Prepared Oral Testimony for Alphonso Jackson, Secretary of Housing and Urban Development before the House Appropriate Committee Subcommittee on Transportation, Housing and Urban Development, and Related Agencies

Thank you, Chairman (John) Olver. I want to thank you, Mr. (Joe) Knollenberg, and the members of the subcommittee for this opportunity to appear today.

Mr. Chairman, the proposed Fiscal Year (FY) 2009 HUD budget represents an investment in the American people by the American people. This investment is measured in more than dollars. It is measured in the lives we touch...whether in creating and protecting sustainable homeownership, producing affordable rental housing, revitalizing our cities, or helping the homeless.

I believe we have a good budget. It is fiscally sound, adequately supports our legislative mission, and fits in well with the overall vision for the President's entire request. It is an historic investment, $38.5 billion for the programs at HUD. This is an increase of more than $3 billion, or nine percent, over last year's proposal. The budget is almost $1 billion more than our current budget authority.

This funding will be timely. We confront a housing crisis. America needs the President's request for $65 million in this budget for housing counseling. Those funds, in addition to NeighborWorks' $180 million, provide great services to those who reach out. Many Americans facing foreclosure would have greatly benefited from housing counseling. This funding will help partially address today's crisis and prevent another such situation in the future.

We also need to support other efforts to maintain current homeownership and stimulate new purchases. Mr. Chairman, last year the President and I introduced FHASecure to help more Americans facing foreclosure refinance into a safer, more secure FHA loan. We did this using current regulatory authority. There has been a noticeable increase in the number of closings. Two months ago, there were 2,500 closings a month at FHA. Now, there are 4,500 closings a week!

But we could do so much more with legislation to modernize the FHA. Congress needs to quickly send to the President's desk a bill that will strengthen FHA's ability to offer safer alternatives to high-cost, high-risk loans.

The Administration is also taking steps to ensure it is easy for homeowners to read the fine print when they do sign on the dotted line. That's why we are committed to RESPA reform. We hope to publish a new Real Estate Settlement Procedures Act (RESPA) rule in early March. We hope it will help bring much needed transparency to the home-buying process.

As in the past, Mr. Chairman, the largest part of our budget is for affordable rental housing. Combined, this budget seeks more than $29 billion for our rental assistance programs which we expect will help more than 4.8 million households. We are mindful of the continued need for more affordable rental housing, especially as low-and-middle-income workers still find themselves priced out of the real estate market in many cities. We need to maintain the units currently available and expand that number. This budget will help us do that.

While we are on the subject of public housing, I want to bring the subcommittee's attention to a particularly harmful bill that will be considered by the House later today. HUD is strongly committed to the successful transition to asset management for Public Housing Agencies (PHAs). The bill the House will vote on, H.R. 3521, would severely undermine PHAs' long-awaited conversion to asset management and the adoption of conventional business practices. It would eliminate any restriction or limitation on the amount of management and related fees that a PHA could charge through January 2011. And it would also exempt 88 percent of PHAs from asset management altogether. For these reasons, the Administration strongly opposes this legislation.

Finally, Mr. Chairman, the homeless must not be forgotten. We are making strides in cutting the number of chronically homeless with our "continuum of care" approach. For the first time ever, we saw a decrease in the number of chronically homeless last year - a drop of 12 percent. We must continue that progress. Our budget once again seeks an increase for homeless programs to continue this good work.

Mr. Chairman, I know you are mindful of the need to help our nation's homeless veterans. Americans are deeply, profoundly grateful for the service and sacrifice of our nation's veterans. In the proposed budget, there is a request for $75 million for our Veterans Affairs Supportive Housing Program (VASH). Prior to FY 2008, this program had not been funded since 1993. Working with the Veterans Administration, we will create an additional 9,800 vouchers for FY 2009, bringing the total to approximately 20,000 homeless veterans being served through housing and social services, double the number of available housing vouchers.

Overall, this is a good budget for the department...balanced, reasonable, appropriate, and workable. It allows us to operate within a framework of cooperation and partnership with related federal agencies, other levels of government, and non-profit initiatives.

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