Housing Administration [FHA] Information Technology Modernization.--FHA's primary underwriting system is over 40 years old, while its monitoring system, property accounting, and vendor management systems are over 25 years old. These antiquated systems not only make it difficult and expensive for lenders to work with FHA, but more importantly, they undermine the fiscal solvency of the Mutual Mortgage Insurance Fund and create significant risk to the taxpayers. The Committee recommendation includes $20,000,000 to continue the modernization of FHA's IT systems. The Committee directs these funds to be used for improving single-family insured mortgage processing underwriting and delivery, modernizing the single- family asset management and claims systems, and addressing lender activities and program compliance. These funds may also be used for more immediate IT needs including improvements to: FHA's system interface with the Department of Treasury's Do Not Pay System, FHA's origination systems for HUD IT security policy compliance, and the reverse mortgage system.

HUD Information Technology Modernization.--The Committee remains supportive of HUD's efforts to modernize its IT systems, which are critical to effectively manage its programs. For years, HUD has been hampered by outdated IT systems that are not integrated, which limit its ability to oversee grantees or efficiently manage HUD programs. The Committee is aware that HUD has undertaken efforts to better integrate systems, and encourages HUD to continue prioritizing mission-critical IT systems.

Cybersecurity Modernization.--The Consolidated Appropriations Act of 2018 provided $7,000,000 for cybersecurity improvements, and HUD has since presented a comprehensive Expenditure Plan to the Committee. HUD plans to implement two major projects to address cybersecurity risks: a Continuous Monitoring and Ongoing Authorization project and an agency-wide Enterprise Identity Credential Access Management [eICAM] system. This time-based process allows potential risks to cybersecurity to go undetected for an extended period of time. The proposed continuous monitoring and ongoing authorization project will allow HUD IT staff to be proactive in identifying and responding to security threats. The Committee supports HUD's proposal to integrate the eICAM system to meet Federal regulations, address challenges with authorization and identity management, and reduce maintenance costs. The Committee directs HUD to provide an updated progress report within 180 days of enactment of this act, with an estimated timeline for completion on these two major projects, including the status of key milestones and performance metrics established in the Cybersecurity Expenditure plan.

Unsanctioned Information Technology Development.--The Committee remains concerned about the development of IT systems outside of the Information Technology Fund. While the Committee understands that limited resources may prompt HUD offices to develop solutions with their own resources, the Committee continues to expect OCIO to monitor and oversee the development of any such applications and report to the House and Senate Committees on Appropriations the inventory of IT systems and applications both sanctioned and unsanctioned. The Committee directs the OCIO to monitor the development of new system solutions by every office in HUD to make sure they conform to HUD's enterprise architecture, and will be compatible with systems under development.

Operational Efficiencies.--The Committee remains interested in any cost savings or operational efficiencies that have resulted (or may result) from the Department's modernization efforts and directs HUD to provide an updated report on cost savings and efforts to implement GAO recommendations from the 2013 review of HUD's IT project management practices within 180 days of enactment of this act.

Office of Inspector General

Appropriations, 2019...$128,082,000

Budget estimate, 2020...129,400,000

Committee recommendation...132,489,000

PROGRAM DESCRIPTION

The Office of Inspector General [OIG] conducts independent investigations, audits, and evaluations not only to prevent and detect fraud, waste, and abuse, but also to promote efficiency and effectiveness in the programs and operations of the Department of Housing and Urban Development. This appropriation will finance all salaries and related expenses associated with the operation of the OIG.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $132,489,000 for the OIG, which is $3,089,000 more than the budget request and $4,407,000 more than the fiscal year 2019 enacted level.

Audit Reports.--The Committee expects the OIG to continue providing copies of all audit reports to the Committee immediately after they are issued and to make the Committee aware immediately of any review which recommends significant budgetary savings.

Improving Digital Services.--The Committee is pleased that the OIG recently enhanced its digital services by updating the website to show clear, evident categories of audits and reports, oversight authority, and HUD programs and offices.

Contracting Audits of Annual Financial Statements.--The Committee has included a directive in the bill for the OIG to procure and rely upon the services of an independent external auditor to audit fiscal year 2020 or subsequent financial statements of HUD, including the financial statements of the Federal Housing Administration and the Government National Mortgage Association. This action brings HUD into alignment with most cabinet-level agencies that procure services from external auditors to ensure compliance with Federal audit requirements for annual financial statements.

Continues with Part 9 of 9

TARGETED NEWS SERVICE, Harwood Place, Springfield, Virginia, USA: Myron Struck, editor; 703/304-1897; [email protected]; https://targetednews.com