Appendix - Department of Housing and Urban Development

[Appendix]
[Detailed Budget Estimates by Agency]
[Department of Housing and Urban Development]
[From the U.S. Government Printing Office, www.gpo.gov]

THE BUDGET FOR FISCAL YEAR 1998

[[Page 529]]

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

This chapter presents the budget and program estimates for the
Department of Housing and Urban Development (HUD).

For the past 4 years, the Department has been engaged in a
reinvention process which has emphasized: addressing homelessness
through comprehensive continuum of care strategies; transforming public
and assisted housing; enhancing homeownership opportunities through new
national and local partnerships; reducing racial barriers to housing;
and, encouraging locally-driven solutions and leveraging private sector
investment through initiatives like consolidated planning, and
Empowerment Zones and Enterprise Communities. An emphasis has also been
placed on reinventing HUD, itself. The 1998 budget continues to move
toward a ``right-side up'' Cabinet Department that is organized,
staffed, and empowered to respond to locally driven priorities rather
than Federal dictates.

As part of the 1997 reinvention process, the Department proposed
consolidating many of its programs into three core funds--with
incentives for good performance. The 1997 Appropriations Act did not
implement the Department's proposals but did enact a major
reconfiguration of the Department's housing accounts structure. Three
new accounts were created: Preserving Existing Housing Investment,
Development of Additional New Subsidized Housing, and Prevention of
Resident Displacement.

This new account structure was an important first step to better
organizing the Department's primary housing assistance programs. The
1998 budget further refines this structure to reflect the Department's
consolidation efforts. This new structure will also enhance the
Department's ability to administer and track its funds.

Activities funded under the Preserving Existing Housing Investment
account will be divided into two separate accounts--an operating fund
and a capital fund. Assistance provided for the elderly and disabled,
and Native Americans in the Development of Additional New Subsidized
Housing account in 1997 is being requested separately for 1998. Funds
for the elderly and disabled are in the Housing for Special Populations
account in 1998 and resources allocated to the Native American
population will be consolidated under a Native American Housing Block
Grants program as authorized by the 104th Congress. Funding for housing
certificates, Section 8 contract renewals, and amendments in 1997 was
provided in the Prevention of Resident Displacement account. This budget
proposes to fund these activities under the Housing Certificate Fund for
1998.

The 1998 Budget includes two Presidential initiatives related to
revitalizing America's urban areas. First, the HUD Budget requests
funding for a second round of Empowerment Zones and Enterprise
Communities. The first round has already proven successful in leveraging
private sector funds and promoting economic opportunity and community-
wide revitalization. Second, the Brownfields Redevelopment program will
enable cities to clean up polluted sites, returning them to productive
uses that create jobs. The program will also enable cities to address
the economic development needs of communities in and around such sites.

The 1998 Budget maintains Community Development Block Grant (CDBG)
funding. This program will continue to use a formula approach for
allocating funds for a wide range of community and economic development
activities. The Community Development Loan Guarantee program enables
communities to borrow in the private market with a Federal guarantee.
Communities must develop consolidated plans which identify local needs
and priorities in order to tap into CDBG and other HUD funds.

The HOME Investment Partnerships program will also continue formula
allocations to states and participating jurisdictions to assist in
expanding the supply of affordable housing.

The Homeless Assistance Grants program would consolidate HUD's six
Stewart B. McKinney homeless assistance programs into a performance-
based program that would enable communities to continue their
development and implementation of comprehensive, coordinated continuum
of care systems to address the needs of homeless people and families.
This is the fourth consecutive year that HUD has sought consolidation of
its homeless assistance programs to improve program administration and
effectiveness.

Funding is also included, either as set-asides or as separate
programs, for the following community and economic development and
affordable housing programs: Economic Development Grants; Homeownership
Zones; Habitat for Humanity; Youthbuild; Bridges to Work; and Capacity
Building for Community Development and Affordable Housing.

The Department is reproposing to consolidate several categorical
housing programs.

The Public Housing Operating Fund would fund the operating
costs of Public Housing. Through this fund, Public Housing Agencies will
have greater flexibility in attracting and retaining low- and moderate-
income families.

The Public Housing Capital Fund would address the capital
needs of Public Housing. Based on the Public Housing Modernization
program, this Fund will permit the upgrading of inventory and the
demolition and replacement of obsolete buildings. Funds will also be
available for: economic development supportive services; technical
assistance and intervention to improve troubled authorities and
management improvements; and the Tenant Opportunity Program.

The Housing Certificate Fund would address the problems
arising from lagging household income and high housing costs. The Fund
would be based on the existing voucher and certificate programs with
changes to make the system simpler and more effective. Funding for
section 8 contract renewals and amendments is included within this Fund.
The 1998 request includes 50,000 incremental certificates to help low-
income families move from welfare to work.

Other Housing Programs. Lead-paint hazard reduction
activities will be funded within the Community Development Block Grant
Fund. Several other programs that assist communities will remain as
free-standing activities: Housing Opportunities for Persons with AIDS,
Youthbuild, housing counseling, drug elimination activities, and
assistance for severely distressed public housing.

A major initiative reflected in the budget estimates is
``Multifamily Portfolio Reengineering,'' formerly known as ``Mark-to-
Market.'' This plan would reduce over-subsidized Section 8 contracts and
FHA-insured debt on properties. The goal of the initiative is to leave
all responsible owners with the ability to sustain the remaining
mortgage through the payment of market-derived rents by tenants.

[[Page 530]]

PUBLIC AND INDIAN HOUSING

Federal Funds

General and special funds:

[Prevention of Resident Displacement] Housing Certificate Fund

For activities and assistance to prevent the involuntary
displacement of low-income families, the elderly and the disabled
because of the loss of affordable housing stock, expiration of subsidy
contracts (other than contracts for which amounts are provided under the
head ``Preserving Existing Housing Investment'') or expiration of use
restrictions, or other changes in housing assistance arrangements, and
for other purposes, [$4,640,000,000] $10,676,000,000, to remain
available until expended: Provided, That of the total amount provided
under this head, [$3,600,000,000] $9,232,000,000 shall be for assistance
under the United States Housing Act of 1937 (42 U.S.C. 1437) for use in
connection with expiring or terminating section 8 subsidy contracts:
Provided further, That the Secretary may determine not to apply section
8(o)(6)(B) of the Act to housing vouchers during fiscal year [1997]
1998: Provided further, That of the total amount provided under this
head, $850,000,000 shall be for amendments to section 8 contracts other
than contracts for projects developed under section 202 of the Housing
Act of 1959, as amended: Provided further, That of the total amount
provided under this head, [$190,000,000] $594,000,000 shall be for
section 8 rental assistance under the United States Housing Act [of 1937
(42 U.S.C. 1437)] including assistance to relocate residents of
properties (i) that are owned by the Secretary and being disposed of or
(ii) that are discontinuing section 8 project-based assistance; [or
(iii) or subject to special workout assistance team intervention
compliance actions;] for the conversion of section 23 projects to
assistance under section 8; for funds to carry out the family
unification program; and for the relocation of witnesses in connection
with efforts to combat crime in public and assisted housing pursuant to
a request from a law enforcement or prosecution agency [: Provided
further, That of the total amount made available under this head,
$50,000,000 shall be made available to nonelderly disabled families
affected by the designation of a public housing development under
section 7 of such Act or the establishment of preferences in accordance
with section 651 of the Housing and Community Development Act of 1992
(42 U.S.C. 1361l)]. (Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0311-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Renew rental contracts............ 1,956 9,997
00.02 Contract amendments............... 900 850
00.03 New housing certificates.......... 240 594
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 3,096 11,441
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 1,594
22.00 New budget authority (gross)...... 4,690 10,676
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 4,690 11,441
23.95 New obligations................... -3,096 -11,441
24.40 Unobligated balance available, end
of year: Uninvested balance..... 1,594 829
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 4,640 10,676
42.00 Transferred from other accounts... 50
--------- --------- ----------
43.00 Appropriation (total)........... 4,690 10,676
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 4,690 10,676
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 1,364
73.10 New obligations................... 3,096 11,441
73.20 Total outlays (gross)............. -1,732 -5,604
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 1,364 7,201
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1,732 3,985
86.93 Outlays from current balances..... 1,619
--------- --------- ----------
87.00 Total outlays (gross)........... 1,732 5,604
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 4,690 10,676
90.00 Outlays........................... 1,732 5,604
---------------------------------------------------------------------------

This account provides funding for some of the activities previously
funded through the Annual Contributions for Assisted Housing account.
These include the renewal of expiring Section 8 contracts, amending of
Section 8 contracts, and the funding for additional Section 8 rental
assistance.

Annual Contributions For Assisted Housing

All balances remaining in the Preserving Existing Housing Investment
Account for Preservation shall be transferred to and merged with the
amounts previously provided for those purposes under this head.

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Lower income housing.............. 1,964 3,010
00.02 Public and Indian housing......... 2,907 1,695
00.03 Elderly/disabled grants........... 1,469 3,684
00.04 Other programs.................... 267 28
00.05 Contract renewals................. 3,345 1,892
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 9,952 10,309
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

Uninvested balance:
21.40 Uninvested balance............ 387 1,981
21.40 Uninvested balance............ 11,153 8,030
21.49 Contract authority.............. 73 88
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 11,613 10,099
22.00 New budget authority (gross)...... 9,819 -75
22.10 Resources available from
recoveries of prior year
obligations..................... 11,266 325
22.21 Unobligated balance transferred to
other accounts.................. -41
22.75 Balance of contract authority
withdrawn....................... -12,646
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 20,052 10,308
23.95 New obligations................... -9,952 -10,309
Unobligated balance available, end of year:

Uninvested balance:
24.40 Uninvested balance............ 1,981
24.40 Uninvested balance............ 8,030
24.49 Contract authority.............. 88
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 10,099
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 9,819
41.00 Transferred to other accounts... -75
--------- --------- ----------
43.00 Appropriation (total)......... 9,819 -75
Permanent:

60.05 Appropriation (indefinite)...... 632 19,848 15,541
60.49 Portion applied to liquidate
contract authority............ -632 -19,848 -15,541
--------- --------- ----------
63.00 Appropriation (total).........
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 9,819 -75
----------------------------------------------------------------------------

Change in unpaid obligations:
Unpaid obligations, start of year:

Obligated balance:
72.40 Appropriation................. 60,721 38,135 49,356
72.49 Contract authority............ 69,331 56,034 36,236
72.90 Fund balance.................. 24 14,265 12,614
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 130,076 108,434 98,206
73.10 New obligations................... 9,952 10,309
73.20 Total outlays (gross)............. -20,327 -19,847 -15,912

[[Page 531]]

73.31 Obligated balance transferred to
other accounts.................. -367
73.45 Adjustments in unexpired accounts. -11,266 -325
Unpaid obligations, end of year:

Obligated balance:
74.40 Appropriation................. 38,135 49,356 51,184
74.49 Contract authority............ 56,034 36,236 20,695
74.90 Fund balance.................. 14,265 12,614 10,415
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 108,434 98,206 82,294
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1,019
86.93 Outlays from current balances..... 19,308 19,847 15,912
--------- --------- ----------
87.00 Total outlays (gross)........... 20,327 19,847 15,912
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 9,819 -75
90.00 Outlays........................... 20,327 19,847 15,912
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Enacted/requested:
Budget Authority.................. 9,819 -75
Outlays........................... 20,327 19,847 15,912
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. -855
Outlays........................... -375
Rescission proposal:
Budget Authority.................. -250
Outlays........................... -10 -25
------------------------------------
Total:
Budget Authority.................. 9,819 -325 -855
Outlays........................... 20,327 19,837 15,512
====================================

Status of Contract Authority (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0164-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Balance, start of year:
0100 Balance, start of year............ 73 88
0100 Balance, start of year............ 69,331 56,034 36,236
0340 Unobligated balance transferred... -41
0400 Appropriation to liquidate
contract authority.............. -632 -19,848 -15,541
0600 Balance of contract authority
withdrawn....................... -12,646
Balance, end of year:
0700 Balance, end of year.............. 88
0700 Balance, end of year.............. 56,034 36,236 20,695
---------------------------------------------------------------------------

The Annual Contributions for Assisted Housing account provided
assistance under three major categories.

Low-income housing (section 8).--Included within the section 8
category were incremental rental assistance in the form of housing
certificates and housing vouchers; Public Housing and Housing
Relocation/Replacement opt-out units; Housing Opportunities for Persons
with AIDS; section 23 conversions; and loan management and property
disposition activities.

Housing for the elderly and disabled (section 202 and 811).--The
Cranston-Gonzales National Affordable Housing Act authorized a grant
program to make new construction assistance available to elderly and
disabled persons. Both the grant funding and the Rental Assistance--or
operating subsidy--needed to aid these low-income tenants was provided
under the annual contributions account.

Public and Indian housing.--New development funding was provided for
both Public Housing and for Indian Housing within this account. In
addition, funding was provided for public and indian housing
modernization activities and public/indian housing amendments and lease
adjustments. Funding was also provided for Public Housing Service
Coordinators and Family Investment Centers.

The Annual Contributions for Assisted Housing account provided
funding for a wide range of housing assistance through the Low-Income
Housing (Section 8), Housing for the Elderly and Disabled, and the
Public and Indian Housing programs. In addition, various housing-related
programs were carried out through funding provided under this account.
Consistent with HUD's reinvention process, many of these activities will
be funded under the new consolidated Funds being proposed for 1998.

No new appropriation is requested for this account. Language is
proposed to permit the transfer into this account of all unobligated and
obligated balances for preservation assistance, which was previously
made available in 1997 under the Preserving Existing Housing Investment
account (See table below).

Proposed Transfer of Balances

[In millions]

1996 Actual 1997 est. 1998 est.
Annual Contributions:
Budget Authority.................. 9,819 (325) (855)
Outlays........................... 20,327 19,837 15,512
Preserving Existing Housing
Investment:
Budget Authority.................. 350
Outlays........................... 140 210
------------------------------------
Total.........................
Budget Authority.................. 9,819 25 (855)
Outlays........................... 20,327 19,977 15,722
====================================

The 1998 budget proposes to transfer all preservation balances to
the Annual Contributions for Assisted Housing account.

Annual Contributions for Assisted Housing

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0164-2-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... -855
22.10 Resources available from
recoveries of prior year
obligations..................... 855
--------- --------- ----------
23.90 Total budgetary resources
available for obligation......
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation.....................
40.35 Appropriation rescinded........... -855
--------- --------- ----------
43.00 Appropriation (total)........... -855
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... -855
----------------------------------------------------------------------------

Change in unpaid obligations:
73.20 Total outlays (gross)............. 375
73.45 Adjustments in unexpired accounts. -855
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation -480
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... -375
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -855
90.00 Outlays........................... -375
---------------------------------------------------------------------------

An estimated $855 million of budget authority is anticipated to be
recaptured and canceled in 1998 as a result of enactment and
implementation of HUD's Multifamily Portfolio Reengineering proposal.
This proposal would restructure mortgages of selected FHA-insured
multifamily properties. These properties are presently subsidized at
above market rates through HUD's rental assistance programs. Budget
authority remaining on these long-term, multi-year contracts would be
canceled. In the future, additional outlay savings will be achieved by
avoiding the need for appropriations for funds to continue subsidizing
these high-cost contracts.

[[Page 532]]

Preserving Existing-Housing Investment

[For operating, maintaining, revitalizing, rehabilitating,
preserving, and protecting existing housing developments for low-income
families, and the elderly, and the disabled, $5,750,000,000, to remain
available until expended: Provided, That of the total amount made
available under this head, $2,900,000,000 shall be available for
payments to public housing agencies and Indian housing authorities for
operating subsidies for low-income housing projects as authorized by
section 9 of the United States Housing Act of 1937, as amended (42
U.S.C. 1437g): Provided further, That of the total amount made available
under this head, $2,500,000,000 shall be available for modernization of
existing public housing projects as authorized under section 14 of the
United States Housing Act of 1937, as amended (42 U.S.C. 1437l), of
which $10,000,000 shall be for carrying out activities under section
6(j) of the United States Housing Act of 1937 and technical assistance
for the inspection of public housing units, contract expertise, and
training and technical assistance directly or indirectly, under grants,
contracts, or cooperative agreements, to assist in the oversight and
management of public and Indian housing (whether or not the housing is
being modernized with assistance under this proviso) or tenant-based
assistance, including, but not limited to, an annual resident survey,
data collection and analysis, training and technical assistance by or to
officials and employees of the department and of public housing agencies
and to residents in connection with the public and Indian housing
program: Provided further, That of the total amount provided under this
head, $350,000,000 shall be available for use in conjunction with
properties that are eligible for assistance under the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 (LIHPRHA) or the
Emergency Low Income Housing Preservation Act of 1987 (ELIHPA), of which
$75,000,000 shall be available for obligation until March 1, 1997 for
projects (1) that are subject to a repayment or settlement agreement
that was executed between the owner and the Secretary prior to September
1, 1995; (2) whose submissions were delayed as a result of their
location in areas that were designated as a Federal disaster area in a
Presidential Disaster Declaration; or (3) whose processing was, in fact
or in practical effect, suspended, deferred, or interrupted for a period
of twelve months or more because of differing interpretations, by the
Secretary and an owner or by the Secretary and a State or local rent
regulatory agency, concerning the timing of filing eligibility or the
effect of a presumptively applicable State or local rent control law or
regulation on the determination of preservation value under section 213
of LIHPRHA, as amended, if the owner of such project filed notice of
intent to extend the low-income affordability restrictions of the
housing, or transfer to a qualified purchaser who would extend such
restrictions, on or before November 1, 1993; and of which, up to
$100,000,000 may be used for rental assistance to prevent displacement
of families residing in projects whose owners prepay their mortgages;
and the balance of which shall be available from the effective date of
this Act for sales to preferred priority purchasers: Provided further,
That with the exception of projects described in clauses (1), (2), or
(3) of the preceding proviso, the Secretary shall, notwithstanding any
other provision of law, suspend further processing of preservation
applications which have not heretofore received approval of a plan of
action: Provided further, That $150,000,000 of amounts recaptured from
interest reduction payment contracts for section 236 projects whose
owners prepay their mortgages during fiscal year 1997 shall be
rescinded: Provided further, That an owner of eligible low-income
housing may prepay the mortgage or request voluntary termination of a
mortgage insurance contract, so long as said owner agrees not to raise
rents for sixty days after such prepayment: Provided further, That such
developments have been determined to have preservation equity at least
equal to the lesser of $5,000 per unit or $500,000 per project or the
equivalent of eight times the most recently published monthly fair
market rent for the area in which the project is located as the
appropriate unit size for all of the units in the eligible project:
Provided further, That the Secretary may modify the regulatory agreement
to permit owners and priority purchasers to retain rental income in
excess of the basic rental charge in projects assisted under section 236
of the National Housing Act, for the purpose of preserving the low- and
moderate-income character of the housing: Provided further, That
eligible low-income housing shall include properties meeting the
requirements of this paragraph with mortgages that are held by a State
agency as a result of a sale by the Secretary without insurance, which
immediately before the sale would have been eligible low-income housing
under LIHPRHA: Provided further, That notwithstanding any other
provision of law, subject to the availability of appropriated funds,
each low-income family, and moderate-income family who is elderly or
disabled or is residing in a low-vacancy area, residing in the housing
on the date of prepayment or voluntary termination, and whose rent, as a
result of a rent increase occurring no later than one year after the
date of the prepayment, exceeds 30 percent of adjusted income, shall be
offered tenant-based assistance in accordance with section 8 or any
successor program, under which the family shall pay no less for rent
than it paid on such date: Provided further, That any family receiving
tenant-based assistance under the preceding proviso may elect (1) to
remain in the unit of the housing and if the rent exceeds the fair
market rent or payment standard, as applicable, the rent shall be deemed
to be the applicable standard, so long as the administering public
housing agency finds that the rent is reasonable in comparison with
rents charged for comparable unassisted housing units in the market or
(2) to move from the housing and the rent will be subject to the fair
market rent of the payment standard, as applicable, under existing
program rules and procedures: Provided further, That the tenant-based
assistance made available under the preceding two provisos are in lieu
of benefits provided in subsections 223(b), (c), and (d) of the Low-
Income Housing Preservation and Resident Homeownership Act of 1990:
Provided further, That any sales shall be funded using the capital grant
available under section 220(d)(3)(A) of LIHPRHA: Provided further, That
any extensions shall be funded using a non-interest-bearing capital
(direct) loan by the Secretary not in excess of the amount of the cost
of rehabilitation approved in the plan of action plus 65 percent of the
property's preservation equity and under such other terms and conditions
as the Secretary may prescribe: Provided further, That any capital grant
shall be limited to seven times, and any capital loan limited to six
times, the annual fair market rent for the project, as determined using
the fair market rent for fiscal year 1997 for the area in which the
project is located, using the appropriate apartment sizes and mix in the
eligible project, except where, upon the request of a priority
purchaser, the Secretary determines that a greater amount is necessary
and appropriate to preserve low-income housing: Provided further, That
section 241(f) of the National Housing Act is repealed and insurance
under such section shall not be offered as an incentive under LIHPRHA
and ELIHPA: Provided further, That up to $10,000,000 of the amount of
$350,000,000 made available by a preceding proviso in this paragraph may
be used at the discretion of the Secretary to reimburse owners of
eligible properties for which plans of action were submitted prior to
the effective date of this Act, but were not executed for lack of
available funds, with such reimbursement available only for documented
costs directly applicable to the preparation of the plan of action as
determined by the Secretary, and shall be made available on terms and
conditions to be established by the Secretary: Provided further, That,
notwithstanding any other provision of law, a priority purchaser may
utilize assistance under the HOME Investment Partnerships Act or the Low
Income Housing Tax Credit: Provided further, That projects with approved
plans of action which exceed the limitations on eligibility for funding
imposed by this Act may submit revised plans of action which conform to
these limitations by March 1, 1997, and retain the priority for funding
otherwise applicable from the original date of approval of their plan of
action, subject to securing any additional necessary funding commitments
by August 1, 1997.] (Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0312-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 5,750
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 5,750
23.95 New obligations................... -5,750
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 5,750
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 4,218

