Although loans guaranteed by the Federal Housing Administration can be the best way to buy a home with a low down payment, its lending guidelines are suddenly very strict.

The Neighborhood Watch guidelines mean that the average credit score for a loan (more…)

HUD established a long-term of goal of improving the energy efficiency of homes in its Housing Choice Voucher Program (Section several years ago.

Right now, HUD spends $5 billion per year on energy bills. That figure increased by 13.5 percent between 2006 and 2008, alone. Energy costs for subsidies to Section 8 increased 18 percent.

HUD provides utility allowances to 84 percent of the residents in its Section 8 program.

In their own words, HUD states that the focus of its energy plan is Energy Star. EnergyStar is a (more…)

While the Department of Housing and Urban Development has intimitated that it will seek way to help America’s housing stock “go green,” it is yet to provide concrete results in that direction.

HUD Secretary Shaun Donovan established a new department, known as the Office of Sustainability,” to research how HUD could lower the combined costs of housing.  HUD’s new rubric incorporates both direct housing costs as well as transporation costs.  It notes that the two now consume as much as 60 percent of household income.

This is a good idea.  For years, people have chosen to “drive ’til you qualify.” They have moved out to the suburbs and commuted to their jobs in the city.  It led to sprawl, and it masks the real costs of housing. Those Beazer “homes from the 130s” were located at the end of long commutes. In this framework, low-income households don’t really lower their housing costs so much as they shift housing costs over to transportation costs.

Section 8 does not tap into drive to you qualify, but it does work on some of the same prinicples. In the last entry of BankTalk, I speculated on the current problem: there is no incentive in place to encourage landlords to pay the costs of lowering the utility bills of their Section 8 tenants. It costs a lot of money to put in insulation. It costs a lot of (more…)

Housing counselors are upset with new administrative rules within the Department of Housing and Urban Development that make it hard to advise their clients.

For years, people seeking reverse mortgages have been obligated to get counseling. Many of the lenders involved in reverse mortgages are the same as the lenders that participated in subprime lending.  What’s worse, marketing for these mortgages often uses affinity spokespersons that play on the trust of borrowers.  In Kansas City, for example, one lender hired a now deceased Negro League baseball star.  Some even call reverse mortgages a form of subprime lending.

The requirement for counseling is linked to the concern over the populations that utilize these instruments.  Reverse mortgages appeal to retired people who have more home equity than cash.  Reverse mortgages allow seniors to stay in their homes, but to tap the built-up equity in their homes.  In such a mortgage, the lender gives the resident a monthly cash payment in exchange for the right to residents title.  The lender assumes the title upon the death of the resident.  It is a risk, because consumers may end up trading their equity for just one or two years of payments.  It is also a risk (more…)

While HUD announced the first round of Neighborhood Stabilization Program funding back in February, it has been a slow process getting those dollars into projects.  .

The Department of Housing and Urban Development announced plans to allocate $3.92 billion to buffet the mounting foreclosure crisis. NSP derives its monies from the Housing and Economic Recovery Act of 2008, through the Community Development Block Grant (CDBG) program. HUD announced a second round of NSP funding early this summer.  It is a smaller round, of approximately $2 billion.

Together, this $6 billion program is the most direct response by the government to stimulate the redevelopment of foreclosed properties.  In the context of federal spending, it is a drop in the bucket.  Six billion dollars is less than the sum of dollars spent (more…)