United States Department of Housing and Urban Development, also known as HUD, is a Cabinet department in the Executive branch of the United States federal government. Although its beginnings were in the House and Home Financing Agency, it was founded as a Cabinet department in 1965, as part of the "Great Society" program of President Lyndon Johnson, to develop and execute policies on housing and metropolises.
Programs
The 203(k) program offers low down payment loans to primary resident owner occupants or nonprofit groups to buy and renovate a house. A scandal with the program arose in the 1990s in which at least 700 houses were sold for profit by real estate speculators taking the loans; at least 19 were arrested, and the situation devastated the housing market in Brooklyn and Harlem and resulted in $70 million in HUD loans going into default. Critics said that HUD's lax oversight of their program allowed the fraud to occur. In 1997, the HUD Inspector General had issued a report saying: "The program design encourages risky property deals, land sale and refinance schemes, overstated property appraisals, and phony or excessive fees.
One of the most successful HUD programs over the years has been the Multifamily Housing Service Coordinator Program. Each year since 1992, HUD has included in its Notice of Fund Availability (NOFA), a specific allocation of dollars to allow sponsors and owners of HUD multifamily housing for the elderly the opportunity to hire a Service Coordinator. The Service Coordinator provides case management and coordinative services to elderly residents, particularly to those who are "frail" and "at-risk" allowing them to remain in their current residence. As a result, thousands of senior citizens throughout the United States have been given the opportunity to continue to live independently instead of in an institutional facility such as a nursing home. Professional organizations such as the American Association of Service Coordinators provide support to HUD Service Coordinator through education, training, networking and advocacy.
Due to HUD's lending practices, it occasionally takes possession of a home when a lender it insures forecloses. Such properties are then generally sold off to the highest bidder through the HUD auction process. Buyers of HUD homes as their primary residences who make a full-price offer to HUD using FHA-insured mortgage financing receive seller concessions from HUD enabling them to use only $100 down payment.
History
The department was established on September 9, 1965, when Lyndon B. Johnson signed the Department of Housing and Urban Development Act[1] into law. It stipulated that the department was to be created no later than November 8, sixty days following the date of enactment. The actual implementation was postponed until January 13, 1966, following the completion of a special study group report on the federal role in solving urban problems.
HUD is administered by the United States Secretary of Housing and Urban Development. Shaun Donovan, a former New York City housing commissioner and former Deputy Assistant Secretary of the United States Department of Housing and Urban Development, is the current Secretary, having been confirmed by the United States Senate unanimously on January 22, 2009.[2] Its headquarters is located in the Robert C. Weaver Federal Building. Some important milestones for HUD's development include:[3][4]
June 27, 1934 - The National Housing Act creates the Federal Housing Administration, which helps provide mortgage insurance on loans made by FHA-approved lenders.[5]
September 1, 1937- Housing Act of 1937 creates the United States Housing Authority, which helps enact slum-clearance projects and construction of low-rent housing
February 3, 1938: The National Housing Act Amendments of 1938 is signed into law.[6] The law creates the Federal National Mortgage Association (FNMA), which provides a secondary market to the Federal Housing Administration[7]
July 27, 1947 – The Housing and Home Finance Agency is established through Reorganization Plan Number 3
July 15, 1949 – The Housing Act of 1949 is enacted to help eradicate slums and promote community development and redevelopment programs
August 2, 1954 - The Housing Act of 1954 establishes comprehensive planning assistance
September 23, 1959 – The Housing Act of 1959 allows funds for elderly housing
September 2, 1964 - The Housing Act of 1964 allows rehabilitation loans for homeowners
September 1965 – HUD is created as a cabinet level agency by the Department of Housing and Urban Development Act
April 1968 – The Fair Housing Act is made to ban discrimination in housing
August 1969 – The Brooke Amendment establishes that low income families only pay no more than 25 percent of their income for rent
August 1974 – Housing and Community Development Act of 1974 allows community development block grants and help for urban homesteading
October 1977 – The Housing and Community Act of 1977 sets up Urban Development Grants and continues elderly and handicapped assistance
July 1987 – The Stewart B. McKinney Homeless Assistance Act gives help to communities to deal with homelessness
February 1988 – The Housing and Community Development Act provides for the sale of public housing to resident management corporations
October 1992 – The HOPE VI program starts to revitalize public housing and how it works
October 1992 – The Housing and Community Development Act of 1992 codifies within its language the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 that creates the Office of Federal Housing Enterprise Oversight, and mandates HUD to set goals for lower income and underserved housing areas for the GSEs Fannie Mae and Freddie Mac
March 1996 – The Housing Opportunity Program Extension Act give public housing authorities the tools to screen out and evict residents who might endanger other existing residents due to substance abuse and criminal behavior
October 1998 – Government laws are proposed which would allow local housing authorities to open up more public housing to the middle class
November 2007 – HUD initiates program providing seller concessions to buyers of HUD homes, allowing them to use down payment of $100
The Office of Inspector General
The United States Congress enacted the Inspector General Act of 1978 to ensure integrity and efficiency in government. The Inspector General is appointed by the President and subject to Senate confirmation.
The Inspector General is responsible for conducting and supervising audits, investigations, and inspections relating to the programs and operations of the HUD. The OIG is to examine, evaluate and, where necessary, critique these operations and activities, recommending ways for the Department to carry out its responsibilities in the most effective, efficient, and economical manner possible.
Mission
The mission of the Office of Inspector General (OIG) is to: • Promote the integrity, efficiency and effectiveness of HUD programs and operations to assist the Department in meeting its mission. Detect and prevent waste, fraud, and abuse • Seek administrative sanctions, civil recoveries and/ or criminal prosecution of those responsible for waste, fraud and abuse in HUD programs and operations
The OIG accomplishes its mission by conducting investigations pertinent to its activities; by keeping Congress, the Secretary, and the public fully informed of its activities, and by working with staff (in this case of the HUD) in achieving success of its objectives and goals. Right now, the post of Inspector General of the HUD is vacant. Michael P. Stevens is the acting Inspector General.
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