[[Page 533]]

73.10 New obligations................... 5,750
73.20 Total outlays (gross)............. -1,532 -1,962
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 4,218 2,256
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1,532
86.93 Outlays from current balances..... 1,962
--------- --------- ----------
87.00 Total outlays (gross)........... 1,532 1,962
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 5,750
90.00 Outlays........................... 1,532 1,962
---------------------------------------------------------------------------

Public Housing Capital Fund

(including transfers of funds)

For the Public Housing Capital Fund Program under the United States
Housing Act of 1937, as amended (42 U.S.C. 1437), $2,500,000,000, to
remain available until expended for modernization of existing public
housing projects as authorized under section 14 of such Act, of which
$50,000,000 shall be available for grants to public housing agencies,
non-profit corporations, and other appropriate entities for a supportive
services program to assist residents of public and assisted housing,
former residents of such housing receiving tenant-based assistance under
section 8 of such Act (42 U.S.C. 1437f), and other low-income families
and individuals to become self-sufficient: Provided, That the program
shall provide supportive services, principally for the benefit of public
housing residents, to the elderly and the disabled, and to families with
children where the head of household would benefit from the receipt of
supportive services and is working, seeking work, or is preparing for
work by participating in job training or educational programs: Provided
further, That the supportive services may include congregate services
for the elderly and disabled, service coordinators, and coordinated
educational, training, and other supportive services, including academic
skills training, job search assistance, assistance related to retaining
employment, vocational and entrepreneurship development and support
programs, transportation, and child care: Provided further, That the
Secretary shall require applicants to demonstrate firm commitments of
funding or services from other sources: Provided further, That the
Secretary shall select public and Indian housing agencies to receive
assistance under this head on a competitive basis, taking into account
the quality of the proposed program. Provided further, That of the total
amounts, $45,000,000 shall be for carrying out activities under section
6(j) of such Act and technical assistance for the inspection of public
housing units, contract expertise, and training and technical assistance
directly or indirectly, under grants, contracts, or cooperative
agreements, to assist in the oversight and management of public housing
(whether or not the housing is being modernized with assistance under
this proviso) or tenant-based assistance, including, but no limited to,
an annual resident survey, data collection and analysis, training and
technical assistance by or to officials and employees of the department
and of public housing agencies and to residents in connection with the
public housing program and for lease adjustments to section 23 projects;
Provided further, That of the total amount, $5,000,000 shall be for
activities currently eligible under the Tenant Opportunity program:
Provided, That all balances, as of September 30, 1997, of funds
heretofore provided (other than for Indian families) for the development
or acquisition costs of public housing, for modernization of existing
public housing projects, for public housing amendments, for public
housing modernization and development technical assistance, for lease
adjustments under the section 23 program, and for the Family Investment
Centers program, shall be transferred to and merged with amounts made
available under this heading.

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0304-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 2,500
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 2,500
23.95 New obligations................... -2,500
24.40 Unobligated balance available, end
of year: Uninvested balance.....
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 2,500
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation
73.10 New obligations................... 2,500
73.20 Total outlays (gross)............. -13
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 2,487
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 13
86.93 Outlays from current balances.....
--------- --------- ----------
87.00 Total outlays (gross)........... 13
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 2,500
90.00 Outlays........................... 13
---------------------------------------------------------------------------

Proposed Transfer of Balances

[In millions]

1996 Actual 1997 est. 1998 est.
Annual Contributions:
Budget Authority.................. 2,711
Outlays........................... 4,548 4,296 3,579
Preserving Existing Housing
Investment:
Budget Authority.................. 2,500
Outlays........................... 0 276
Public Housing Capitol Fund:
Budget Authority.................. 2,500
Outlays........................... 13
------------------------------------
Total.........................
Budget Authority.................. 2,711 2,500 2,500
Outlays........................... 4,548 4,296 3,868
====================================

The 1998 budget proposes to transfer all Modernization/Development
balances to the Public Housing Capital Fund.

Public Housing Operating Fund

(including transfers of funds)

For payments to public housing agencies for operating subsidies for
low-income housing projects as authorized by section 9 of the United
States Housing Act of 1937, as amended (42 U.S.C. 1437g),
$2,900,000,000, to remain available until expended: Provided, That all
balances outstanding, as of September 30, 1997, of funds heretofore
provided (other than for Indian families) for payments to public housing
agencies for operating subsidies for low-income housing projects, shall
be transferred to and merged with amounts made available under this
heading.

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0163-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Operating subsidies............... 2,800 2,900
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 2,800 2,900
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 2,800 2,900
23.95 New obligations................... -2,800 -2,900
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 2,800 2,900
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 1,507 1,606 85
73.10 New obligations................... 2,800 2,900
73.20 Total outlays (gross)............. -2,688 -1,521 -1,421
73.40 Adjustments in expired accounts... -13

[[Page 534]]

74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 1,606 85 1,564
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1,202 1,392
86.93 Outlays from current balances..... 1,486 1,521 29
--------- --------- ----------
87.00 Total outlays (gross)........... 2,688 1,521 1,421
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 2,800 2,900
90.00 Outlays........................... 2,688 1,521 1,421
---------------------------------------------------------------------------

Proposed Transfer of Balances

[In millions]

1996 Actual 1997 est. 1998 est.
Public Housing Operating Fund:
Budget Authority.................. 2,900 2,900
Outlays........................... 2,688 1,521 1,421
Preserving Existing Housing
Investment:
Budget Authority.................. 2,800
Outlays........................... 1,392 1,479
------------------------------------
Total.........................
Budget Authority.................. 2,900 2,800 2,900
Outlays........................... 2,688 2,913 2,900
====================================

The 1998 budget proposes to transfer all Operating Subsidies to the
Public Housing Operating Fund.

Operating subsidy payments are provided to assist local Public
Housing Agencies (PHAs) to meet certain deficits in the operation of
PHA's. These payments are in addition to the debt service and capital
funding provided by HUD for development and modernization of low-income
housing.

In 1997, funding for these activities was provided under the
Preserving Existing Housing Investment Fund.

Beginning in 1998, funding for these activities would be provided
under the Public Housing Operating Fund.

In 1998, operating subsidy payments for tribally designated housing
entities would be provided under the Native American Housing Block Grant
program.

Drug Elimination Grants for Low-Income Housing

(including transfer of funds)

For grants to public and Indian housing agencies for use in
eliminating crime in public housing projects authorized by 42 U.S.C.
11901-11908, for grants for federally assisted low-income housing
authorized by 42 U.S.C. 11909, and for drug information clearinghouse
services authorized by 42 U.S.C. 11921-11925, $290,000,000, to remain
available until expended, $10,000,000 of which shall be for grants,
technical assistance, contracts and other assistance training, program
assessment, and execution for or on behalf of public housing agencies,
[and] resident organizations, Indian Tribes and their Tribally
designated housing entities (TDHEs) (including the cost of necessary
travel for participants in such training), [$5,000,000] $10,000,000, of
which shall be used in connection with efforts to combat violent crime
in public and assisted housing under the Operation Safe Home Program
administered by the Inspector General of the Department of Housing and
Urban Development, and [$5,000,000] $10,000,000 of which shall be
provided to the Office of Inspector General for Operation Safe Home:
Provided, That the term ``drug-related crime'', as defined in 42 U.S.C.
11905(2), shall also include other types of crime as determined by the
Secretary: Provided further, That notwithstanding section 5130(c) of the
Anti-Drug Abuse Act of 1988 (42 U.S.C. 11909(c)), the Secretary may
determine not to use any such funds to provide public housing youth
sports grants. (Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0197-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 243 290 290
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 20 68 68
22.00 New budget authority (gross)...... 290 290 290
22.10 Resources available from
recoveries of prior year
obligations..................... 1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 311 358 358
23.95 New obligations................... -243 -290 -290
24.40 Unobligated balance available, end
of year: Uninvested balance..... 68 68 68
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 290 290 290
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 532 516 595
73.10 New obligations................... 243 290 290
73.20 Total outlays (gross)............. -259 -210 -344
73.45 Adjustments in unexpired accounts. -1
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 516 595 541
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 259 210 344
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 290 290 290
90.00 Outlays........................... 259 210 344
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Enacted/requested:
Budget Authority.................. 290 290 290
Outlays........................... 259 210 344
Supplemental proposal:
Budget Authority.................. 30
Outlays........................... 3
------------------------------------
Total:
Budget Authority.................. 290 320 290
Outlays........................... 259 210 347
====================================

The $290 million requested for this program in FY 1998 includes
funding for technical assistance for drug elimination and operation safe
home activities.

Revitalization of Severely Distressed Public Housing [(Hope VII)] (Hope
VI)

For grants to public housing agencies for assisting in the
demolition of obsolete public housing projects or portions thereof, the
revitalization (where appropriate) of sites (including remaining public
housing units) on which such projects are located, replacement housing
which will avoid or lessen concentrations of very low-income families,
and tenant-based assistance in accordance with section 8 of the United
States Housing Act of 1937; and for providing replacement housing and
assisting tenants to be displaced by the demolition, [$550,000,000]
$524,000,000, to remain available until expended, of which the Secretary
may use up to $2,500,000 for technical assistance, to be provided
directly or indirectly by grants, contracts or cooperative agreements,
including training and cost of necessary travel for participants in such
training, by or to officials and employees of the Department and of
public housing agencies and to residents[: Provided, That no funds
appropriated in this title shall be used for any purpose that is not
provided for herein, in the Housing Act of 1937, in the Appropriations
Acts for Veterans Affairs, Housing and Urban Development, and
Independent Agencies, for the fiscal years 1993, 1994, and 1995, and the
Omnibus Consolidated Rescis-

[[Page 535]]

sions and Appropriations Act of 1996: Provided further, That none of
such funds shall be used directly or indirectly by granting competitive
advantage in awards to settle litigation or pay judgments, unless
expressly permitted herein: Provided further, That, notwithstanding any
other provision of law, the funds made available to the Housing
Authority of New Orleans under HOPE VI for purposes of Desire Homes,
shall not be obligated or expended for on-site construction until an
independent third party has determined whether the site is appropriate].
(Departments of Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0218-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 57 599 557
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 116 539 490
22.00 New budget authority (gross)...... 480 550 524
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 596 1,089 1,014
23.95 New obligations................... -57 -599 -557
24.40 Unobligated balance available, end
of year: Uninvested balance..... 539 490 457
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 480 550 524
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 1,430 1,377 1,693
73.10 New obligations................... 57 599 557
73.20 Total outlays (gross)............. -110 -283 -409
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 1,377 1,693 1,841
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 12
86.93 Outlays from current balances..... 110 283 397
--------- --------- ----------
87.00 Total outlays (gross)........... 110 283 409
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 480 550 524
90.00 Outlays........................... 110 283 409
---------------------------------------------------------------------------

This program provides Federal resources to rehabilitate and restore
severely distressed public housing projects, thereby expanding the
supply of decent, safe, and affordable housing for low-income renters.
Funds provided to this program are in addition to the substantial
resources provided for the public housing modernization program and are
specifically targeted to the units in most need of attention.

Native American Housing Block Grants

(including transfer of funds)

For the Native American Housing Block Grants program, as authorized
under title I of the Native American Housing Assistance and Self-
Determination Act of 1996 (Public Law 104-330), $485,000,000, to remain
available until expended, of which $5,000,000, shall be used to support
the inspection of Indian housing units, contract expertise, training,
and technical assistance in the oversight and management of Indian
housing and tenant-based assistance, including up to $200,000 for
related travel: Provided, That all balances outstanding as of September
30, 1997, previously appropriated under the headings ``Annual
Contributions for Assisted Housing'', ``Development of Additional New
Subsidized Housing'', ``Preserving Existing Housing Development'',
``HOME Investment Partnerships Program'', ``Emergency Shelter Grants
Program,'' and ``Homeless Assistance Funds'', identified for Indian
Housing Authorities and other agencies primarily serving Indian or
Indian areas, shall be transferred to and merged with amounts made under
this heading.

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0313-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 485
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 485
23.95 New obligations................... -485
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 485
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation
73.10 New obligations................... 485
73.20 Total outlays (gross)............. -57
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 429
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 57
86.93 Outlays from current balances.....
--------- --------- ----------
87.00 Total outlays (gross)........... 57
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 485
90.00 Outlays........................... 57
---------------------------------------------------------------------------

Proposed Transfer of Balances

[In millions]

1996 est. 1997 est. 1998 est.
Indian Development (Annual
Contributions):
Budget Authority.................. 163
Outlays........................... 252 251 214
Indian Development (Development of
Additional New Subsidized
Housing):
Budget Authority.................. 200
Outlays........................... 0 10
Modernization:
Budget Authority.................. 149 162
Outlays........................... 161 162 181
HOME:
Budget Authority.................. 14 21
Outlays........................... 13 14 25
Homeless:
Budget Authority.................. 1 1
Outlays........................... 1 1 1
Native American Block Grant:
Budget Authority.................. 485
Outlays........................... 57
------------------------------------
Total.........................
Budget Authority.................. 327 384 485
Outlays........................... 427 428 488
====================================

The 1998 budget proposes to transfer all obligated and unobligated
balances from Annual Contributions, Development of Additional New
Subsidized Housing, Preserving Existing Housing Investment, HOME
Investment Partnerships Program Emergency Shelter Grants, and Homeless
Assistance for Indian housing authorities and other agencies primarily
serving Indians or Indian areas to the Native American Housing Block
Grants Program.

Title I of the Native American Housing Assistance and Self-
Determination Act of 1996 (P.L. 104-330) authorized the Native American
Housing Block Grants program. This program provides an allocation of
funds on a formula basis to Indian tribes and their tribally designated
housing entities to help them address housing needs within their
communities. Indian tribes will use performance measures and benchmarks
that are consistent with the national goals of the program, but can base
these measures on the needs and priorities they establish in their own
Indian housing plan.

[[Page 536]]

Public enterprise funds:

Low-Rent Public Housing--Loans and Other Expenses

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Capital investment: Loans to
public housing agencies and
Indian housing authorities...... 38 50 50
--------- --------- ----------
10.00 Total obligations (object class
33.0)......................... 38 50 50
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 6 13 13
22.00 New budget authority (gross)...... 107 115 118
22.60 Redemption of debt................ -62 -65 -68
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 51 63 63
23.95 New obligations................... -38 -50 -50
24.40 Unobligated balance available, end
of year: Uninvested balance..... 13 13 13
----------------------------------------------------------------------------

New budget authority (gross), detail:
67.15 Authority to borrow (indefinite).. 20 50 50
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 87 65 68
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 107 115 118
----------------------------------------------------------------------------

Change in unpaid obligations:
Unpaid obligations, start of year:

Obligated balance:
72.40 Appropriation................. 1,288 1,176 1,064
72.90 Fund balance..................
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 1,288 1,176 1,064
73.10 New obligations................... 38 50 50
73.20 Total outlays (gross)............. -150 -162 -165
Unpaid obligations, end of year:

Obligated balance:
74.40 Appropriation................. 1,176 1,064
74.90 Fund balance.................. 950
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 1,176 1,064 950
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 50 65 68
86.98 Outlays from permanent balances... 100 97 97
--------- --------- ----------
87.00 Total outlays (gross)........... 150 162 165
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
88.00 Federal sources............... -62 -65 -68
88.40 Non-Federal sources........... -25
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -87 -65 -68
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 20 50 50
90.00 Outlays........................... 64 97 97
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4098-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 1,689 1,627 1,562
1251 Repayments: Repayments and
prepayments..................... -62 -65 -65
--------- --------- ----------
1290 Outstanding, end of year........ 1,627 1,562 1,497
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4098-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 4,132 3,861 3,507
2251 Repayments and prepayments........ -271 -354 -280
--------- --------- ----------
2290 Outstanding, end of year........ 3,861 3,507 3,227
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 3,861 3,507 3,227
---------------------------------------------------------------------------

The Low-Rent Public Housing Loan Fund is used to provide direct
Federal loans to fund remaining Public Housing Agency and Indian Housing
Authority construction, acquisition, and modernization activities
reserved under the Annual Contributions appropriation through 1986.
These loans are made from borrowings from the Treasury. Under
legislation enacted during 1986 (Public Law 99-272), the borrowings from
the Treasury are forgiven at the end of each fiscal year and the loans
to PHAs/IHAs are forgiven as construction, acquisition, and
modernization activities are completed. Under the provisions of this
legislation, $20 million of borrowings from the Treasury were forgiven
in 1996, an estimated $50 million will be borrowed from the Treasury and
forgiven in 1997, and an estimated $50 million will be borrowed from the
Treasury and forgiven in 1998. The table below shows the status of
outstanding loans for the period 1996-1998. The balance at the end of
each year represents administrative loans, off-site facility loans, and
preliminary loans on projects never undertaken and excess financing.

PUBLIC HOUSING AGENCIES/INDIAN HOUSING AUTHORITIES

Loans Outstanding

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Outstanding, start of year.......... 64 45 45
Direct loan disbursements........... 38 50 50
Repayments.......................... -20
Adjustments......................... 2
Total loans forgiven................ -39 -50 -50
------------------------------------
Outstanding, end of year............ 45 45 45
====================================

Since 1987, new reservations of capital funds for construction,
acquisition, and modernization activities have been provided directly
from the Annual Contributions, Preserving Existing Housing Investment,
and Development of Additional New Subsidized Housing appropriations.

Operating results.--The actual and estimated net operating income
for 1995, 1996, 1997, and 1998 follows:

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4098-0-3-604 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 116 112 108 104
0102 Expense........................... -131 -127 -123 -119
------------ -------------- ------------ -------------
0109 Net income or loss (-)............ -15 -15 -15 -15
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1101 Fund balances with Treasury..... 1,294 1,189 1,084 979
Investments in US securities:
1106 Receivables, net.............. 1,791 1,726 1,661 1,596
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 64 45 45 45
1602 Interest receivable............. 6 3 3 3
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -12 -12 -12 -12
1604 Direct loans and interest
receivable, net............... 58 36 36 36
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 58 36 36 36
------------ -------------- ------------ -------------
1999 Total assets.................... 3,143 2,951 2,781 2,611

[[Page 537]]

LIABILITIES:
Federal liabilities:

2102 Interest payable................ 205 198 191 184
2104 Resources payable to Treasury... 1,688 1,627 1,565 1,503
2207 Non-Federal liabilities: Other.... 1 1 1 1
------------ -------------- ------------ -------------
2999 Total liabilities............... 1,894 1,826 1,757 1,688
NET POSITION:
3100 Appropriated capital.............. 1,184 1,076 968 860
3300 Cumulative results of operations.. 65 49 56 63
------------ -------------- ------------ -------------
3999 Total net position.............. 1,249 1,125 1,024 923
------------ -------------- ------------ -------------
4999 Total liabilities and net position 3,143 2,951 2,781 2,611
-----------------------------------------------------------------------------------------------

Credit accounts:

Indian Housing Loan Guarantee Fund Program Account

For the cost of guaranteed loans, as authorized by section 184 of
the Housing and Community Development Act of 1992 (106 Stat. 3739)
$3,000,000, to remain available until expended: Provided, That such
costs, including the costs of modifying such loans, shall be as defined
in section 502 of the Congressional Budget Act of 1974, as amended:
Provided further, That these funds are available to subsidize total loan
principal, any part of which is to be guaranteed, not to exceed
$36,900,000. (Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 3 3 3
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 3 3 3
23.95 New obligations................... -3 -3 -3
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 3 3 3
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 3 6 6
73.10 New obligations................... 3 3 3
73.20 Total outlays (gross)............. -2 -3
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 6 6 6
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 2 2
86.93 Outlays from current balances..... 1
--------- --------- ----------
87.00 Total outlays (gross)........... 2 3
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 3 3 3
90.00 Outlays........................... 2 3
---------------------------------------------------------------------------

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0223-0-1-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Guaranteed loan levels supportable by subsidy
budget authority:
2150 Loan guarantee levels............. 37 37 37
--------- --------- ----------
2159 Total loan guarantee levels..... 37 37 37
Guaranteed loan subsidy (in percent):
2320 Subsidy rate...................... 8.13 8.13 8.13
--------- --------- ----------
2329 Weighted average subsidy rate... 8.13 8.13 8.13
Guaranteed loan subsidy budget authority:
2330 Subsidy budget authority.......... 3 3 3
--------- --------- ----------
2339 Total subsidy budget authority.. 3 3 3
Guaranteed loan subsidy outlays:
2340 Subsidy outlays................... 2 3
--------- --------- ----------
2349 Total subsidy outlays........... 2 3
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, this account
records, for this program, the subsidy costs associated with the loan
guarantees committed in 1994 and beyond (including modifications of
guarantees that resulted from obligations in any year). The subsidy
amounts are estimated on a net present value basis. The administrative
expenses are shown on a cash basis.

