With the federal government deep in debt, it's looking to divorce itself from the housing/lending industry and assume more a regulatory roll.
The Federal Housing Administration Refinance Program is also on the chopping block because of its less than impressive performance in the first two months it was implemented. The $8 billion program, designed to offer underwater borrowers a refinance, received only 35 applications between Sept. 7, 2010 and the end of October that same year, according to the HFSC.
The committee is aimed to discontinue NeighborWorks America, a government-charter, nonprofit corporation with a national network of affiliated organizations that focus on community reinvestment activities such as mediation counseling. The program, an allocated cost of $195 million, overlaps the functions of the Department of Housing and Urban Development and "are duplicative of existing HUD programs and can be consolidated," the oversight plan says.
Only HOPE IV will be replaced. The program uses funds to convert distressed or dangerous public housing developments into mixed-use housing and costs $200 million annually. The committee is proposing to replace it with Choice Neighborhoods, an existing program that serves the same function and costs $140 million less.
Read it allAmong other programs the committee also wants to abolish are Rural Housing and Economic Development, which currently receives $25 million annually to provide grants to non-profit organizations for capacity home building in rural areas, and the Neighborhood Stabilization Program, which gives federal funds to states and local governments with high concentrations of foreclosed homes, subprime mortgage loans and delinquent home mortgages. Approximately $1 billion was allocated for NSP.