This program provides access to sources of private financing for
Indian families, Indian tribes and their tribally designated housing
entities (TDHEs) who otherwise could not acquire housing financing
because of the unique legal status of Indian trust land.

Indian Housing Loan Guarantee Fund Financing Account

Program and Financing (in millions of dollars)

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 3 3 5
22.00 New financing authority (gross)... 2 3
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 3 5 8
23.95 New obligations...................
24.90 Unobligated balance available, end
of year: Fund balance........... 3 5 8
----------------------------------------------------------------------------

New financing authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Spending
authority from offsetting
collections, Federal sources.... 2 3
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

88.00 Offsetting collections (cash)
from: Federal sources:
Payments from program account. -2 -3
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 1 2
90.00 Financing disbursements........... -1 -3
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4104-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders......... 37 37 37
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 37 37 37
2199 Guaranteed amount of guaranteed
loan commitments................ 37 37
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 1 6 11
2231 Disbursements of new guaranteed
loans........................... 5 5 17
--------- --------- ----------
2290 Outstanding, end of year........ 6 11 28
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 6 11
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, this
nonbudgetary account records all cash flows to and from the Government
resulting from the loan guarantees committed in 1994 and beyond
(including modifications of loan guarantees that resulted from
obligations in any year). The amounts in this account are a means of
financing and not included in the budget totals.

[[Page 538]]

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4104-0-3-604 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:

1101 Fund balances with Treasury..... 2 5
Investments in US securities:
1106 Receivables, net.............. 1 1
------------ -------------- ------------ -------------
1999 Total assets.................... 3 6
LIABILITIES:
2204 Non-Federal liabilities:
Liabilities for loan guarantees. 1 1
------------ -------------- ------------ -------------
2999 Total liabilities............... 1 1
NET POSITION:
3100 Appropriated capital.............. 2 5
------------ -------------- ------------ -------------
3999 Total net position.............. 2 5
------------ -------------- ------------ -------------
4999 Total liabilities and net position 3 6
-----------------------------------------------------------------------------------------------

COMMUNITY PLANNING AND DEVELOPMENT

Federal Funds

General and special funds:

Housing Opportunities for Persons with AIDS

For carrying out the Housing Opportunities for Persons with AIDS
program, as authorized by the AIDS Housing Opportunity Act (42 U.S.C.
12901), [$171,000,000] $204,000,000, to remain available until
expended[: Provided, That any amounts previously appropriated for such
program, and any related assets and liabilities, in the ``Annual
Contributions for Assisted Housing'' account, shall be transferred to
and merged with amounts in this account]. (Departments of Veterans
Affairs and Housing and Urban Development, and Independent Agencies
Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0308-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 237 204
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 196 204
22.22 Unobligated balance transferred
from other accounts............. 41
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 237 204
23.95 New obligations................... -237 -204
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 171 204
42.00 Transferred from other accounts... 25
--------- --------- ----------
43.00 Appropriation (total)........... 196 204
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 196 204
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 471
73.10 New obligations................... 237 204
73.20 Total outlays (gross)............. -133 -165
73.32 Obligated balance transferred from
other accounts.................. 367
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 471 510
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 4 4
86.93 Outlays from current balances..... 129 161
--------- --------- ----------
87.00 Total outlays (gross)........... 133 165
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 196 204
90.00 Outlays........................... 133 165
---------------------------------------------------------------------------

The Housing Opportunities for Persons with AIDS program was
established as a separate account in 1997. All of the balances from
prior appropriations for this program have been transferred to and
merged with this account. This program is now accounted for on an
obligation basis. The purpose of the program is to provide States and
localities with resources and incentives to devise long-term
comprehensive strategies for meeting the housing needs of persons with
HIV/AIDS and their families.

States and metropolitan areas receive 90 percent of the funds by
formula based on the incidence of HIV/AIDS in their jurisdictions. The
remaining 10 percent is awarded competitively to States, local
governments, and private nonprofit entities for projects of national
significance. Awards are also made to States and local governments for
projects in jurisdictions which do not qualify for a formula allocation.

Community Development Block Grants [Fund]

(including transfers of funds)

For grants to States and units of general local government and for
related expenses, not otherwise provided for, to carry out a community
development grants program as authorized by title I of the Housing and
Community Development Act of 1974, as amended (the ``Act'' herein) (42
U.S.C. 5301), $4,600,000,000, to remain available until September 30,
[1999,] 2000; of which $67,000,000 shall be for grants to Indian tribes
notwithstanding section 106(a)(1) of the Act[: Provided, That $2,100,000
shall be available as a grant to the Housing Assistance Council,
$1,500,000 shall be available as a grant to the National American Indian
Housing Council, and $49,000,000]; of which [$35,000,000] $32,600,000
shall be [available] for grants pursuant to section 107 of such Act[,
including up to $14,000,000 for the development and operation of a
management information system]; of which $50,000,000 shall be for
Economic Development Grants; $50,000,000 shall be for activities to
promote and implement homeownership in targeted geographic areas;
$10,000,000 shall be for the Capacity Building for Community Development
and Affordable Housing program; $10,000,000 shall be for a grant to
Habitat for Humanity International; $10,000,000 shall be for grants to
units of local government, preferably for communities designated as
Empowerment Zones or Enterprise Communities, to develop strategies for
Bridges to Work programs, which include assistance for job search,
transportation, child care and other needed supportive services to
increase job opportunities; and $60,000,000 shall be for the lead-based
paint hazard reduction program: Provided further, That not to exceed 20
percent of any grant made with funds appropriated herein (other than [a
grant made available under the preceding proviso to the Housing
Assistance Council or the National American Indian Housing Council, or]
a grant using funds under section 107(b)(3) of the Housing and Community
Development Act of 1974, as amended) shall be expended for ``Planning
and Management Development'' and ``Administration'' as defined in
regulations promulgated by the Department[: Provided further, That for
fiscal year 1997 and thereafter, section 105(a)(25) of such Act, shall
continue to be effective and the termination and conforming provisions
of section 907(b)(2) of the Cranston-Gonzalez National Affordable
Housing Act shall not be effective: Provided further, That section
916(f) of the Cranston-Gonzalez National Affordable Housing Act is
repealed].
[Of the amount provided under this heading, the Secretary of Housing
and Urban Development may use up to $60,000,000 for grants to public
housing agencies (including Indian housing authorities), nonprofit
corporations, and other appropriate entities for a supportive services
program to assist residents of public and assisted housing, former
residents of such housing receiving tenant-based assistance under
section 8 of such Act (42 U.S.C. 1437f), and other low-income families
and individuals to become self-sufficient: Provided, That the program
shall provide supportive services, principally for the benefit of public
housing residents, to the elderly and the disabled, and to families with
children where the head of household would benefit from the receipt of
supportive services and is working, seeking work, or is preparing for
work by participating in job training or educational programs: Provided
further, That the supportive serv-

[[Page 539]]

ices may include congregate services for the elderly and disabled,
service coordinators, and coordinated educational, training, and other
supportive services, including academic skills training, job search
assistance, assistance related to retaining employment, vocational and
entrepreneurship development and support programs, transportation, and
child care: Provided further, That the Secretary shall require
applications to demonstrate firm commitments of funding or services from
other sources: Provided further, That the Secretary shall select public
and Indian housing agencies to receive assistance under this head on a
competitive basis, taking into account the quality of the proposed
program (including any innovative approaches, the extent of the proposed
coordination of supportive services, the extent of commitments of
funding or services from other sources, the extent to which the proposed
program includes reasonably achievable, quantifiable goals for measuring
performance under the program over a three-year period, the extent of
success an agency has had in carrying out other comparable initiatives,
and other appropriate criteria established by the Secretary). Provided
further, That from the foregoing $60,000,000, up to $5,000,000 shall be
available for the Tenant Opportunity Program, and up to $5,000,000 shall
be available for the Moving to Work Demonstration for public housing
families.]
[Of the amount made available under this heading, notwithstanding
any other provision of law, $20,000,000 shall be available for grants to
entities managing or operating public housing developments, federally-
assisted multifamily-housing developments, or other multifamily-housing
developments for low-income families supported by non-Federal
governmental entities or similar housing developments supported by
nonprofit private sources, to reimburse local law enforcement entities
for additional police presence in and around such housing developments;
to provide or augment such security services by other entities or
employees of the recipient agency; to assist in the investigation and/or
prosecution of drug related criminal activity in and around such
developments; and to provide assistance for the development of capital
improvements at such developments directly relating to the security of
such developments: Provided, That such grants shall be made on a
competitive basis as specified in section 102 of the HUD Reform Act.]
[Of the amount made available under this heading, notwithstanding
any other provision of law, $30,000,000 shall be available for
youthbuild program activities authorized by subtitle D of title IV of
the Cranston-Gonzalez National Affordable Housing Act, as amended, and
such activities shall be an eligible activity with respect to any funds
made available under this heading.]
[Of the amount made available under this heading, notwithstanding
any other provision of law, $60,000,000 shall be available for the lead-
based paint hazard reduction program as authorized under sections 1011
and 1053 of the Residential Lead-Based Hazard Reduction Act of 1992.]
For the cost of guaranteed loans, [$31,750,000] $29,000,000, as
authorized by section 108 of the Housing and Community Development Act
of 1974: Provided, That such costs, including the cost of modifying such
loans, shall be as defined in section 502 of the Congressional Budget
Act of 1974, as amended: Provided further, That these funds are
available to subsidize total loan principal, any part of which is to be
guaranteed, not to exceed [$1,500,000,000], $1,261,000,000,
notwithstanding any aggregate limitation on outstanding obligations
guaranteed in section 108(k) of the Housing and Community Development
Act [of 1974]. In addition, for administrative expenses to carry out the
guaranteed loan program, [$675,000] $1,000,000, which shall be
transferred to and merged with the appropriation for departmental
salaries and expenses. (Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0162-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Grants............................ 4,415 5,326 4,600
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 4,415 5,326 4,600
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 487 726
22.00 New budget authority (gross)...... 4,650 4,600 4,600
22.10 Resources available from
recoveries of prior year
obligations..................... 3
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 5,140 5,326 4,600
23.95 New obligations................... -4,415 -5,326 -4,600
24.40 Unobligated balance available, end
of year: Uninvested balance..... 726
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 4,650 4,600 4,600
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 8,645 8,512 9,001
73.10 New obligations................... 4,415 5,326 4,600
73.20 Total outlays (gross)............. -4,545 -4,837 -4,641
73.45 Adjustments in unexpired accounts. -3
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 8,512 9,001 8,960
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 186 91 91
86.93 Outlays from current balances..... 4,359 4,746 4,550
--------- --------- ----------
87.00 Total outlays (gross)........... 4,545 4,837 4,641
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 4,650 4,600 4,600
90.00 Outlays........................... 4,545 4,837 4,641
---------------------------------------------------------------------------

Title I of the Housing and Community Development Act of 1974, as
amended, authorizes the Secretary to make grants to units of general
local government and States to fund local community development
programs.

Funds are allocated to Indian tribes and, on an entitlement basis,
to metropolitan cities and urban counties which receive their grants
using the higher of two objective formulas. States and small cities are
also allocated a portion of the available funds. Section 107 Grants
include funding for Insular Areas, technical assistance, Historically
Black Colleges and Universities, Community Development Work Study and
Community Outreach Partnership programs.

A revised and enhanced Economic Development Initiative (EDI) program
which will build upon the success of the existing program, is proposed
for 1998. The proposal will expand funding available for job creation
projects, expand the list of eligible recipients, and provide more
flexibility in meeting community and economic development needs. The
focus of the 1998 EDI grants will be on the need to create employment
opportunities in the wake of welfare reform.

The Homeownership Zones program will provide flexible grants to
States and Community Development Block Grant (CDBG) entitlement units of
general local government for large-scale redevelopment of abandoned
neighborhoods to create viable communities of mixed income homebuyers.

The Capacity Building for Community Development and Affordable
Housing program provides funding to the National Community Development
Initiative (NCDI) to build the capacity of community-based development
corporations and housing development organizations, and to assist such
entities to carry out community development and affordable housing
activities.

Title X of the Housing and Community Development Act of 1992 (Public
Law 102-550) authorizes a Lead-Based Paint Hazard Reduction program to
address lead-hazard reduction activities in privately owned housing.

Habitat for Humanity International would use this grant to undertake
innovative homeownership opportunities through the provision of self-
help housing, under which a homeowner would contribute a significant
amount of sweat equity toward the construction of the new dwelling.
These decent, safe and sanitary nonluxury dwellings must be made
available to eligible homeowners at prices below prevailing market
prices. Eligible activities include land acquisition (including
financing and closing costs) and infrastructure improvement (installing,
extending, constructing, rehabilitating or otherwise improving utilities
and other infrastructure).

The Bridges to Work program will provide assistance to low-income
work-ready, but unemployed or underemployed,

[[Page 540]]

city residents in finding and maintaining employment. These grants will
emphasize the link between transportation services and other supportive
services to increase access to jobs throughout a metropolitan area. The
funding will provide time-limited assistance for job search,
transportation, child care and other needed supportive services to
increase job opportunities. The program will build on the existing
demonstration program by expanding collaborative efforts by private
businesses, non-profit organizations and public agencies, including the
Federal Government. The Bridges to Work program would be available on a
competitive basis and would be targeted, but not limited to, Empowerment
Zones and Enterprise Communities.

Empowerment Zones and Enterprise Communities

(Legislative proposal, not subject to PAYGO)

For grants to Empowerment Zones and Enterprise Communities, to be
designated by the Secretary of the Department of Housing and Urban
Development, to continue efforts to stimulate economic opportunity in
America's distressed communities, $100,000,000, to remain available
until expended. (Additional authorizing legislation required.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0315-2-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 100
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 100
23.95 New obligations................... -100
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 100
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 New obligations................... 100
73.20 Total outlays (gross)............. -2
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 98
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 2
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 100
90.00 Outlays........................... 2
---------------------------------------------------------------------------

This program would provide grants to support the financing of
capital projects, including housing and economic development, in urban
Empowerment Zones and Enterprise Communities. Applicants would be
challenged to develop their own comprehensive strategic plans for
revitalization, with the input of residents and a wide array of
community partners. Grants could be used for a range of activities, at
local discretion, including: workforce preparation and job creation
efforts linked to welfare reform, repayment of debt financed by
municipal bonds; financing of projects in conjunction with the section
108 financing loan guarantee program and other economic development
projects; and support for project-based rental assistance and other
housing initiatives.

Brownfields Redevelopment

For Economic Development Grants, as authorized by section 108 of the
Housing and Community Development Act of 1974, as amended, for
Brownfields redevelopment projects, $25,000,000, to remain available
until expended.

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0314-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 25
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 25
23.95 New obligations................... -25
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 25
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 New obligations................... 25
73.20 Total outlays (gross)............. -1
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 24
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 25
90.00 Outlays........................... 1
---------------------------------------------------------------------------

This program would make competitive economic development grants in
conjunction with Section 108 loan guarantees for qualified brownfield
projects. This is the first of four annual funding requests, for a total
of $100 million, to be dedicated to the initiative between 1998 and
2001. This program will solicit applications from communities with the
best proposals for returning these sites to productive, and employment
generating uses, with an emphasis on creating substantial numbers of
jobs for lower income people in physically and economically distressed
neighborhoods.

Grants would be made in accordance with section 108(q) selection
criteria and such other criteria deemed appropriate for brownfield
projects, including the extent to which an applicant is currrently
operating a brownfields program and is working with appropriate
environmental regulatory agencies. Priority would be given to those
projects that are located in designated Empowerment Zones or Enterprise
Communities.

HOME Investment Partnerships Program

For the HOME investment partnerships program, as authorized under
title II of the Cranston-Gonzalez National Affordable Housing Act
(Public Law 101-625), as amended, [$1,400,000,000] $1,309,000,000, to
remain available until expended: Provided, [$21,000,000 shall be
available for grants to Indian tribes: Provided further,] That up to
[0.5 percent, but not less than] $7,000,000 shall be available for the
development and operation of integrated community development management
information systems[; Provided further, That $15,000,000 shall be
available for Housing Counseling under section 106 of the Housing and
Urban Development Act of 1968]. (Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies Appropriations
Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0205-0-1-999 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 1,367 1,582 1,309
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 148 182
22.00 New budget authority (gross)...... 1,400 1,400 1,309
22.10 Resources available from
recoveries of prior year
obligations..................... 1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,549 1,582 1,309
23.95 New obligations................... -1,367 -1,582 -1,309

[[Page 541]]

24.40 Unobligated balance available, end
of year: Uninvested balance..... 182
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 1,400 1,400 1,309
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 3,189 3,349 3,486
73.10 New obligations................... 1,367 1,582 1,309
73.20 Total outlays (gross)............. -1,206 -1,445 -1,440
73.45 Adjustments in unexpired accounts. -1
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 3,349 3,486 3,355
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 28 28 26
86.93 Outlays from current balances..... 1,178 1,417 1,414
--------- --------- ----------
87.00 Total outlays (gross)........... 1,206 1,445 1,440
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1,400 1,400 1,309
90.00 Outlays........................... 1,206 1,445 1,440
---------------------------------------------------------------------------

The HOME Investment Partnership program is authorized by the
National Affordable Housing Act (P.L. 101-625). This program provides
assistance to States and units of local government, through formula
allocation, for the purpose of expanding the supply and affordability of
housing. Eligible activities include acquisition, rehabilitation, and
new construction of housing and tenant-based rental assistance.

The 1998 proposal includes funds to continue to develop, implement
and refine integrated community development management information
systems which are critical to establishing a national database of local
needs and program performance, as well as to provide localities, States
and community members with software to plan and track performance.
Funding for technical assistance is also included.

Urban Development Action Grants

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0170-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 163 136 76
73.20 Total outlays (gross)............. -27 -60 -45
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 136 76 31
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 27 60 45
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 27 60 45
---------------------------------------------------------------------------

Title I of the Housing and Community Development Act of 1974, as
amended, authorized grants to distressed cities and distressed urban
counties to fund economic development projects. The program was
terminated in 1990.

Capacity Building for Community Development and Affordable Housing

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0222-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 19 13 3
73.20 Total outlays (gross)............. -5 -10 -3
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 13 3
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 5 10 3
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 5 10 3
---------------------------------------------------------------------------

As authorized by section 4 of the HUD Demonstration Act of 1993,
this program provides funding to the National Community Development
Initiative to build the capacity of community-based development
corporations and housing development organizations, and to assist such
corporations and organizations to carry out community development and
affordable housing activities. Funding for this program was provided
under the Annual Contributions for Assisted Housing account in 1996, and
is requested under the Community Development Block Grant account in
1998.

Emergency Shelter Grants Program

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0181-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 36 6
73.20 Total outlays (gross)............. -30 -6
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 6
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 30 6
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 30 6
---------------------------------------------------------------------------

Title IV, subtitle B, of the Stewart B. McKinney Homeless Assistance
Act (Public Law 100-77), authorizes the Secretary to make Emergency
Shelter Grants to States, units of local government, and nonprofit
organizations to provide emergency shelter and other support for the
homeless. Since fiscal year 1995, this assistance has been funded under
the Homeless Assistance Grants account.

Supportive Housing Program

Of the funds made available under this heading in Public Law 102-389
and prior laws for the Supportive Housing Demonstration Program, as
authorized by the Stewart B. McKinney Homeless Assistance Act,
$6,000,000 of funds recaptured during fiscal year 1998 shall be
rescinded.

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0188-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 44 31
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 66 31
22.00 New budget authority (gross)...... -6
22.10 Resources available from
recoveries of prior year
obligations..................... 9 6
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 75 31
23.95 New obligations................... -44 -31
24.40 Unobligated balance available, end
of year: Uninvested balance..... 31
----------------------------------------------------------------------------

[[Page 542]]

New budget authority (gross), detail:
40.36 Unobligated balance rescinded..... -6
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 575 462 336
73.10 New obligations................... 44 31
73.20 Total outlays (gross)............. -148 -157 -144
73.45 Adjustments in unexpired accounts. -9 -6
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 462 336 186
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 148 157 144
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -6
90.00 Outlays........................... 148 157 144
---------------------------------------------------------------------------

Title IV, subtitle C, of the Stewart B. McKinney Homeless Assistance
Act authorizes assistance to promote the development of supportive
housing and services, especially for deinstitutionalized homeless
individuals, homeless families with children, homeless individuals with
mental disabilities, and other persons including those with AIDS. Such
assistance is available for the acquisition, rehabilitation,
construction, or leasing of structures to be used for homeless persons
as well as to pay for operating costs and supportive services.

Since fiscal year 1995, this type of assistance has been funded
under the Homeless Assistance Grants account.

This proposal would rescind funding, recaptured in 1998, for
approved projects in prior years which were either not undertaken or
utilized less funding than originally obligated.

Supplemental Assistance for Facilities To Assist the Homeless

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0187-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 1 1
22.10 Resources available from
recoveries of prior year
obligations..................... 1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1 1 1
23.95 New obligations...................
24.40 Unobligated balance available, end
of year: Uninvested balance..... 1 1 1
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 9 3
73.10 New obligations...................
73.20 Total outlays (gross)............. -5 -3
73.45 Adjustments in unexpired accounts. -1
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 3
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 5 3
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 5 3
---------------------------------------------------------------------------

Title IV, subtitle D, of the Stewart B. McKinney Homeless Assistance
Act, authorized the Supplemental Assistance for Facilities To Assist the
Homeless program (SAFAH) to provide comprehensive assistance for
particularly innovative programs or alternative methods of meeting the
immediate and long-term needs of the homeless. The authority for the
SAFAH program was terminated by section 1403 of the Housing and
Community Development Act of 1992.

Shelter Plus Care

Of the funds made available under this heading in Public Law 102-389
and prior laws for the Shelter Plus Care program, as authorized by the
Stewart B. McKinney Homeless Assistance Act, $4,000,000 of funds
recaptured during fiscal year 1998 shall be rescinded.

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0204-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 9 16
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 24 16
22.00 New budget authority (gross)...... -4
22.10 Resources available from
recoveries of prior year
obligations..................... 1 4
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 25 16
23.95 New obligations................... -9 -16
24.40 Unobligated balance available, end
of year: Uninvested balance..... 16
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.36 Unobligated balance rescinded..... -4
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 454 419 385
73.10 New obligations................... 9 16
73.20 Total outlays (gross)............. -43 -50 -49
73.45 Adjustments in unexpired accounts. -1 -4
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 419 385 332
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority
86.93 Outlays from current balances..... 43 50 49
--------- --------- ----------
87.00 Total outlays (gross)........... 43 50 49
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -4
90.00 Outlays........................... 43 50 49
---------------------------------------------------------------------------

Title IV, subtitle F, of the Stewart B. McKinney Homeless Assistance
Act, authorizes the Secretary to provide rental assistance to persons
with disabilities. Supportive services at least equal in value to the
aggregate rental assistance must also be provided by grant recipients,
using other Federal, State, local and private resources. Eligible
recipients include States, units of general local government and Indian
tribes.

Since fiscal year 1995, this type of assistance has been funded
under the Homeless Assistance Grants account.

This proposal would rescind funding, recaptured in 1998, for
approved projects in prior years which were either not undertaken or
utilized less funding than was originally obligated.

Innovative Homeless Initiatives Demonstration Program

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0221-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 79 58 39
73.20 Total outlays (gross)............. -20 -19 -17

[[Page 543]]

74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 58 39 22
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 20 19 17
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 20 19 17
---------------------------------------------------------------------------

Section 2 of the HUD Demonstration Act of 1993 authorized assistance
for projects intended to provide a continuum of care for homeless
persons and for innovative programs to assist homeless persons. Eligible
recipients included States, units of local government, Indian tribes,
and nonprofit organizations. Authorization for this program expired at
the end of fiscal year 1994.

Homeless Assistance [Funds] Grants

For grants to States, units of general local government, nonprofit
organizations, or public housing authorities, and for related expenses
not otherwise provided for, necessary for carrying out a performance-
based homeless assistance program, $823,000,000, to remain available
until expended: Provided, That up to one percent of such funds shall be
available to the Secretary for technical assistance. (Additional
authorizing legislation required.)
[For the emergency shelter grants program (as authorized under
subtitle B of title IV of the Stewart B. McKinney Homeless Assistance
Act (Public Law 100-77), as amended); the supportive housing program (as
authorized under subtitle C of title IV of such Act); the section 8
moderate rehabilitation single room occupancy program (as authorized
under the United States Housing Act of 1937, as amended) to assist
homeless individuals pursuant to section 441 of the Stewart B. McKinney
Homeless Assistance Act; and the shelter plus care program (as
authorized under subtitle F of title IV of such Act), $823,000,000, to
remain available until expended.] (Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies Appropriations
Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0192-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 785 1,711 823
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 849 888
22.00 New budget authority (gross)...... 823 823 823
22.10 Resources available from
recoveries of prior year
obligations..................... 1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,673 1,711 823
23.95 New obligations................... -785 -1,711 -823
24.40 Unobligated balance available, end
of year: Uninvested balance..... 888
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 823 823 823
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 260 857 2,283
73.10 New obligations................... 785 1,711 823
73.20 Total outlays (gross)............. -186 -285 -474
73.45 Adjustments in unexpired accounts. -1
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 857 2,283 2,632
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 41 41 41
86.93 Outlays from current balances..... 145 244 433
--------- --------- ----------
87.00 Total outlays (gross)........... 186 285 474
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 823 823 823
90.00 Outlays........................... 186 285 474
---------------------------------------------------------------------------

The Homeless Assistance Grants program consolidates the activities
of HUD's six McKinney homeless assistance programs--Shelter Plus Care,
Supportive Housing, Emergency Shelter Grants, Section 8 Single Room
Occupancy, Rural Homeless Grants and Safe Havens--as well as those of
the Innovative Homeless Initiatives Demonstration program. This
consolidation would enable localities to continue to shape and implement
comprehensive, flexible, coordinated ``continuum of care'' approaches to
solving rather than institutionalizing homelessness. In fact, over the
last three years, many communities have made great strides in developing
holistic continuum of care approaches to solving homelessness. A
community-based process would be required as part of the application
process. Communities will be required to include in their applications
performance measures that contain specific goals that would accrue from
the community's efforts, and will be required to demonstrate tangible
results on an annual basis. Approved funding would be available for a
wide range of activities to assist homeless persons and prevent future
homelessness.

Funding is also requested for technical assistance to provide needed
assistance to grantees in resolving problems that hinder successful
project completion and implementation.

Youthbuild Program

For the HOPE for Youth: Youthbuild program, authorized by subtitle D
of title IV of the Cranston-Gonzalez National Affordable Housing Act, as
amended, $30,000,000, to remain available until expended.

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0219-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 3 30
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 2 3
22.00 New budget authority (gross)...... 30
22.10 Resources available from
recoveries of prior year
obligations..................... 1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 3 3 30
23.95 New obligations................... -3 -30
24.40 Unobligated balance available, end
of year: Uninvested balance..... 3
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 30
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 85 43 21
73.10 New obligations................... 3 30
73.20 Total outlays (gross)............. -41 -25 -15
73.45 Adjustments in unexpired accounts. -1
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 43 21 36
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 41 25 15
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 30
90.00 Outlays........................... 41 25 15
---------------------------------------------------------------------------

This program provides resources to educate, train, and provide
stipends for economically disadvantaged young adults to construct and
rehabilitate housing for low-income and homeless persons. The program
has expanded the supply of affordable housing and, at the same time, has
enabled high school dropouts to obtain the education and employment
skills necessary to achieve self-sufficiency.

[[Page 544]]

For fiscal years 1996 and 1997, funding for the Youthbuild program
was included in the Community Development Block Grants account.

National Cities in Schools Community Development Program

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0220-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 2
73.20 Total outlays (gross)............. -2
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 2
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 2
---------------------------------------------------------------------------

This program provides grants for community-wide programs designed to
assist at-risk youth and their families. Funding for this program was
provided under the Annual Contributions for Assisted Housing account in
fiscal year 1996.

Public enterprise funds:

Revolving Fund (Liquidating Programs)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.03 Loan servicing and other expenses. 8 7 7
00.04 Maintenance of acquired security
and collateral.................. 7 6
00.05 Administrative expenses........... 1 1 1
--------- --------- ----------
10.00 Total obligations............... 9 15 14
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 102 97 87
22.00 New budget authority (gross)...... 74 65 60
22.10 Resources available from
recoveries of prior year
obligations..................... 1
22.40 Capital transfer to general fund.. -70 -60 -60
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 107 102 87
23.95 New obligations................... -9 -15 -14
24.90 Unobligated balance available, end
of year: Fund balance........... 97 87 73
----------------------------------------------------------------------------

New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 74 65 60
----------------------------------------------------------------------------

Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Fund balance. 46 27 7
73.10 New obligations................... 9 15 14
73.20 Total outlays (gross)............. -28 -35 -21
73.45 Adjustments in unexpired accounts. -1
74.90 Unpaid obligations, end of year:
Obligated balance: Fund balance. 27 7
----------------------------------------------------------------------------

Outlays (gross), detail:
86.98 Outlays from permanent balances... 28 35 21
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -74 -65 -60
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -46 -30 -39
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4015-0-3-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 388 328 282
1251 Repayments: Repayments and
prepayments..................... -51 -45 -40
1263 Write-offs for default: Direct
loans........................... -9 -1
--------- --------- ----------
1290 Outstanding, end of year........ 328 282 242
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4015-0-3-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 4 3 2
2251 Repayments and prepayments........ -1 -1 -1
--------- --------- ----------
2290 Outstanding, end of year........ 3 2 1
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 3 2 1
---------------------------------------------------------------------------

The Revolving fund (liquidating programs) was established by the
Independent Offices Appropriation Act of 1955 for the efficient
liquidation of assets acquired under a number of housing and urban
development programs.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4015-0-3-451 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 19 31 20 20
0102 Expense........................... -12 -18 -15 -12
------------ -------------- ------------ -------------
0109 Net income or loss (-)............ 7 13 5 8
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4015-0-3-451 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 149 125 135 130
1206 Non-Federal assets: Receivables,
net............................. 3 4 3 2
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 391 331 301 254
1602 Interest receivable............. 21 18 20 18
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -36 -25 -39 -30
1604 Direct loans and interest
receivable, net............... 376 324 282 242
1606 Foreclosed property............. 1 1 1
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 377 325 283 242
------------ -------------- ------------ -------------
1999 Total assets.................... 529 454 421 374
LIABILITIES:
Non-Federal liabilities:

2201 Accounts payable................ 1
2207 Other........................... 13 9 8 7
------------ -------------- ------------ -------------
2999 Total liabilities............... 14 9 8 7
NET POSITION:
3100 Appropriated capital.............. 28 28 28
3200 Invested capital.................. 301 301 301
3300 Cumulative results of operations.. 514 116 84 38
------------ -------------- ------------ -------------
3999 Total net position.............. 514 445 413 367
------------ -------------- ------------ -------------
4999 Total liabilities and net position 528 454 421 374
-----------------------------------------------------------------------------------------------

[[Page 545]]

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4015-0-3-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
25.2 Other services.................... 5 10 10
32.0 Land and structures............... 4 5 4
--------- --------- ----------
99.9 Total obligations............... 9 15 14
---------------------------------------------------------------------------

Credit accounts:

Community Development Loan Guarantees Program Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.02 Guaranteed loan subsidy........... 9 32 29
00.09 Administrative expenses........... 1 1 1
--------- --------- ----------
10.00 Total obligations (object class
33.0)......................... 10 33 30
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 33 33 30
22.30 Unobligated balance expiring...... -23
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 10 33 30
23.95 New obligations................... -10 -33 -30
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 33 33 30
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 9 19
73.10 New obligations................... 10 33 30
73.20 Total outlays (gross)............. -1 -23 -35
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 9 19 14
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 1 17 16
86.93 Outlays from current balances..... 6 19
--------- --------- ----------
87.00 Total outlays (gross)........... 1 23 35
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 33 33 30
90.00 Outlays........................... 1 23 35
---------------------------------------------------------------------------

Guaranteed Loans.--The Community Development Block Grant program
includes a guaranteed loan provision (Section 108). A commitment level
of $1.3 billion is proposed for the Community Development Loan
Guarantees (Section 108) program for 1998. The credit subsidy/
administrative cost estimate for the guaranteed loan program is $30
million in FY 1998.

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0198-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Guaranteed loan levels supportable by subsidy
budget authority:
2150 Loan guarantee levels............. 1,500 1,380 1,261
--------- --------- ----------
2159 Total loan guarantee levels..... 1,500 1,380 1,261
Guaranteed loan subsidy (in percent):
2320 Subsidy rate...................... 2.10 2.30 2.30
--------- --------- ----------
2329 Weighted average subsidy rate... 2.10 2.30 2.30
Guaranteed loan subsidy budget authority:
2330 Subsidy budget authority.......... 32 32 29
--------- --------- ----------
2339 Total subsidy budget authority.. 32 32 29
Guaranteed loan subsidy outlays:
2340 Subsidy outlays................... 22 23
--------- --------- ----------
2349 Total subsidy outlays........... 22 23
----------------------------------------------------------------------------

Administrative expense data:
3510 Budget authority.................. 1 1 1
3590 Outlays........................... 1 1 1
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, this account
records, for this program, the subsidy costs associated with the loan
guarantees committed in 1992 and beyond (including modifications of
direct loans or loan guarantees that resulted from obligations or
commitments in any year), as well as administrative expenses of this
program. The subsidy amounts are estimated on a present value basis; the
administrative expenses are estimated on a cash basis.

Community Development Loan Guarantees Financing Account

Program and Financing (in millions of dollars)

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 23
22.00 New financing authority (gross)... 23 37
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 23 60
24.90 Unobligated balance available, end
of year: Fund balance........... 23 60
----------------------------------------------------------------------------

New financing authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 23 37
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
88.00 Federal sources............... -22 -34
88.25 Interest on uninvested funds.. -1 -3
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -23 -37
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............
90.00 Financing disbursements........... -23 -37
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4096-0-3-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders......... 1,500 1,380 1,261
2112 Uncommitted loan guarantee
limitation...................... -1,066
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 434 1,380 1,261
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 430 750 1,425
2231 Disbursements of new guaranteed
loans........................... 360 750 1,150
2251 Repayments and prepayments........ -40 -75 -135
--------- --------- ----------
2290 Outstanding, end of year........ 750 1,425 2,440
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 750 1,425 2,440
---------------------------------------------------------------------------

Guaranteed loans.--The Community Development Loan Guarantees program
provides a mechanism for Federal guarantees of private loans. There is
an accompanying liquidating account which shows activity for Federal
Financing Bank (FFB) direct loan activity, obligated prior to July 1,
1986. Also following is a status of privately financed guaranteed loan
commitments made prior to 1992.

[[Page 546]]

tees that resulted from commitments in any year). The amounts in this
account are a means of financing and are not included in the budget
totals.

Community Development Loan Guarantees Liquidating Account

Program and Financing (in millions of dollars)

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 50 4 4
22.60 Redemption of debt................ -50 -4 -4
--------- --------- ----------
23.90 Total budgetary resources
available for obligation......
----------------------------------------------------------------------------

New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 50 4 4
----------------------------------------------------------------------------

Change in unpaid obligations:
72.47 Unpaid obligations, start of year:
Obligated balance: Authority to
borrow.......................... 153 147 147
73.20 Total outlays (gross)............. -6
74.47 Unpaid obligations, end of year:
Obligated balance: Authority to
borrow.......................... 147 147 147
----------------------------------------------------------------------------

Outlays (gross), detail:
86.98 Outlays from permanent balances... 6
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -50 -4 -4
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -44 -4 -4
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4097-0-3-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 89 39 35
1251 Repayments: Repayments and
prepayments..................... -50 -4 -4
--------- --------- ----------
1290 Outstanding, end of year........ 39 35 31
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4097-0-3-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 246 243 203
2231 Disbursements of new guaranteed
loans........................... 44 15 10
2251 Repayments and prepayments........ -47 -55 -33
--------- --------- ----------
2290 Outstanding, end of year........ 243 203 180
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 243 203 180
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, this account
records all cash flows to and from the Government resulting from Federal
Financing Bank (FFB) direct loans for which loan guarantees were
committed prior to 1992. This account is shown on a cash basis.

Guaranteed loans.--Guaranteed loan assistance under the Community
Development Loan Guarantees program is provided to eligible communities
to finance economic development activities, housing rehabilitation,
public facilities, acquisition of real property, rehabilitation of
publicly owned real property, and certain related expenses. In the past,
the FFB financed these guaranteed loans. The Consolidated Omnibus Budget
Reconciliation Act of 1985 requires private financing of all loan
guarantees committed after July 1, 1986. FFB will continue disbursing
loans for commitments approved prior to July 1, 1986. The activity shown
in the above account reflects privately financed guaranteed loans for
which commitments were made prior to 1992.

HOUSING PROGRAMS

Federal Funds

General and special funds:

[Development of Additional New Subsidized Housing] Housing for Special
Populations

For assistance for the purchase, construction, acquisition, or
development of additional public and subsidized housing units for low
income families under the United States Housing Act of 1937, as amended,
[(``the Act'' herein)] (42 U.S.C. 1437), not otherwise provided for,
[$1,039,000,000] $474,000,000, to remain available until expended:
Provided, That of the total amount provided under this head,
[$645,000,000] $300,000,000 shall be for capital advances, including
amendments to capital advance contracts, for housing for the elderly, as
authorized by section 202 of the Housing Act of 1959, as amended, and
for project rental assistance, and amendments to contracts for project
rental assistance, for supportive housing for the elderly under section
202(c)(2) of the Housing Act of 1959; and [$194,000,000] $174,000,000
shall be for capital advances, including amendments to capital advance
contracts, for supportive housing for persons with disabilities, as
authorized by section 811 of the Cranston-Gonzalez National Affordable
Housing Act, and for project rental assistance, and amendments to
contracts for project rental assistance, for supportive housing for
persons with disabilities as authorized by section 811 of [the Cranston-
Gonzalez National Affordable Housing] such Act: Provided further, That
the Secretary may designate up to 25 percent of the amounts earmarked
under this paragraph for section 811 of [the Cranston-Gonzalez National
Affordable Housing] such Act for tenant-based assistance, as authorized
under that section, including such authority as may be waived under the
next proviso, which assistance is five years in duration: Provided
further, That the Secretary may waive any provision of section 202 of
the Housing Act of 1959 and section 811 of the National Affordable
Housing Act (including the provisions governing the terms and conditions
of project rental assistance and tenant-based assistance) that the
Secretary determines is not necessary to achieve the objectives of these
programs, or that otherwise impedes the ability to develop, operate or
administer projects assisted under these programs, and may make
provision for alternative conditions or terms where appropriate:
Provided further, That [of the total amount provided under this head
$200,000,000, shall be for the development or acquisition cost of public
housing for Indian families, including amounts for housing under the
mutual help homeownership opportunity program under section 202 of the
Act (42 U.S.C. 1437bb)] all obligated and unobligated balances remaining
in either the Annual Contributions for Assisted Housing account or the
Development of Additional New Subsidized Housing account for capital
advances, including amendments to capital advances, for housing for the
elderly, as authorized by section 202 of the Housing Act of 1959, as
amended, and for project rental assistance, and amendments to contracts
for project rental assistance, for supportive housing for the elderly,
under section 202(c)(2) of such Act, shall be transferred to and merged
with the amounts for those purposes under this head; and, all obligated
and unobligated balances remaining in either the Annual Contributions
for Assisted Housing account or the Development of Additional New
Subsidized Housing account for capital advances, including amendments to
capital advances, for supportive housing for persons with disabilities,
as authorized by section 811 of the Cranston-Gonzales National
Affordable Housing Act, and for project rental assistance, and
amendments to contracts for project rental assistance, for supportive
housing for persons with disabilities, as authorized under section 811
of such Act, shall be transferred to and merged with the amounts for
those purposes under this head. (Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies Appropriations
Act, 1997.)

[[Page 547]]

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0310-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 1,039 474
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 1,039 474
23.95 New obligations................... -1,039 -474
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 1,039 474
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 1,039
73.10 New obligations................... 1,039 474
73.20 Total outlays (gross)............. -15
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 1,039 1,498
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 15
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1,039 474
90.00 Outlays........................... 15
---------------------------------------------------------------------------

This account consolidates the new activity under the Section 202
Housing for the Elderly Program and the Section 811 Housing for the
Disabled Program. Program activity prior to 1997 is reflected in the
Annual Contributions for Assisted Housing account. Renewal of prior year
contracts is reflected in the Prevention of Resident Displacement
account.

A program level of $300 million for Housing for the Elderly grants
and rental assistance is proposed for 1998. This is estimated to support
the production of 3,865 additional units.

A program level of $174 million is proposed for disabled housing,
including $43.5 million for 1,630 5-year vouchers and $130.5 million for
grant and rental assistance to support 1,488 additional units.

During fiscal year 1996 funding for supportive housing for the
elderly and disabled was provided under the Annual Contributions for
Assisted Housing account. For 1997, funding was provided under the
Development of Additional New Subsidized Housing, and in 1998 funding is
proposed under the new Housing for Special Populations account. The
table below shows the total budget authority and outlays associated with
all three accounts. Language is being proposed in this budget to
transfer the balances from Annual Contributions and Development of
Additional New Housing accounts to the Housing for Special Populations
account.

Proposed Transfer of Balances

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Annual Contributions for Assisted
Housing:
Budget Authority.................. 1,013 NA NA
Outlays........................... 757 853 911
Development of Additional New
Subsidized Housing:
Budget Authority.................. NA 839 NA
Outlays........................... NA NA NA
Housing for Special Populations:
Budget Authority.................. NA NA 474
Outlays........................... NA NA NA
------------------------------------
Total:
Budget Authority.................. 1,013 839 474
Outlays........................... 757 853 911
====================================

Other Assisted Housing Programs

Rental Housing Assistance

(Rescissions)

The limitation otherwise applicable to the maximum payments that may
be required in any fiscal year by all contracts entered into under
section 236 of the National Housing Act (12 U.S.C. 1715z-1) is reduced
in fiscal year 1998 by not more than $7,350,000 in uncommitted balances
of authorizations provided for this purpose in appropriation Acts:
Provided, That up to $125,000,000 of recaptured budget authority shall
be canceled.

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Rent supplement................... 9 39 37
00.02 Homeownership and rental housing
assistance (Sections 235 and
236)............................ 16 68 64
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 25 107 101
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

21.40 Uninvested balance.............. 12 15
21.49 Contract authority (available).. 1,032 978 959
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 1,044 993 959
22.00 New budget authority (gross)...... -125
22.10 Resources available from
recoveries of prior year
obligations..................... 340 111 278
22.75 Balance of contract authority
withdrawn....................... -365 -38 -33
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,019 1,066 1,079
23.95 New obligations................... -25 -107 -101
Unobligated balance available, end of year:

24.40 Uninvested balance.............. 15
24.49 Contract authority (available).. 978 959 978
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 993 959 978
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.36 Unobligated balance canceled.... -125
Permanent:

60.05 Appropriation (indefinite)...... 709 727 678
60.49 Portion applied to liquidate
contract authority............ -709 -727 -678
--------- --------- ----------
63.00 Appropriation (total).........
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... -125
----------------------------------------------------------------------------

Change in unpaid obligations:
Unpaid obligations, start of year:

Obligated balance:
72.40 Administrative commitment
(reserved).................. 104 140 140
72.49 Contract authority............ 22,774 21,687 20,956
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 22,878 21,827 21,096
73.10 New obligations................... 25 107 101
73.20 Total outlays (gross)............. -736 -727 -678
73.45 Adjustments in unexpired accounts. -340 -111 -278
Unpaid obligations, end of year:

Obligated balance:
74.40 Administrative commitment
reserved.................... 140 140 140
74.49 Contract authority............ 21,687 20,956 20,101
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 21,827 21,096 20,241
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 736 727 678
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -125
90.00 Outlays........................... 736 727 678
---------------------------------------------------------------------------

Status of Contract Authority (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0206-0-1-999 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Balance, start of year:
0100 Balance, start of year............ 1,032 978 959
0100 Balance, start of year............ 22,774 21,687 20,956
Contract authority:
0200 Contract authority................ -125

[[Page 548]]

0400 Appropriation to liquidate
contract authority.............. -709 -727 -678
0600 Balance of contract authority
withdrawn....................... -365 -38 -33
Balance, end of year:
0700 Balance, end of year.............. 978 959 978
0700 Balance, end of year.............. 21,687 20,956 20,101
---------------------------------------------------------------------------

OTHER ASSISTED HOUSING

Summary of Administrative Commitments

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Program by activities...............
Assistance contracts:
Rent supplement................. 9 39 37
Homeownership and rental housing
assistance (sections 235 and
236).......................... 16 68 64
Administrative commitments, start
of year......................... 16 16 16
Administrative commitments, end of
year............................ -16 -16 -16
------------------------------------
Total obligations............. 25 107 101
====================================

The Other Assisted Housing Account contains the programs listed
below:

Rent supplement.--Rent supplement assistance payments will continue
to be made on behalf of qualified low-income tenants in approximately
20,000 units which have not converted to section 8.

Section 235.--The Housing and Urban-Rural Recovery Act of 1983
(Public Law 98-181) authorized a restructured section 235 (Homeownership
Assistance) program based on a 10-year interest reduction subsidy. A
total of $150 million of budget authority was provided in the Second
Supplemental Appropriations Act of 1984 (Public Law 98-396) to fund the
program. Recaptures of budget authority from terminations must be
transferred into the Homeownership Assistance Fund account established
pursuant to Public Law 98-181.

Section 236.--The Housing and Urban Development Act of 1968, as
amended, authorizes the section 236 Rental Housing Assistance Program
which subsidizes the monthly mortgage payment that an owner of a rental
or cooperative project is required to make. This interest subsidy
reduces rents for lower income tenants. During 1998, as a result of
foreclosures from mortgage defaults or regulatory violations, the
Department will rescind up to $125 million.

During 1998, as a result of foreclosures from mortgage defaults or
regulatory violations, the Department will rescind up to $125 million.

The table below reflects the consolidated outlay total for both the
Annual Contributions for Assisted Housing account and the Other Assisted
Housing account, for fiscal years 1996, 1997, and 1998.

SUMMARY OF OUTLAYS

[In millions of dollars]

(Annual Contributions for Assisted Housing, Housing Certificate Fund,
and Other Assisted Housing) \1\

1996 actual 1997 est. 1998 est.
Subsidized housing programs, total.. 21,064 22,308 22,494
Low-income housing assistance (sec.
8).................................. 15,779 17,283 17,937
Public housing...................... 4,548 4,296 3,867
Rent supplement..................... 57 58 60
Homeownership assistance (sec. 235). 31 31
Rental housing assistance (sec. 236) 663 623 582
College housing grants.............. 17 17 17
\1\ Includes outlays for contract renewals.

Homeownership and Opportunity for People Everywhere Grants (HOPE Grants)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0196-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Hope I............................ 3
00.02 Hope II........................... 31
00.03 Hope III.......................... 3 2
00.04 Elderly independence.............. 1 2
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 4 38
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

Uninvested balance:
21.40 Uncommitted................... 36 34
21.40 Administratively committed.... 5 4
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 41 38
22.10 Resources available from
recoveries of prior year
obligations..................... 1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 42 38
23.95 New obligations................... -4 -38
Unobligated balance available, end of year:

Uninvested balance:
24.40 Uncommitted................... 34
24.40 Administratively committed.... 4
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 38
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 244 184 136
73.10 New obligations................... 4 38
73.20 Total outlays (gross)............. -63 -86 -59
73.45 Adjustments in unexpired accounts. -1
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 184 136 77
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 63 86 59
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 63 86 59
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Enacted/requested:
Budget Authority..................
Outlays........................... 63 86 59
Supplemental proposal:
Budget Authority.................. -30
Outlays........................... -6 -8
------------------------------------
Total:
Budget Authority.................. -30
Outlays........................... 63 80 51
====================================

The Homeownership and Opportunity for People Everywhere Program
provided affordable homeownership opportunities for low-income families.
Units were converted to homeownership from public and Indian housing
properties in HOPE 1, from FHA-insured and Government-held multifamily
properties in HOPE 2 and from Government-owned or -held single family
properties in HOPE 3. HOPE Grants were used for property acquisition,
rehabilitation, mortgage subsidies, security measures, and technical
assistance. In addition, grants have been devoted to counseling and
training of residents, and other activities intended to help them become
economically self-sufficient homeowners. No funding is being requested
for fiscal year 1998. Approximately $30 million of HOPE unobligated
balances are proposed for transfer to the Drug Elimination Grants
program in 1997. This schedule reflects the liquidation of prior year
balances.

[[Page 549]]

Congregate Services

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0178-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 1
----------------------------------------------------------------------------

Budgetary resources available for obligation:
23.95 New obligations................... -1
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 38 30 23
73.10 New obligations................... 1
73.20 Total outlays (gross)............. -8 -7 -7
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 30 23 16
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 8 7 7
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 8 7 7
---------------------------------------------------------------------------

Under the Congregate Services program, HUD contracted directly with
local public housing agencies and section 202 housing for the elderly or
disabled sponsors to supply support services, including meals and other
services. No funding is being requested for this program in fiscal year
1998. This schedule reflects the liquidation of prior year balances.

Housing Counseling Assistance

For assistance, not otherwise provided, for providing counseling and
advice to tenants and homeowners, both current and prospective, with
respect to property maintenance, financial management, and such other
matters as may be appropriate to assist them in improving their housing
conditions and meeting the responsibilities of tenancy or homeownership,
as authorized by section 106 of the Housing and Urban Development Act of
1968, as amended, $23,000,000.

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0156-0-1-506 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 23
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 23
23.95 New obligations................... -23
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 23
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 17 6 3
73.10 New obligations................... 23
73.20 Total outlays (gross)............. -10 -3 -3
73.40 Adjustments in expired accounts... -1
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 6 3 23
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 10 3 3
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 23
90.00 Outlays........................... 10 3 3
---------------------------------------------------------------------------

The Housing Counseling Assistance program provides comprehensive
housing counseling services to eligible homeowners and tenants,
including pre-purchase, default and renter counseling.

Section 8 Moderate Rehabilitation

single room occupancy

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0195-0-1-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 85 106
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 191 106
23.95 New obligations................... -85 -106
24.40 Unobligated balance available, end
of year: Uninvested balance..... 106
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 319 382 433
73.10 New obligations................... 85 106
73.20 Total outlays (gross)............. -21 -55 -51
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 382 433 382
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 21 55 51
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 21 55 51
---------------------------------------------------------------------------

Section 8 assistance for single room occupancy dwellings is
authorized by Title IV, subtitle E, of the Stewart B. McKinney Homeless
Assistance Act, as amended by the Housing and Community Development Act
of 1992. Since fiscal year 1995, these activities have been funded in
the Homeless Assistance Grants account.

Manufactured Home Inspection and Monitoring

Unavailable Collections (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-5271-0-2-376 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Balance, start of year:
01.99 Balance, start of year............
Receipts:
02.01 Manufactured home inspection and
monitoring...................... 13 14 16
Appropriation:
05.01 Manufactured home inspection and
monitoring...................... -13 -14 -16
07.99 Total balance, end of year........
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Transfer to salaries and expenses. 1 1 1
00.02 Other program costs............... 11 13 14
--------- --------- ----------
10.00 Total obligations (object class
25.2)......................... 12 14 15
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 7 9 10
22.00 New budget authority (gross)...... 13 14 16
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 20 23 26
23.95 New obligations................... -12 -14 -15
24.40 Unobligated balance available, end
of year: Uninvested balance..... 9 10 10
----------------------------------------------------------------------------

New budget authority (gross), detail:
60.25 Appropriation (special fund,
indefinite)..................... 13 14 16
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 2 2 3
73.10 New obligations................... 12 14 15

[[Page 550]]

73.20 Total outlays (gross)............. -12 -13 -15
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 2 3 3
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 12 13 15
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 13 14 16
90.00 Outlays........................... 12 13 15
---------------------------------------------------------------------------

Section 620 of the National Manufactured Housing Construction and
Safety Standards Act of 1974, as amended, authorizes enforcement of
appropriate construction standards for the construction, design and
performance of manufactured homes to assure their quality, durability,
and safety. All manufactured homes produced since the standards took
effect on June 15, 1976 must comply with Federal construction and safety
standards. The States are actively encouraged to participate in the
program under compliance plans approved by HUD.

A fee is charged to the manufacturers for each manufactured home
produced to cover the costs of the monitoring and enforcement activities
by HUD and its contract agents. Fees are deposited in a special fund
administered by the Department, and a portion of the fee receipts are
transferred to the salaries and expenses account to defray the direct
administrative expenses of the program.

Interstate Land Sales

Unavailable Collections (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-5270-0-2-376 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Balance, start of year:
01.99 Balance, start of year............
Receipts:
02.01 Interstate land sales............. 1 1
Appropriation:
05.01 Interstate land sales............. -1 -1
07.99 Total balance, end of year........
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
10.00 Total obligations (object class
25.2)........................... 1 1
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 1 1
23.95 New obligations................... -1 -1
----------------------------------------------------------------------------

New budget authority (gross), detail:
60.25 Appropriation (special fund,
indefinite)..................... 1 1
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 New obligations................... 1 1
73.20 Total outlays (gross)............. -1 -1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 1 1
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 1 1
90.00 Outlays........................... 1 1
---------------------------------------------------------------------------

The Interstate Land Sales Full Disclosure Act provides protection to
the public with respect to purchases or leases of subdivision lots.
Statements of record must be filed with the Secretary before
subdivisions with 100 or more lots may be sold in interstate commerce,
except when the subdivision is eligible for exemption.

The Secretary is authorized to charge a fee, to be paid by the
developer when filing a statement of record. The fee receipts are
permanently appropriated and have helped finance a portion of the direct
administrative expenses incurred in program operations.

Public enterprise funds:

Title IV--Corporations

Corporations and agencies of the Department of Housing and Urban
Development which are subject to the Government Corporation Control Act,
as amended, are hereby authorized to make such expenditures, within the
limits of funds and borrowing authority available to each such
corporation or agency and in accord with law, and to make such contracts
and commitments without regard to fiscal year limitations as provided by
section 104 of the Act as may be necessary in carrying out the programs
set forth in the budget for [1997] 1998 for such corporation or agency
except as hereinafter provided: Provided, That collections of these
corporations and agencies may be used for new loan or mortgage purchase
commitments only to the extent expressly provided for in this Act
(unless such loans are in support of other forms of assistance provided
for in this or prior appropriations Acts), except that this proviso
shall not apply to the mortgage insurance or guaranty operations of
these corporations, or where loans or mortgage purchases are necessary
to protect the financial interest of the United States Government.
(Departments of Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1997.)

Rental Housing Assistance Fund

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4041-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
25.2)........................... 55 57 51
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 1 1 1
22.00 New budget authority (gross)...... 55 57 51
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 56 57 51
23.95 New obligations................... -55 -57 -51
24.90 Unobligated balance available, end
of year: Fund balance........... 1 1 1
----------------------------------------------------------------------------

New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 55 57 51
----------------------------------------------------------------------------

Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Fund balance. 8 8 1
73.10 New obligations................... 55 57 51
73.20 Total outlays (gross)............. -55 -64 -51
74.90 Unpaid obligations, end of year:
Obligated balance: Fund balance. 8 1 1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 47 57 51
86.98 Outlays from permanent balances... 8 7
--------- --------- ----------
87.00 Total outlays (gross)........... 55 64 51
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -55 -57 -51
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 7
---------------------------------------------------------------------------

[[Page 551]]

The Housing and Urban Development Act of 1968 authorized the
Secretary to establish a revolving fund into which rental collections in
excess of the established basic rents for units in section 236
subsidized projects would be deposited.

The Housing and Community Development Amendment of 1978 authorized
the Secretary, subject to approval in appropriation acts, to transfer
excess rent collections received after 1978 to the Troubled Projects
Operating Subsidy program, renamed the Flexible Subsidy Fund. Prior to
that time, collections were used for paying tax and utility increases in
section 236 projects. The Housing and Community Development Act of 1980
amended the 1978 Act by authorizing the transfer of excess rent
collections regardless of when collected. This Budget proposes that the
resources from the Rental Housing Assistance Fund continue to be
transferred to the Flexible Subsidy Fund.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4041-0-3-604 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 61 53 57 51
0102 Expense........................... -61 -53 -57 -51
------------ -------------- ------------ -------------
0109 Net income or loss (-)............
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4041-0-3-604 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 8 8 1 1
1206 Non-Federal assets: Receivables,
net............................. 7 7
------------ -------------- ------------ -------------
1999 Total assets.................... 15 15 1 1
LIABILITIES:
Federal liabilities:

2101 Accounts payable................ 8 4
2105 Other........................... 3
------------ -------------- ------------ -------------
2999 Total liabilities............... 8 7
NET POSITION:
3300 Cumulative results of operations.. 7 7 1 1
------------ -------------- ------------ -------------
3999 Total net position.............. 7 7 1 1
------------ -------------- ------------ -------------
4999 Total liabilities and net position 15 14 1 1
-----------------------------------------------------------------------------------------------

Flexible Subsidy Fund

From the Rental Housing Assistance Fund, all uncommitted balances of
excess rental charges as of September 30, 1997, and any collections made
during fiscal year 1998, shall be transferred to the Flexible Subsidy
Fund, as authorized by section 236(g) of the National Housing Act, as
amended.

Program and Financing (in millions of dollars)

Obligations by program activity:
10.00 Total obligations (object class
41.0)........................... 80 15 60
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

Fund balance:
21.90 Treasury balance: Uncommitted. 27 88
21.90 Treasury balance:
Administratively committed.. 82 15 60
21.91 U.S. Securities: Par value,
uncommitted................... 46 39 135
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 155 142 195
22.00 New budget authority (gross)...... 67 68 63
22.30 Unobligated balance expiring...... -1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 221 210 258
23.95 New obligations................... -80 -15 -60
Unobligated balance available, end of year:

Fund balance:
24.90 Fund balance, Uncommitted..... 88 33
24.90 Fund balance: Administratively
committed................... 15 60
24.91 U.S. Securities: Par value
uncommitted................... 39 135 165
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 142 195 198
----------------------------------------------------------------------------

New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 67 68 63
----------------------------------------------------------------------------

Change in unpaid obligations:
72.91 Unpaid obligations, start of year:
Obligated balance: U.S.
Securities: Par value........... 114 101 21
73.10 New obligations................... 80 15 60
73.20 Total outlays (gross)............. -93 -95 -73
74.91 Unpaid obligations, end of year:
Obligated balance: U.S.
Securities: Par value........... 101 21 7
----------------------------------------------------------------------------

Outlays (gross), detail:
86.98 Outlays from permanent balances... 93 95 73
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
88.00 Federal sources............... -56 -57 -51
88.20 Interest on U.S. securities... -8 -8 -9
88.40 Non-Federal sources........... -3 -3 -3
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -67 -68 -63
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 26 27 10
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4044-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 584 675 768
1231 Disbursements: Direct loan
disbursements................... 93 95 73
1251 Repayments: Repayments and
prepayments..................... -2 -2 -3
--------- --------- ----------
1290 Outstanding, end of year........ 675 768 838
---------------------------------------------------------------------------

The Flexible Subsidy Fund assisted financially troubled subsidized
projects under certain FHA authorities. The subsidies were intended to
prevent potential losses to the FHA fund resulting from project
insolvency and to preserve these projects as a viable source of housing
for low and moderate-income tenants. Priority was given to projects with
Federal insurance-in-force and then to those with mortgages that had
been assigned to the Department of Housing and Urban Development.

A portion of Flexible Subsidy capital improvement loans were used,
along with incentives available in the Emergency Low-Income Housing
Preservation program, to extend affordability requirements for projects
eligible to prepay mortgages.

The budget assumes that the account will continue to serve as a
repository of excess rental charges appropriated from the Rental Housing
Assistance Fund. Beginning in FY 1996 these resources are no longer used
for new reservations, but they continue to offset Flexible Subsidy
outlays and other discretionary expenditures.

Summary of Administrative Commitments

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Program by activities:
Capital investments:
Flexible subsidy reservations... 18 60
Administrative commitments,
start of year................. 82 15 60
Cancellation of prior year
commitments................... -5
Administrative commitments, end
of year....................... -15 -60
------------------------------------
Capital investment--
obligations................. 80 15 60
====================================

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4044-0-3-604 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 71 66 65 60
0102 Expense........................... -86 -64 -82 -62
------------ -------------- ------------ -------------

[[Page 552]]

0109 Net income or loss (-)............ -15 2 -17 -2
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1101 Fund balances with Treasury..... 126 120 76 44
Investments in US securities:
1102 Treasury securities, par...... 82 140 156 172
1106 Receivables, net.............. 6 4
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 584 676 768 838
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -493 -536 -609 -665
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 91 140 159 173
1901 Other Federal assets: Other assets 26 4
------------ -------------- ------------ -------------
1999 Total assets.................... 331 408 391 389
LIABILITIES:
2201 Non-Federal liabilities: Accounts
payable......................... 2 1
------------ -------------- ------------ -------------
2999 Total liabilities............... 2 1
NET POSITION:
3100 Appropriated capital.............. 217 217 217 217
3300 Cumulative results of operations.. 112 191 174 172
------------ -------------- ------------ -------------
3999 Total net position.............. 329 408 391 389
------------ -------------- ------------ -------------
4999 Total liabilities and net position 331 409 391 389
-----------------------------------------------------------------------------------------------

Homeownership Assistance Fund

Unavailable Collections (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4043-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Balance, start of year:
01.99 Balance, start of year............ 4
--------- --------- ----------
03.00 Offsetting Collections............ 4 4
04.00 Total: Balances and collections... 4 8
07.99 Total balance, end of year........ 4 8
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Refunds of offsetting collections. 31
--------- --------- ----------
10.00 Total obligations (object class
44.0)......................... 31
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

21.49 Contract authority.............. 57 57 57
21.90 Treasury balance................ 2 2 2
21.91 U.S. Securities: Par value...... 49 18 18
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 108 77 77
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 108 77 77
23.95 New obligations................... -31
Unobligated balance available, end of year:

24.49 Contract authority.............. 57 57 57
24.90 Treasury balance................ 2 2 2
24.91 U.S. Securities: Par value...... 18 18 18
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 77 77 77
----------------------------------------------------------------------------

New budget authority (gross), detail:
Spending authority from offsetting
collections:

68.00 Offsetting collections (cash)... 4 4
68.45 Portion not available for
obligation (limitation on
obligations).................. -4 -4
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total).....................
----------------------------------------------------------------------------

Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Fund balance. -1 -1 -1
73.10 New obligations................... 31
73.20 Total outlays (gross)............. -31
74.90 Unpaid obligations, end of year:
Obligated balance: Fund balance. -1 -1 -1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.98 Outlays from permanent balances... 31
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
88.00 Federal sources: Interest on
U.S. securities............. -3 -3
88.40 Non-Federal sources........... -1 -1
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -4 -4
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -4 -4
90.00 Outlays........................... 31 -4 -4
---------------------------------------------------------------------------

Status of Contract Authority (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4043-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
0100 Balance, start of year............ 57 57 57
0700 Balance, end of year.............. 57 57 57
---------------------------------------------------------------------------

The Homeownership Assistance Fund was established by the Housing and
Urban-Rural Recovery Act of 1983. It provided for the receipt of
recaptures of budget authority, cash, and interest earnings under the
restructured section 235 program. The funds were authorized to be used,
to the extent approved in Appropriation Acts, by the Secretary to
provide additional section 235 assistance payments for mortgagors who
are unable to assume the full payment due under the mortgage after the
termination of the original 10-year assistance payments contract.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4043-0-3-604 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 4 2 4 4
0102 Expense...........................
------------ -------------- ------------ -------------
0109 Net income or loss (-)............ 4 2 4 4
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1101 Fund balances with Treasury..... 2 1 2 2
Investments in US securities:
1102 Treasury securities, par...... 49 18 21 21
------------ -------------- ------------ -------------
1999 Total assets.................... 51 19 23 23
NET POSITION:
3300 Cumulative results of operations.. 51 19 23 23
------------ -------------- ------------ -------------
3999 Total net position.............. 51 19 23 23
------------ -------------- ------------ -------------
4999 Total liabilities and net position 51 19 23 23
-----------------------------------------------------------------------------------------------

[[Page 553]]

Nehemiah Housing Opportunity Fund

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4071-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
10.00 Total obligations (object class
33.0)........................... 2 21
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 18 21
22.10 Resources available from
recoveries of prior year
obligations..................... 5
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 23 21
23.95 New obligations................... -2 -21
24.90 Unobligated balance available, end
of year: Fund balance........... 21
----------------------------------------------------------------------------

Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Fund balance. 18 11 22
73.10 New obligations................... 2 21
73.20 Total outlays (gross)............. -4 -10 -21
73.45 Adjustments in unexpired accounts. -5
74.90 Unpaid obligations, end of year:
Obligated balance: Fund balance. 11 22 1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 4 10 21
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 4 10 21
---------------------------------------------------------------------------

The Nehemiah grants program was authorized by the Housing and
Community Development Act of 1987 to provide loans to eligible families
to assist in the purchase of new or substantially rehabilitated units.
This schedule reflects the liquidation of remaining reserved and
obligated balances. During fiscal year 1997, up to $20 million of
unobligated balances were available for homeownership activities
pursuant to Public Law 104-204.

Credit accounts:

FHA--Mutual Mortgage Insurance Program Account

(including transfers of funds)

During fiscal year [1997] 1998, commitments to guarantee loans to
carry out the purposes of section 203(b) of the National Housing Act, as
amended, shall not exceed a loan principal of $110,000,000,000[:
Provided, That during fiscal year 1997, the Secretary shall sell
assigned mortgage notes having an unpaid principal balance of up to
$2,000,000,000, which notes were originally insured under section 203(b)
of the National Housing Act: Provided further, That the Secretary may
use the amount of any negative subsidy resulting from the sale of such
assigned mortgage notes during fiscal year 1997 for the purposes
included under this heading].
During fiscal year [1997] 1998, obligations to make direct loans to
carry out the purposes of section 204(g) of the National Housing Act, as
amended, shall not exceed $200,000,000: Provided, That the foregoing
amount shall be for loans to nonprofit and governmental entities in
connection with sales of single family real properties owned by the
Secretary and for- merly insured under [section 203 of such Act] the
Mutual Mortgage Insurance Fund.
For administrative expenses necessary to carry out the guaranteed
and direct loan program, [$350,595,000] $333,421,000, to be derived from
the FHA-mutual mortgage insurance guaranteed loans receipt account, of
which not to exceed [$343,483,000] $326,309,000 shall be transferred to
the appropriation for departmental salaries and expenses; and of which
not to exceed $7,112,000 shall be transferred to the appropriation for
the Office of Inspector General. (Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies Appropriations
Act, 1997.)

Unavailable Collections (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0183-0-1-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Receipts:
02.01 FHA Mutual Mortgage Insurance
Guaranteed Loan, negative
subsidies....................... 523 351 1,576
02.02 FHA Mutual Mortgage Insurance
Guaranteed Loan, negative
subsidies, legislative proposal
not subject to PAYGO............ 52
02.03 FHA Mutual Mortgage Insurance
Guaranteed Loan, negative
subsidies, legislative proposal
subject to PAYGO................ 370
--------- --------- ----------
02.99 Total receipts.................. 523 351 1,998
Appropriation:
05.01 FHA mutual mortgage insurance
program account................. -523 -351 -333
--------- --------- ----------
05.99 Subtotal appropriation............ -523 -351 -333
07.99 Total balance, end of year........ 1,665
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
00.09 Administrative expenses........... 342 351 333
00.10 Subsidy rate reestimate........... 181
--------- --------- ----------
10.00 Total obligations............... 523 351 333
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 523 351 333
23.95 New obligations................... -523 -351 -333
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.25 Appropriation (special fund,
definite)..................... 342 351 333
Permanent:

60.25 Appropriation (special fund,
indefinite)................... 181
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 523 351 333
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 New obligations................... 523 351 333
73.20 Total outlays (gross)............. -523 -351 -333
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 342 351 333
86.97 Outlays from new permanent
authority....................... 181
--------- --------- ----------
87.00 Total outlays (gross)........... 523 351 333
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 523 351 333
90.00 Outlays........................... 523 351 333
---------------------------------------------------------------------------

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)

Guaranteed loan levels supportable by subsidy
budget authority:
2150 MMI Fund, Section 203(b).......... 74,324 93,173 83,450
2150 Standby commitment authority...... 16,827 26,550
--------- --------- ----------
2159 Total loan guarantee levels..... 74,324 110,000 110,000
Guaranteed loan subsidy (in percent):
2320 Subsidy rate...................... -2.77 -2.88 -2.62
--------- --------- ----------
2329 Weighted average subsidy rate... -2.77 -2.88 -2.62
Guaranteed loan subsidy budget authority:
2330 MMI Section 203(b) negative
subsidy......................... -1,549 -1,855 -1,523
--------- --------- ----------
2339 Total subsidy budget authority.. -1,549 -1,855 -1,523

[[Page 554]]

Guaranteed loan subsidy outlays:
2340 Subsidy outlays................... -1,549 -1,855 -1,523
--------- --------- ----------
2349 Total subsidy outlays........... -1,549 -1,855 -1,523
---------------------------------------------------------------------------

FHA will continue to provide mortgage insurance to encourage lenders
to make credit available to expand homeownership. FHA will continue to
predominantly serve borrowers that the conventional market does not
adequately serve: first-time homebuyers; minorities; lower-income
families; and, residents of underserved areas (central cities and rural
areas). Currently, the maximum mortgage amount for FHA-insured one-
family loans is set at 95 percent of area median house price, provided
that the amount is never less than 38 percent of the conforming loan
limit--the maximum mortgage amount for loans purchased by the housing
secondary market Government-Sponsored Enterprises, Fannie Mae and
Freddie Mac--and never more than 75 percent of the conforming loan
limit. The Administration proposes to increase the maximum mortgage
amount for FHA-insured loans in all areas to equal the conforming loan
limit. In addition, starting in 1997, FHA hopes to test the viability of
sharing single-family mortgage risk between the Federal Government and
other partners, including private mortgage insurers and state agencies.

Credit Subsidy and Administrative Expenses.--As required by the
Federal Credit Reform Act of 1990, this account records administrative
expenses for this program, as well as the subsidy costs associated with
the loan guarantees committed in 1992 and thereafter, if any. The
subsidy amounts are estimated on a present value basis; the
administrative expenses are estimated on a cash basis.

Object Classification (in millions of dollars)

FHA-Mutual Mortgage Insurance Program Account

(Legislative proposal, subject to PAYGO)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0183-4-1-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Guaranteed loan levels supportable by subsidy
budget authority:
2150 MMI Fund, Section 203(b).......... 7,094
Guaranteed loan subsidy (in percent):
2320 Subsidy rate...................... -0.37
--------- --------- ----------
2329 Weighted average subsidy rate... -0.37
Guaranteed loan subsidy budget authority:
2330 MMI Section 203(b) negative
subsidy......................... -370
--------- --------- ----------
2339 Total subsidy budget authority.. -370
Guaranteed loan subsidy outlays:
2340 Subsidy outlays................... -370
--------- --------- ----------
2349 Total subsidy outlays........... -370
---------------------------------------------------------------------------

This adjustment reflects the effect of two pieces of legislation.
The first is the Administration's proposal to increase the maximum
mortgage amount for single family FHA-insured loans in all areas to
equal the GSE conforming loan limits. If enacted, this change is
anticipated to increase insurance written by $7 billion in 1998,
generating $206 million in additional negative credit subsidy. The
second is anticipated action by the Congress to eliminate permanently
the assignment program and replace it with additional loss mitigation
tools. This change has already been enacted for insurance endorsed in
all prior years. If enacted permanently, it would decrease the
(negative) credit subsidy rate for MMI loans in 1998 by 0.37 percent,
producing $164 million in negative credit subsidy in 1998. These two
changes would result in additional outlay reductions in subsequent
years.

FHA--Mutual Mortgage Insurance Direct Loan Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct loans...................... 3 200 200
00.02 Interest paid to Treasury......... 7 11
00.03 Claims & other.................... 4
--------- --------- ----------
10.00 Total obligations............... 3 207 215
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 1 61
22.00 New financing authority (gross)... 4 267 311
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 4 268 372
23.95 New obligations................... -3 -207 -215
24.90 Unobligated balance available, end
of year: Fund balance........... 1 61 157
----------------------------------------------------------------------------

New financing authority (gross), detail:
67.15 Authority to borrow (indefinite).. 3 200 200
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 1 67 111
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 4 267 311
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 New obligations................... 3 207 215
73.20 Total financing disbursements
(gross)......................... -3 -207 -215
87.00 Total financing disbursements
(gross)......................... 3 207 215
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
88.25 Interest on uninvested funds.. -2
88.40 Other collections from non-
Federal sources............. -1 -67 -109
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -1 -67 -111
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 3 200 200
90.00 Financing disbursements........... 2 140 104
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, this non-
budgetary account records all cash flows to and from the Government
resulting from direct loans obligated in 1992 and thereafter (including
modifications of direct loans that resulted from obligations in any
year). The amounts in this account are a means of financing and are not
included in the budget totals. The $200 million in 1998 direct loan
limitation in the MMI Fund would permit the Department to use Purchase
Money Mortgages (PMMs) to help finance the sale of acquired single
family properties. HUD would extend credit for these single-family homes
to community nonprofit organizations or local government entities who
would be expected to sell the properties to low- and moderate-income
buyers. The use of PMMs provides a tool for State and local nonprofit
organizations to use in revitalizing communities, and creates

[[Page 555]]

enhanced homeownership opportunities for low- and moderate-income
families.

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4242-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........ 200 200 200
1112 Unobligated direct loan limitation -197
--------- --------- ----------
1150 Total direct loan obligations... 3 200 200
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 2 145
1231 Disbursements: Direct loan
disbursements................... 3 200 200
1251 Repayments: Repayments and
prepayments..................... -1 -57 -88
1263 Write-offs for default: Direct
loans........................... -3
--------- --------- ----------
1290 Outstanding, end of year........ 2 145 255
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4242-0-3-371 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Net value of assets related to
post-1991 direct loans
receivable:

1401 Direct loans receivable, gross.. 2 145 254
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 2 145 254
------------ -------------- ------------ -------------
1999 Total assets.................... 2 145 254
-----------------------------------------------------------------------------------------------

FHA--Mutual Mortgage Insurance Guaranteed Loan Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Default claims and other.......... 1,698 1,562 1,944
00.04 Working capital fund
reimbursements.................. 19 19 19
00.05 Payment of negative subsidy to
receipt account................. 342 351 1,523
00.06 Payment of negative subsidy to
liquidating account............. 1,473 1,182
00.07 Subsidy reestimate paid to
liquidating account............. 1,227
00.08 Interest payments to Treasury..... 153 184 215
00.09 Payment to liquidating account for
asset sale...................... 1,321 1,011
--------- --------- ----------
10.00 Total obligations............... 6,233 4,309 3,701
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 701 907 1,321
22.00 New financing authority (gross)... 6,439 4,722 3,908
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 7,140 5,629 5,229
23.95 New obligations................... -6,233 -4,309 -3,701
24.90 Unobligated balance available, end
of year: Fund balance........... 907 1,321 1,528
----------------------------------------------------------------------------

New financing authority (gross), detail:
67.15 Authority to borrow (indefinite).. 1,527
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 4,912 4,722 3,908
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 6,439 4,722 3,908
----------------------------------------------------------------------------

Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Obligated
balance......................... 77 47 47
73.10 New obligations................... 6,233 4,309 3,701
73.20 Total financing disbursements
(gross)......................... -6,263 -4,309 -3,701
74.90 Unpaid obligations, end of year:
Obligated balance: Obligated
balance......................... 47 47 47
87.00 Total financing disbursements
(gross)......................... 6,263 4,309 3,701
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
88.25 Interest on uninvested funds.. -114 -163 -146
Non-Federal sources:
88.40 Fees and premiums........... -2,515 -2,519 -2,709
88.40 Recoveries on defaulted
notes..................... -670 -945 -1,053
88.40 Gross proceeds from asset
sales..................... -1,613 -1,095
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -4,912 -4,722 -3,908
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 1,527
90.00 Financing disbursements........... 1,350 -414 -207
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4587-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders......... 110,000 110,000 110,000
2112 Uncommitted loan guarantee
limitation...................... -35,676 -16,827 -26,550
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 74,324 93,173 83,450
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 203,414 242,407 283,605
2231 Disbursements of new guaranteed
loans........................... 59,221 65,440 60,718
2251 Repayments and prepayments........ -18,616 -22,858 -22,458
Adjustments:

2261 Terminations for default that
result in loans receivable.... -416 -145 -231
2262 Terminations for default that
result in acquisition of
property...................... -1,154 -1,118 -1,365
2263 Terminations for default that
result in claim payments...... -42 -121 -166
--------- --------- ----------
2290 Outstanding, end of year........ 242,407 283,605 320,103
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 242,407 283,605 320,103
----------------------------------------------------------------------------

Addendum:
Cumulative balance of defaulted guaranteed
loans that result in loans receivable:

2310 Outstanding, start of year...... 413 866 818
2331 Disbursements for guaranteed
loan claims................... 416 145 232
2351 Repayments of loans receivable.. -1 -36 -34
2364 Other adjustments, net.......... 38 -157 -161
--------- --------- ----------
2390 Outstanding, end of year...... 866 818 855
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, this non-
budgetary account records all cash flows to and from the Government
resulting from loans insured in 1992 and thereafter. The amounts in this
account are considered a means of financing and are not included in the
budget totals.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4587-0-3-371 1995 actual
\1\ 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 777 954 1,368 724
Net value of assets related to
post-1991 acquired defaulted
guaranteed loans receivable:

1501 Defaulted guaranteed loans
receivable, gross............. 413 866 818 855
1504 Foreclosed property............. 324 521 534 609
1505 Allowance for subsidy cost...... -429 -405 -399 -437
------------ -------------- ------------ -------------
1599 Net value of assets related to
defaulted guaranteed loan... 308 982 953 1,027
------------ -------------- ------------ -------------
1999 Total assets.................... 1,085 1,936 2,321 1,751
LIABILITIES:
2103 Federal liabilities: Federal
liabilities, Debt............... 1,171 2,698 2,698 1,838
2204 Non-Federal liabilities:
Liabilities for loan guarantees. -86 -762 -377 -87
------------ -------------- ------------ -------------
2999 Total liabilities............... 1,085 1,936 2,321 1,751
------------ -------------- ------------ -------------
4999 Total liabilities and net position 1,085 1,936 2,321 1,751
-----------------------------------------------------------------------------------------------

[[Page 556]]

\1\ As reflected in the 1997 Budget. Subsidy reestimates for fiscal
year 1996 disbursements will be performed for the mid-session review of
the Budget.

FHA--Mutual Mortgage and Cooperative Housing Insurance Funds Liquidating
Account

Program and Financing (in millions of dollars)

Obligations by program activity:
Operating expenses:

00.03 Other operating costs........... 216 147 146
00.04 Working Capital Fund
reimbursements................ 31 31 31
00.05 Participation payments.......... 1 1 1
--------- --------- ----------
00.91 Total operating expenses...... 248 179 178
Capital investment:

01.02 Assignment of defaulted
mortgages..................... 465 309 73
01.03 Acquisition of real properties.. 2,017 785 485
01.05 Acquisition of other assets..... 39 39 39
01.07 Capitalized property expenses... 264 159 76
01.08 Loss on defaulted guaranteed
loans......................... 2 10 8
01.09 Preforeclosure sale claims...... 18 73 59
--------- --------- ----------
01.91 Total capital investment...... 2,805 1,375 740
--------- --------- ----------
10.00 Total obligations............... 3,053 1,554 918
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

21.90 Treasury balance................ -163 2,905 1,242
U.S. Securities:
21.91 Par value..................... 6,673 7,045 11,161
21.92 Unrealized discounts.......... -66 -87 -67
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 6,444 9,863 12,336
22.00 New budget authority (gross)...... 6,472 4,027 1,438
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 12,916 13,890 13,774
23.95 New obligations................... -3,053 -1,554 -918
Unobligated balance available, end of year:

24.90 Fund balance.................... 2,905 1,242 965
U.S. Securities:
24.91 Par value..................... 7,045 11,161 11,958
24.92 Unrealized discounts.......... -87 -67 -67
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 9,863 12,336 12,856
----------------------------------------------------------------------------

New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 6,472 4,027 1,438
----------------------------------------------------------------------------

Change in unpaid obligations:
Unpaid obligations, start of year:

Obligated balance:
72.90 Fund balance.................. 659 685
72.91 U.S. Securities: Par value.... 685
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 659 685 685
73.10 New obligations................... 3,053 1,554 918
73.20 Total outlays (gross)............. -3,031 -1,554 -918
73.32 Obligated balance transferred from
other accounts.................. 4
Unpaid obligations, end of year:

Obligated balance:
74.90 Fund balance.................. 685 685
74.91 U.S. Securities: Par value.... 685
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 685 685 685
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 2,372 869 233
86.98 Outlays from permanent balances... 659 685 685
--------- --------- ----------
87.00 Total outlays (gross)........... 3,031 1,554 918
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
88.20 Interest on U.S. securities... -531 -676 -785
Non-Federal sources:
88.40 Fees and premiums........... -92 -81 -72
88.40 Rebate of unearned prepaid
premiums collected........ 287 48 16
88.40 Proceeds from sale of real
property.................. -1,901 -962 -485
88.40 Proceeds from sale of
mortgage notes............ -1,321 -1,011
88.40 Repayment of mortgage notes
and sales contracts....... -1 -1 -1
88.40 Interest and operating
income.................... -31 -37 -46
88.40 Recoveries on defaulted
mortgages................. -237 -142 -22
88.40 Other interest, dividends
and revenues.............. -1 -43
88.40 Payment from financing
account................... -2,700 -1,164
88.40 Miscellaneous collections... -10
88.40 Other income................ 65
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -6,472 -4,027 -1,438
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -3,441 -2,473 -520
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4070-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 15 7 5
1251 Repayments: Repayments and
prepayments..................... -1 -1
1264 Write-offs for default: Other
adjustments, net................ -7 -1
--------- --------- ----------
1290 Outstanding, end of year........ 7 5 5
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

2261 Terminations for default that
result in loans receivable.... -465 -309 -73
2262 Terminations for default that
result in acquisition of
property...................... -2,017 -784 -485
2263 Terminations for default that
result in claim payments...... -20 -84 -67
2264 Other adjustments, net.......... 43,698
--------- --------- ----------
2290 Outstanding, end of year........ 121,587 107,374 94,864
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 121,587 107,374 94,864
----------------------------------------------------------------------------

Addendum:
Cumulative balance of defaulted guaranteed
loans that result in loans receivable:

2310 Outstanding, start of year...... 3,886 1,862 358
2331 Disbursements for guaranteed
loan claims................... 465 309 73
2351 Repayments of loans receivable.. -1,725 -1,111 -63
2361 Write-offs of loans receivable.. -763 -702 -28
2364 Other adjustments, net.......... -1 -1
--------- --------- ----------
2390 Outstanding, end of year...... 1,862 358 339
---------------------------------------------------------------------------

The Federal Housing Administration Fund currently consists of four
separate insurance funds.

In order to present more clearly the operations of the various
funds, FHA's budget transactions are separated into two major business
segments. The basic single-family insurance programs in the Mutual
Mortgage Insurance Fund and the multifamily Cooperative Management
Housing insurance funds (MMI/CMHI) form one segment. All other
multifamily and other specialized insurance programs in the General
Insurance and Special Risk Insurance funds (GI/SRI) form the other
segment.

The Federal Credit Reform Act of 1990 creates a structure of three
accounts for existing credit programs. For each of the FHA business
segments (MMI/CMHI and GI/SRI) there is a liquidating account, which
records the revenues and costs associated with loan insurance committed
prior to October 1, 1991; a financing account which records the revenues
and costs associated with commitments to insure loans made after

[[Page 557]]

September 30, 1991; and, a program account which records the
transactions associated with the program subsidy costs, if any, and the
costs of administering the program.

This liquidating account records, for this program, all cash flows
to and from the Government resulting from MMI/CMHI loans insured prior
to fiscal year 1992, and is shown on a cash basis. All new activity in
this program in 1992 and thereafter (including modifications of loans
insured in any year) is recorded in the corresponding program (86-0183)
and financing (86-4587 and 86-4242) accounts.

The program activity in the ``Program Highlights'' table shown below
reflects only the activity in the MMI/CMHI liquidating and financing
accounts. The GI/SRI program activity can be found with the GI/SRI
liquidating account (86-4072).

PROGRAM HIGHLIGHTS

[In millions of dollars]

1996 actual
\1\ 1997 est. 1998 est.
Insurance initiation:
Mortgage insurance applications
(units)......................... 977,702 1,152,163 1,016,302
====================================
Mortgage insurance written:
Units............................. 739,603 810,439 737,002
Amount............................ 59,221 65,440 60,718
====================================
Insurance maintenance: Outstanding
balance of insurance in force,
end of year:
Mortgage insurance................ 363,995 390,979 414,967
====================================
\1\ Unaudited preliminary results.

Insurance reserves from operations at the end of 1996 are estimated
to be in a surplus position for the Mutual Mortgage Insurance and
Cooperative Management Housing insurance funds. The status of estimated
insurance reserves from operations (retained income or deficit) through
1998 for the MMI/CMHI account follows:

STATUS OF INSURANCE RESERVES FROM OPERATIONS

[In millions of dollars]

1996 est.\1\ 1997 est. 1998 est.
Insurance fund:
Mutual mortgage/CMHI:
Liquidating account \2\......... 8,776 10,288 10,877
Receipt Account \2\............. 1,414
\1\ Unaudited preliminary results.
\2\ Reflects impact from the transfer of negative subsidy from the
Financing account to the Liquidating account in 1996 and 1997. Negative
subsidy transfers are to the Receipt Account in 1998.

Financial condition.--The following tables reflect the revenues,
expenses and financial condition of the MMI/CMHI liquidating funds based
on Generally Accepted Accounting Principles.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4070-0-3-371 1995 actual
\1\ 1996 actual
\2\ 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 2,821 2,103 1,935 958
0102 Expense........................... -1,123 -1,097 -421 -368
------------ -------------- ------------ -------------
0109 Net income or loss (-)............ 1,698 1,006 1,514 590
-----------------------------------------------------------------------------------------------
\1\ As reflected in the 1997 Budget.
\2\ Estimated result on GAAP basis pending final audit.

Balance Sheet (in millions of dollars)

1101 Fund balances with Treasury..... 495 2,905 1,724 1,728
Investments in US securities:
Treasury securities, par:
1102 Treasury securities, par.... 6,673 7,729 11,230 11,780
1102 Unamortized net premium/
discount.................. -67 -87 -69 -69
1106 Receivables, net.............. 123 106 106 106
1107 Advances and prepayments...... 72
Non-Federal assets:

1206 Receivables, net................ 159 207 207 207
1207 Advances and prepayments........ 12 -62 -62 -62
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 15 7 6 4
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -3 -1 -1 -1
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 12 6 5 3
1701 Defaulted guaranteed loans,
gross......................... 3,886 1,862 358 339
1703 Allowance for estimated
uncollectible loans and
interest (-).................. -738 -495 -95 -90
1704 Defaulted guaranteed loans and
interest receivable, net...... 3,148 1,367 263 249
1705 Allowance for uncollectables
from foreclosed property...... -526 -354 -140 -71
1706 Foreclosed property............. 1,379 872 344 174
------------ -------------- ------------ -------------
1799 Value of assets related to
loan guarantees............. 4,001 1,885 467 352
1901 Other Federal assets: Other assets 18 7 15
------------ -------------- ------------ -------------
1999 Total assets.................... 11,480 12,707 13,615 14,060
LIABILITIES:
2101 Federal liabilities: Accounts
payable......................... 4
Non-Federal liabilities:

2201 Accounts payable................ 496 676 567 542
2206 Pension and other actuarial
liabilities................... 2,254 2,175 1,729 1,626
2207 Unearned revenue and advances... 1,805 1,061 1,013 997
------------ -------------- ------------ -------------
2999 Total liabilities............... 4,559 3,912 3,309 3,165
NET POSITION:
3100 Appropriated capital.............. 19 19 18 18
3300 Cumulative results of operations.. 6,902 8,776 10,288 10,877
------------ -------------- ------------ -------------
3999 Total net position.............. 6,921 8,795 10,306 10,895
------------ -------------- ------------ -------------
4999 Total liabilities and net position 11,480 12,707 13,615 14,060
-----------------------------------------------------------------------------------------------
\1\ As reflected in the 1997 Budget.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4070-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
25.2 Other services.................... 246 178 177
32.0 Land and structures............... 2,282 943 560
33.0 Investments and loans............. 504 348 112
42.0 Insurance claims and indemnities.. 20 84 68
44.0 Refunds........................... 1 1 1
--------- --------- ----------
99.0 Subtotal, direct obligations.. 3,053 1,554 918
--------- --------- ----------
99.9 Total obligations............... 3,053 1,554 918
---------------------------------------------------------------------------

FHA--General and Special Risk Program Account

(including transfers of funds)

For the cost of guaranteed loans, as authorized by sections 238 and
519 of the National Housing Act (12 U.S.C. 1715z-3 and 1735c), including
the cost of loan guarantee modifications (as that term is defined in
section 502 of the Congressional Budget Act of 1974, as amended)
[$85,000,000] $81,000,000, to remain available until expended: Provided,
That these funds are available to subsidize total loan principal, any
part of which is to be guaranteed, of up to $17,400,000,000: [Provided
further, That during fiscal year 1997, the Secretary shall sell assigned
notes having an unpaid principal balance of up to $2,500,000,000, which
notes are held by the Secretary under the General Insurance and Special
Risk Insurance funds:] Provided further, That any amounts made available
in any prior appropriations Act for the cost (as such term is defined in
section 502 of the Congressional Budget Act of 1974) of guaranteed loans
that are obligations of the funds established under section 238 or 519
of the National Housing Act that have not been obligated or that are
deobligated shall be available to the Secretary of Housing and Urban
Development in connection with the making of such guarantees and shall
remain available until expended, notwithstanding the expiration of any
period of availability otherwise applicable to such amounts.
Gross obligations for the principal amount of direct loans, as
authorized by sections 204(g), 207(l), 238(a), and 519(a) of the
National Housing Act, shall not exceed $120,000,000; of which not to
exceed $100,000,000 shall be for bridge financing in connection with the
sale of multifamily real properties owned by the Secretary and for

[[Page 558]]

merly insured under such Act; and of which not to exceed $20,000,000
shall be for loans to nonprofit and governmental entities in connection
with the sale of single-family real properties owned by the Secretary
and formerly insured under such Act.
In addition, for administrative expenses necessary to carry out the
guaranteed and direct loan programs, [$207,470,000] $222,305,000, of
which [$203,299,000] $218,134,000, including $25,000,000 for the
enforcement of housing standards on FHA-insured multifamily projects,
shall be transferred to the appropriation for departmental salaries and
expenses; and of which $4,171,000 shall be transferred to the
appropriation for the Office of Inspector General. (Departments of
Veterans Affairs and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1997.)

Unavailable Collections (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0200-0-1-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Balance, start of year:
01.99 Balance, subsidy downward
reestimate, start of year....... 1,209 1,506 2,119
Receipts:
02.01 Negative Subsidies................ 721 613 122
02.02 Negative Subsidies, legislative
proposal........................ 665
02.03 Downward reestimates of subsidies. 110
--------- --------- ----------
02.99 Total receipts.................. 831 613 787
--------- --------- ----------
04.00 Total: Balances and collections... 2,040 2,119 2,906
Appropriation:
05.01 General and special risk program
account......................... -534
07.99 Total balance, end of year........ 1,506 2,119 2,906
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Guaranteed loan subsidy........... 143 176 154
00.02 Prior year adjustment............. 32
00.03 Indirect modification subsidy..... 37
00.04 FHA multi-family demonstration.... 30 10
00.09 Administrative expenses........... 202 207 222
--------- --------- ----------
10.00 Total obligations............... 414 413 386
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

Uninvested balance:
21.40 Uncommitted................... 31 534 439
21.40 Administratively committed.... 69 56 40
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 100 590 479
22.00 New budget authority (gross)...... 905 302 303
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,005 892 782
23.95 New obligations................... -414 -413 -386
Unobligated balance available, end of year:

Uninvested balance:
24.40 Uncommitted................... 534 439 358
24.40 Administratively committed.... 56 40 38
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 590 479 396
----------------------------------------------------------------------------

New budget authority (gross), detail:
Appropriation:

40.00 Appropriation................... 202
40.00 Indirect modification subsidy... 37
40.00 FHA multi-family demonstration.. 30 10
40.00 Appropriation................... 85
40.25 Appropriation (special fund,
indefinite)..................... 534 292 303
--------- --------- ----------
43.00 Appropriation (total)........... 888 302 303
50.05 Reappropriation (indefinite)...... 17
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 905 302 303
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 30 46 88
73.10 New obligations................... 414 413 386
73.20 Total outlays (gross)............. -398 -371 -396
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 46 88 78
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 307 271 283
86.93 Outlays from current balances..... 91 100 113
--------- --------- ----------
87.00 Total outlays (gross)........... 398 371 396
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 905 302 303
90.00 Outlays........................... 398 371 396
---------------------------------------------------------------------------

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)

Guaranteed loan levels supportable by subsidy
budget authority:
2150 Multifamily development........... 1,013 1,170 1,053
2150 Refinance of FHA-insured mortgages 1,134 1,000 927
2150 Risk sharing programs............. 337 577 876
2150 Mixed Income...................... 404 150
2150 Cooperatives...................... 31 25 20
2150 Health and residential care
facilities...................... 694 1,748 2,052
2150 Neighborhood improvement program.. 100
2150 Small Projects.................... 374 537
2150 Micro Loans....................... 671 895
2150 Indian Housing.................... 2 2
2150 Preservation...................... 267 150
2150 Single family, negative........... 7,619 8,569 8,388
2150 Title I guarantees................ 1,656 2,710 2,400
--------- --------- ----------
2159 Total loan guarantee levels..... 12,751 17,400 17,400
Guaranteed loan subsidy (in percent):
2320 Multifamily development........... 11.96 8.78 8.51
2320 Refinance of multifamily mortgages 2.51 -0.79 -0.75
2320 Mixed Income...................... 0.00 12.26 12.13
2320 Cooperatives...................... 27.04 30.47 29.21
2320 Nursing Homes..................... -1.98 0.00 -0.70
2320 Hospitals......................... -3.78 0.00 1.75
2320 Preservation...................... -1.96 0.00 0.00
2320 234c/Other single family programs. -1.34 -1.55 -1.32
2320 Single family indian housing...... 0.00 9.51 9.12
2320 Title I........................... -1.44 -1.59 -1.50
--------- --------- ----------
2329 Weighted average subsidy rate... 0.00 -0.21 -0.22
Guaranteed loan subsidy budget authority:
2330 Subsidy budget authority.......... 703 95 81
--------- --------- ----------
2339 Total subsidy budget authority.. 703 95 81
Guaranteed loan subsidy outlays:
2340 Subsidy outlays................... 196 164 174
--------- --------- ----------
2349 Total subsidy outlays........... 196 164 174
----------------------------------------------------------------------------

Administrative expense data:
3510 Budget authority.................. 202 207 222
3590 Outlays from new authority........ 202 207 222
---------------------------------------------------------------------------

Multifamily Products.--This account includes budget authority for
multifamily insurance programs requiring positive credit subsidies, as
well as for salaries and expenses for all General and Special Risk
Insurance Fund programs.

The credit subsidy appropriation of $81 million requested for 1998
will be used in conjunction with $71 million of carryover budget
authority to provide a total program level of $152 million. The $222.3
million requested in 1998 for administrative expenses includes $25
million to support enhanced measures being undertaken to enforce
standards for multifamily housing projects.

Subsidy Costs and Administrative Expenses.--As required by the
Federal Credit Reform Act of 1990, this account records, for the single
family, multifamily and Title I insur-

[[Page 559]]

ance programs of FHA's General and Special Risk Insurance Funds, the
subsidy costs associated with the loan guarantees committed or direct
loans obligated in 1992 and thereafter (including modifications of loan
guarantees or direct loans that resulted from obligations or commitments
in any year), as well as administrative expenses of these programs. The
subsidy amounts are estimated on a present value basis; the
administrative expenses are accounted for on a cash basis.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0200-0-1-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
41.0 Direct obligations: Grants,
subsidies, and contributions.... 212 206 164
99.0 Reimbursable obligations:
Subtotal, reimbursable
obligations..................... 202 207 222
--------- --------- ----------
99.9 Total obligations............... 414 413 386
---------------------------------------------------------------------------

FHA--General and Special Risk Guaranteed Loan Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
Capital investment, claims and other:

00.01 Default claims and other........ 376 822 1,052
00.03 Working capital fund
reimbursements................ 5 5 5
00.04 Payment of negative subsidy to
receipt account............... 142 119 122
00.05 Interest paid to Treasury....... 31 42 82
00.06 Downward subsidy rate reestimate 110
00.08 Asset sale negative subsidy
payment to receipt account.... 534 414
00.09 Asset sale payment to
liquidating account........... 1,204 643
00.10 Modification of pre-1992
guarantees, costs............. 37 20 20
00.11 Portfolio reengineering
legislative savings........... 665
00.12 Waiver of PD/mortgage sale law,
savings....................... 40 80
--------- --------- ----------
10.00 Total obligations............. 2,479 2,145 1,946
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 435 547 553
22.00 New financing authority (gross)... 2,731 2,226 1,994
22.60 Redemption of debt................ -140 -75 -135
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 3,026 2,698 2,412
23.95 New obligations................... -2,479 -2,145 -1,946
24.90 Unobligated balance available, end
of year: Fund balance........... 547 553 466
----------------------------------------------------------------------------

New financing authority (gross), detail:
61.00 Transferred to other accounts..... -100
67.15 Authority to borrow (indefinite).. 86 166 760
Spending authority from offsetting
collections:

68.00 Offsetting collections (cash)... 2,788 2,060 1,234
68.10 Change in receivables from
program account............... -43
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 2,745 2,060 1,234
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 2,731 2,226 1,994
----------------------------------------------------------------------------

Change in unpaid obligations:
Unpaid obligations, start of year:

72.40 Obligated balance: Appropriation 16 42 42
72.95 Receivables from program account 43
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 59 42 42
73.10 New obligations................... 2,479 2,145 1,946
73.20 Total financing disbursements
(gross)......................... -2,496 -2,145 -1,946
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 42 42 42
87.00 Total financing disbursements
(gross)......................... 2,496 2,145 1,946
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
Federal sources:
88.00 Payments from program
account................... -172 -164 -174
88.00 Modification subsidy,
program acct.............. -37 -20 -20
88.00 Repayment of principal and
interest from liquidating
account................... -137 -117 -117
88.00 Repayment of portfolio
reengineering savings
borrowed.................. -67
88.25 Interest on uninvested funds.. -35 -27 -23
Non-Federal sources:
88.40 Fees and premiums........... -234 -379 -483
88.40 Recoveries on defaulted
mortgages................. -135 -276 -350
88.40 Proceeds from sale of
mortgage notes............ -2,038 -1,077
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -2,788 -2,060 -1,234
88.95 Change in receivables from program
accounts........................ 43
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... -14 166 760
90.00 Financing disbursements........... -292 85 712
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4077-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders......... 17,400 17,400 17,400
2112 Uncommitted loan guarantee
limitation...................... -4,649
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 12,751 17,400 17,400
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 35,457 41,830 52,076
2231 Disbursements of new guaranteed
loans........................... 12,220 14,652 15,005
2251 Repayments and prepayments........ -5,510 -3,646 -2,594
Adjustments:

2261 Terminations for default that
result in loans receivable.... -90 -399 -552
2262 Terminations for default that
result in acquisition of
property...................... -247 -251 -295
2263 Terminations for default that
result in claim payments...... -110 -125
--------- --------- ----------
2290 Outstanding, end of year........ 41,830 52,076 63,515
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 41,830 52,076 63,515
----------------------------------------------------------------------------

Addendum:
Cumulative balance of defaulted guaranteed
loans that result in loans receivable:

2310 Outstanding, start of year...... 88 159 539
2331 Disbursements for guaranteed
loan claims................... 90 399 552
2351 Repayments of loans receivable.. -9 -19 -25
2361 Write-offs of loans receivable.. -10
--------- --------- ----------
2390 Outstanding, end of year...... 159 539 1,066
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, this non-
budgetary account records all cash flows to and from the Government
resulting from loan guarantees committed in 1992 and thereafter
(including modifications of loan guarantees that resulted from
commitments in any year) for FHA's General and Special Risk Insurance
Fund programs. The amounts in this account are a means of financing and
are not included in the budget totals.

Balance Sheet (in millions of dollars) \1\

-----------------------------------------------------------------------------------------------
Identification code 86-4077-0-3-371 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:

1101 Fund balances with Treasury..... 451 589 504 152
Investments in US securities:
1107 Borrowings receivable from
liquidating account......... 476 336 299 780
Net value of assets related to
post-1991 acquired defaulted
guaranteed loans receivable:

1501 Defaulted guaranteed loans
receivable, gross............. 87 159 539 1,066
1504 Foreclosed property............. 69 118 153 271
1505 Allowance for subsidy cost...... -77 -164 -437 -850
------------ -------------- ------------ -------------

[[Page 560]]

1599 Net value of assets related to
defaulted guaranteed loan... 79 113 255 487
------------ -------------- ------------ -------------
1999 Total assets.................... 1,006 1,038 1,058 1,419
LIABILITIES:
2103 Federal liabilities: Debt......... 476 421 385 533
2204 Non-Federal liabilities:
Liabilities for loan guarantees. 530 617 673 886
------------ -------------- ------------ -------------
2999 Total liabilities............... 1,006 1,038 1,058 1,419
------------ -------------- ------------ -------------
4999 Total liabilities and net position 1,006 1,038 1,058 1,419
-----------------------------------------------------------------------------------------------
\1\ Preliminary results pending final audit. Subsidy reestimates for
fiscal year 1996 disbursements will be performed for the Mid-Session
review of the Budget.

FHA--General and Special Risk Direct Loan Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct loans...................... 40 120
00.02 Interest paid to Treasury......... 3 10
--------- --------- ----------
10.00 Total obligations............... 43 130
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 2
22.00 New financing authority (gross)... 45 142
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 45 144
23.95 New obligations................... -43 -130
24.40 Unobligated balance available, end
of year: Uninvested balance..... 2 14
----------------------------------------------------------------------------

New financing authority (gross), detail:
67.15 Authority to borrow (indefinite).. 40 120
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 5 22
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 45 142
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 New obligations................... 43 130
73.20 Total financing disbursements
(gross)......................... -43 -130
87.00 Total financing disbursements
(gross)......................... 43 130
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

88.40 Offsetting collections (cash)
from: Interest received on
loans......................... -5 -22
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 40 120
90.00 Financing disbursements........... 38 108
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4105-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........ 120 120 120
1112 Unobligated direct loan limitation -120 -80
--------- --------- ----------
1150 Total direct loan obligations... 40 120
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 40
1231 Disbursements: Direct loan
disbursements................... 40 120
1251 Repayments: Repayments and
prepayments..................... -20
--------- --------- ----------
1290 Outstanding, end of year........ 40 140
---------------------------------------------------------------------------

This schedule includes two direct loan programs. One provides bridge
loan financing to facilitate the disposition of multifamily housing
owned by the Department to non-profit organizations who agree to
preserve it as affordable rental or cooperative housing. The second is a
single-family direct loan program for purchase money mortgages, as
discussed in the preceding section for the Mutual Mortgage Insurance
Fund.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4105-0-3-371 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Net value of assets related to
post-1991 direct loans
receivable:

1401 Direct loans receivable, gross.. 40 140
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 40 140
------------ -------------- ------------ -------------
1999 Total assets.................... 40 140
LIABILITIES:
2103 Federal liabilities: Treasury
borrowing....................... 40 140
------------ -------------- ------------ -------------
2999 Total liabilities............... 40 140
------------ -------------- ------------ -------------
4999 Total liabilities and net position 40 140
-----------------------------------------------------------------------------------------------

FHA--Loan Guarantee Recovery Fund--Financing Account

Program and Financing (in millions of dollars)

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 4
22.00 New financing authority (gross)... 4 1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 4 5
24.90 Unobligated balance available, end
of year: Fund balance........... 4 5
----------------------------------------------------------------------------

New financing authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 4 1
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

88.00 Offsetting collections (cash)
from: Federal sources......... -4 -1
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............
90.00 Financing disbursements........... -4 -1
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4106-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders......... 10
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 10
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 7
2231 Disbursements of new guaranteed
loans........................... 7 3
--------- --------- ----------
2290 Outstanding, end of year........ 7 10
----------------------------------------------------------------------------

[[Page 561]]

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 7 10
---------------------------------------------------------------------------

Section 4 of the Church Arson Prevention Act of 1996 (P.L. 104-155),
entitled ``Loan Guarantee Recovery Fund,'' authorizes the Secretary of
Housing and Urban Development to guarantee loans made by financial
institutions to assist certain nonprofit organizations that have been
damaged as a result of acts of arson or terrorism.

FHA--General and Special Risk Insurance Funds Liquidating Account

Program and Financing (in millions of dollars)

Obligations by program activity:
Operating expenses:

00.02 Interest on debentures.......... 18 19 20
00.03 Other operating costs........... 41 148 148
00.04 Working capital fund
reimbursements................ 13 15 15
00.05 Legislative savings repayments.. 138 117 117
--------- --------- ----------
00.91 Total operating expenses...... 210 299 300
Capital investment: Claims and other:

01.01 Acquisition of defaulted Title I
notes......................... 36 36 36
01.02 Assignment of defaulted
mortgages..................... 210 372 1,152
01.03 Acquisition of real properties.. 299 112 89
01.04 Rehabilitation of real
properties.................... 236 140
01.06 Assignment of current mortgages. 1 1
01.07 Capitalized property expenses... 182 97 117
01.08 Loss on defaulted guaranteed
loans......................... 23 66 287
01.10 Tax advances on held mortgages.. 70 70 70
01.11 Claims, other................... 17 13
--------- --------- ----------
01.91 Total capital investment...... 820 1,007 1,905
--------- --------- ----------
10.00 Total obligations............... 1,030 1,306 2,205
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

21.40 Uninvested balance.............. 1,637 1,818 2,143
21.91 U.S. Securities: Par value...... 5 7 7
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 1,642 1,825 2,150
22.00 New budget authority (gross)...... 2,134 1,697 775
22.10 Resources available from
recoveries of prior year
obligations..................... 18
22.60 Redemption of debt................ -70 -66 -66
22.70 Balance of permanent authority
withdrawn....................... -869
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 2,855 3,456 2,859
23.95 New obligations................... -1,030 -1,306 -2,205
Unobligated balance available, end of year:

24.40 Uninvested balance.............. 1,818 2,143 647
24.91 U.S. Securities: Par value...... 7 7 7
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 1,825 2,150 654
----------------------------------------------------------------------------

New budget authority (gross), detail:
62.00 Transferred from other accounts... 100
67.15 Authority to borrow (indefinite).. 66 66 66
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 1,968 1,631 709
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 2,134 1,697 775
----------------------------------------------------------------------------

Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Net obligated
balance: Fund balance........... 366 278 278
73.10 New obligations................... 1,030 1,306 2,205
73.20 Total outlays (gross)............. -1,096 -1,306 -2,205
73.31 Obligated balance transferred to
other accounts.................. -4
73.45 Adjustments in unexpired accounts. -18
74.90 Unpaid obligations, end of year:
Obligated balance: Obligated
balance......................... 278 278 278
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 731 66 757
86.98 Outlays from permanent balances... 365 1,240 1,448
--------- --------- ----------
87.00 Total outlays (gross)........... 1,096 1,306 2,205
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
Non-Federal sources:
88.40 Fees and premiums........... -245 -219 -205
88.40 Rebates of insurance
premiums.................. 8 8 8
88.40 Multifamily foreclosure
sales..................... -42 -96
88.40 Proceeds from sale of real
property.................. -261 -128 -132
88.40 Proceeds from sale of
mortgage notes............ -1,204 -643
88.40 Mortgage sale accounting
adjustment................ 323 -323
88.40 Prior year adjustment....... -5
88.40 Recoveries on defaulted
mortgages................. -284 -14 -14
88.40 Interest and operating
income.................... -210 -221 -225
88.40 Recoveries on defaulted
Title I mortgages......... -19 -17 -14
88.40 Other interest, dividends
and revenue............... -34 -12 -11
88.40 Modification subsidy........ -37 -20 -20
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -1,968 -1,631 -709
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 166 66 66
90.00 Outlays........................... -872 -325 1,496
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Enacted/requested:
Budget Authority.................. 166 66 66
Outlays........................... -872 -325 1,496
Legislative proposal, not subject to
PAYGO:
Budget Authority.................. 523
Outlays........................... 523
------------------------------------
Total:
Budget Authority.................. 166 66 589
Outlays........................... -872 -325 2,019
====================================

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4072-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 107 97 85
1251 Repayments: Repayments and
prepayments..................... -8 -9 -7
1264 Write-offs for default: Other
adjustments, net................ -2 -3 -2
--------- --------- ----------
1290 Outstanding, end of year........ 97 85 76
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

2261 Terminations for default that
result in loans receivable.... -246 -408 -1,188
2262 Terminations for default that
result in acquisition of
property...................... -298 -112 -89
2263 Terminations for default that
result in claim payments...... -23 -48 -287
--------- --------- ----------
2290 Outstanding, end of year........ 49,346 46,247 43,296
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 49,346 46,247 43,296
----------------------------------------------------------------------------

Addendum:
Cumulative balance of defaulted guaranteed
loans that result in loans receivable:

2310 Outstanding, start of year...... 5,234 2,933 1,801
2331 Disbursements for guaranteed
loan claims................... 246 408 1,188
2351 Repayments of loans receivable.. -395 -142 -313
2361 Write-offs of loans receivable.. -1,271 -755 -152
2364 Other adjustments, net.......... -881 -643
--------- --------- ----------
2390 Outstanding, end of year...... 2,933 1,801 2,524
---------------------------------------------------------------------------

The General insurance fund provides for a large number of
specialized mortgage insurance programs, including the insurance of
loans for property improvements as well as for cooperatives,
condominiums, housing for the elderly, rental housing and nonprofit
hospitals.

[[Page 562]]

The Special risk insurance fund provides mortgage insurance on
behalf of mortgagors eligible for interest reduction payments who
otherwise would not be eligible for mortgage insurance. In addition, the
fund provides insurance on mortgages covering experimental housing where
strict adherence to State or local building regulations was not
observed. Insurance is also provided for high-risk mortgagors who
normally would not be eligible for mortgage insurance.

Budget program.--As required by the Federal Credit Reform Act of
1990, this account records, for this program, all cash flows to and from
the Government resulting from loan guarantees committed and direct loans
obligated prior to 1992. This account is shown on a cash basis. New
insurance and direct loan activity in 1992 and thereafter in the GI/SRI
programs is recorded in corresponding program (86-0200) and financing
(86-4077 and 86-4105) accounts.

The program activities in the ``Program Highlights'' table shown
below reflect the consolidated activity of the GI/SRI accounts.

PROGRAM HIGHLIGHTS

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Insurance commitments:
Mortgage insurance applications
(units)......................... 300,794 402,018 434,744
====================================
Mortgage and loan insurance written:
Units............................. 301,730 370,341 407,501
Amount............................ 12,220 14,602 14,988
====================================
Insurance maintenance: Outstanding
balance of insurance in force,
end of year:
Mortgage insurance................ 95,386 103,367 110,878
====================================

Financial Condition.--The following tables reflect the revenues,
expenses, and financial condition of the GI/SRI Liquidating Account
based on Generally Accepted Accounting Principles.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4072-0-3-371 1995 actual
\1\ 1996 actual
\2\ 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 517 370 359 322
0102 Expense........................... -563 -167 -271 -1,821
------------ -------------- ------------ -------------
0109 Net income or loss (-)............ -46 203 88 -1,499
-----------------------------------------------------------------------------------------------
\1\ As reflected in the 1997 Budget.
\2\ Preliminary results pending final audit.
Balance Sheet (in millions of dollars)

1101 Fund balances with Treasury..... 1,134 2,092 2,392 871
Investments in US securities:
1102 Treasury securities, par...... 5 7 7 7
1106 Receivables, net.............. 3 16 16 16
1107 Advances and prepayments...... 20
Non-Federal assets:

1206 Receivables, net................ 98 175 175 175
1207 Advances and prepayments........ 75
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 107 97 85 76
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -22 -21 -18 -16
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 85 76 67 60
1701 Defaulted guaranteed loans,
gross......................... 5,201 2,940 1,801 2,523
1703 Allowance for estimated
uncollectible loans and
interest (-).................. -2,460 -1,957 -1,198 -1,678
1704 Defaulted guaranteed loans and
interest receivable, net...... 2,741 983 603 845
1705 Allowance for uncollectables
from foreclosed property...... -543 -479 -293 -371
1706 Foreclosed property............. 734 632 387 490
------------ -------------- ------------ -------------
1799 Value of assets related to
loan guarantees............. 2,932 1,136 697 964
1901 Other Federal assets: Other assets 38 236
------------ -------------- ------------ -------------
1999 Total assets.................... 4,390 3,502 3,590 2,093
LIABILITIES:
Federal liabilities:

2101 Accounts payable................ 63 373 373 373
2102 Interest payable................ 6
2104 Resources payable to Treasury... 86
Non-Federal liabilities:

2201 Accounts payable................ 131 131 131 131
2202 Interest payable................ 21
2203 Debt............................ 408 82 82 82
2206 Pension and other actuarial
liabilities................... 9,997 8,890 8,890 8,890
Other:
2207 Unearned revenue and advances. 380 111 111 111
2207 Other......................... 50 209 209 209
------------ -------------- ------------ -------------
2999 Total liabilities............... 11,142 9,796 9,796 9,796
NET POSITION:
3100 Appropriated capital.............. 6,287 5,350 5,350 5,350
3300 Cumulative results of operations.. -20,510 -19,115 -19,026 -20,525
3600 Debt Forgiveness.................. 7,471 7,471 7,471 7,471
------------ -------------- ------------ -------------
3999 Total net position.............. -6,752 -6,294 -6,205 -7,704
------------ -------------- ------------ -------------
4999 Total liabilities and net position 4,390 3,502 3,591 2,092
-----------------------------------------------------------------------------------------------
\1\ As reflected in 1997 Budget.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4072-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
25.2 Other services.................... 55 164 164
32.0 Land and structures............... 299 348 229
33.0 Investments and loans............. 246 426 1,433
42.0 Insurance claims and indemnities.. 275 233 244
43.0 Interest and dividends............ 18 18 18
44.0 Repayments to financing account... 137 117 117
--------- --------- ----------
99.9 Total obligations............... 1,030 1,306 2,205
---------------------------------------------------------------------------

FHA--General and Special Risk Insurance Funds Liquidating Account

(Legislative proposal, not subject to PAYGO)

Program and Financing (in millions of dollars)

Obligations by program activity:
Capital investment: Claims and other:

01.01 Change to baseline claims....... 449
01.02 Change to repair and holding
costs......................... -19
01.03 Legislative savings repayments.. 67
--------- --------- ----------
01.91 Total capital investment...... 497
--------- --------- ----------
10.00 Total obligations............... 497
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 497
23.95 New obligations................... -497
----------------------------------------------------------------------------

New budget authority (gross), detail:
60.05 Appropriation (indefinite)........ 523
68.00 Spending authority from offsetting
collections: Change to
offsetting collections (cash)... -26
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 497
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 New obligations................... 497
73.20 Total outlays (gross)............. -497
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 497
----------------------------------------------------------------------------

[[Page 563]]

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Change to recoveries on
defaults...................... 26
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 523
90.00 Outlays........................... 523
---------------------------------------------------------------------------

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4072-2-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
32.0 Land and structures............... -19
33.0 Investments and loans............. 449
44.0 Repayment to financing account.... 67
--------- --------- ----------
99.9 Total obligations............... 497
---------------------------------------------------------------------------

Housing for the Elderly or Handicapped Fund Liquidating Account

Program and Financing (in millions of dollars)

Obligations by program activity:
Capital investment:

00.01 Housing for the elderly or
handicapped loans............. 3 14
00.02 Maintenance security and
collateral.................... 2 4 4
--------- --------- ----------
00.91 Capital Investment, Subtotal.. 5 18 4
01.01 Operating expenses: Interest on
borrowings...................... 572 435 361
--------- --------- ----------
10.00 Total obligations............... 577 453 365
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 315 462 760
22.00 New budget authority (gross)...... 722 751 751
22.10 Resources available from
recoveries of prior year
obligations..................... 2
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 1,039 1,213 1,511
23.95 New obligations................... -577 -453 -365
24.90 Unobligated balance available, end
of year: Fund balance........... 462 760 1,146
----------------------------------------------------------------------------

New budget authority (gross), detail:
60.05 Appropriation (indefinite)........ 805 735 881
60.47 Portion applied to debt reduction. -805 -735 -881
--------- --------- ----------
63.00 Appropriation (total)...........
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 722 751 751
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 722 751 751
----------------------------------------------------------------------------

Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Fund balance. 390 425 251
73.10 New obligations................... 577 453 365
73.20 Total outlays (gross)............. -540 -627 -439
73.45 Adjustments in unexpired accounts. -2
74.90 Unpaid obligations, end of year:
Obligated balance: Fund balance. 425 251 176
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 540 627 439
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -722 -751 -751
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -182 -124 -311
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4115-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 8,331 8,306 8,424
1231 Disbursements: Direct loan
disbursements................... 2 189
1251 Repayments: Repayments and
prepayments..................... -71 -71 -72
1264 Write-offs for default: Other
adjustments, net................ 44
--------- --------- ----------
1290 Outstanding, end of year........ 8,306 8,424 8,352
---------------------------------------------------------------------------
Note.--Amounts for direct loan obligations reflect reservations of
section 202 funds. Loan obligations shown under the program and
financing schedule reflect loans that have reached the initial closing
stage of processing.

The Housing for the Elderly or Handicapped Fund was established
pursuant to section 202 of the Housing Act of 1959, as amended. The fund
provided direct loans to nonprofit organizations building and managing
housing projects for lower income persons who are elderly or disabled.

Projects must include an assured range of necessary services for the
occupants of such projects. In addition, the section 8 lower income
housing assistance payments program has been used in conjunction with
the section 202 program. Applications under the two programs have been
processed simultaneously.

The data included in these schedules represent direct loan
activities funded under the Housing for the Elderly or Handicapped Loan
Fund. Further, activities in support of the needs of the elderly and
disabled have been carried out under a grant program funded in the 1991
Appropriations Act (P.L. 101-507) and authorized in the National
Affordable Housing Act (P.L. 101-625).

After April 1, 1992, all projects for which there were
administrative reservations converted to the capital advance assistance
program.

For FY 1998, funding is being requested for assistance on behalf of
the elderly and disabled under the Housing for Special Populations
Account.

The program and financing schedule for this account summarizes the
Federal government's obligations for this loan program. The amounts
reflected in the following summary of administrative commitments reflect
outstanding section 202 fund reservations, whereas, the obligations
portion of the program and financing schedule reflects commitments which
have reached the initial loan closing stage of processing.

SUMMARY OF ADMINISTRATIVE COMMITMENTS

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Program by activities:
Capital investment:
Administrative commitments,
start of year................. 17 14
Recovery of prior year
obligations................... 4
Administrative commitments, end
of year....................... -14
------------------------------------
Subtotal, capital investment-
loan obligations............ 3 14
Other expenses (Fee inspection).
Capital investment:
Loan obligations................ 3 14
Maintenance security and
collateral...................... 2 4 4
------------------------------------
Total capital investment...... 5 18 4
====================================

Financing.--Repayments and interest income from loans continue to be
available to pay for commitments of the fund.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4115-0-3-371 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 672 700 680 679
0102 Expense........................... -551 -573 -439 -364
------------ -------------- ------------ -------------
0109 Net income or loss (-)............ 121 127 241 315
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4115-0-3-371 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 705 887 1,011 1,322
1206 Non-Federal assets: Receivables,
net............................. 167 83

[[Page 564]]

Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 8,331 8,306 8,424 8,353
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -18 -20 -20 -20
1604 Direct loans and interest
receivable, net............... 8,313 8,286 8,404 8,333
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 8,313 8,286 8,404 8,333
1901 Other Federal assets: Other assets -7 1
------------ -------------- ------------ -------------
1999 Total assets.................... 9,178 9,257 9,415 9,655
LIABILITIES:
Federal liabilities:

2102 Interest payable................ 275 291 222 184
2104 Resources payable to Treasury... 142 8 8 8
2207 Non-Federal liabilities: Other.... 7,714 6,909 6,174 5,293
------------ -------------- ------------ -------------
2999 Total liabilities............... 8,131 7,208 6,404 5,485
NET POSITION:
3100 Appropriated capital.............. 1,183 2,021 2,756 3,637
3300 Cumulative results of operations.. -137 28 256 534
------------ -------------- ------------ -------------
3999 Total net position.............. 1,046 2,049 3,011 4,170
------------ -------------- ------------ -------------
4999 Total liabilities and net position 9,177 9,257 9,416 9,656
-----------------------------------------------------------------------------------------------

Object Classification (in millions of dollars)

Nonprofit Sponsor Assistance Liquidating Account

Program and Financing (in millions of dollars)

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 6 6 6
23.95 New obligations...................
24.90 Unobligated balance available, end
of year: Fund balance........... 6 6 6
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4042-0-3-604 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 1 1 1
--------- --------- ----------
1290 Outstanding, end of year........ 1 1 1
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, this account
records, for this program, all cash flows to and from the Government
resulting from direct loans obligated prior to 1992. This account is
shown on a cash basis.

The Nonprofit Sponsor Assistance fund provided interest-free loans
to nonprofit organizations to plan housing projects to be financed under
the section 202 housing for the elderly or disabled program.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4042-0-3-604 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 6 6 6 6
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 1 1 1 1
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -1 -1 -1 -1
------------ -------------- ------------ -------------
1999 Total assets.................... 6 6 6 6
NET POSITION:
3300 Cumulative results of operations.. 6 6 6 6
------------ -------------- ------------ -------------
3999 Total net position.............. 6 6 6 6
------------ -------------- ------------ -------------
4999 Total liabilities and net position 6 6 6 6
-----------------------------------------------------------------------------------------------

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

Federal Funds

The Housing and Urban Development Act of 1968 authorized the
Government National Mortgage Association (Ginnie Mae) to guarantee the
timely payment of principal and interest on privately issued securities
that are backed by pools of FHA, Veterans Affairs (VA) and Rural Housing
Service mortgages. The Ginnie Mae guarantee gives lenders access to the
capital markets for funds to originate new loans. New FHA and VA loans
are currently pooled into Ginnie Mae securities.

Financing.--Ginnie Mae issuers are assessed commitment, guarantee
and other fees to cover costs incurred by Ginnie Mae and to fund a
reserve against possible future payments under the guarantee.

Operating results.--Fee collections, interest, and other income are
expected to exceed expenses by $23 million and $60 million in 1997 and
1998 respectively.

Management and Liquidating Functions Fund

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4016-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.91 Unobligated balance available,
start of year: U.S. Securities:
Par value....................... 15
22.40 Capital transfer to general fund.. -15
--------- --------- ----------
23.90 Total budgetary resources
available for obligation......
23.95 New obligations...................
24.91 Unobligated balance available, end
of year: U.S. Securities: Par
value...........................
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority.......................
86.98 Outlays from permanent balances...
--------- --------- ----------
87.00 Total outlays (gross)...........
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................
---------------------------------------------------------------------------

Budget program.--The remaining $15 million portfolio in the
Management and Liquidating Functions Fund was redeemed at par value plus
accrued interest on January 1, 1996, on which date interest ceased.
Debentures and interest earned of $15.4 million was transferred to the
Treasury Department.

[[Page 565]]

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4016-0-3-371 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 1
0102 Expense...........................
------------ -------------- ------------ -------------
0109 Net income or loss (-)............ 1
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1104 Federal assets: Agency
securities, par............... 15
------------ -------------- ------------ -------------
1999 Total assets.................... 15
NET POSITION:
3300 Cumulative results of operations.. 15
------------ -------------- ------------ -------------
3999 Total net position.............. 15
------------ -------------- ------------ -------------
4999 Total liabilities and net position 15
-----------------------------------------------------------------------------------------------

Credit accounts:

Guarantees of Mortgage-Backed Securities Loan Guarantee Program Account

(includes transfer of funds)

During fiscal year [1997] 1998, new commitments to issue guarantees
to carry out the purposes of section 306 of the National Housing Act, as
amended (12 U.S.C. 1721(g)), shall not exceed [$110,000,000,000]
$130,000,000,000.
For administrative expenses necessary to carry out the guaranteed
mortgage-backed securities program, $9,383,000, to be derived from the
Ginnie Mae-guarantees of mortgage-backed securities guaranteed loan
receipt account, of which not to exceed $9,383,000 shall be transferred
to the appropriation for salaries and expenses.
[During fiscal year 1996 and in addition to commitments previously
provided, additional commitments to issue guarantees to carry out
section 306 of the National Housing Act, as amended (12 U.S.C. 1721(g)),
shall not exceed $20,000,000,000.] (Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies Appropriations
Act, 1997.)

Unavailable Collections (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0186-0-1-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Balance, start of year:
01.99 Balance, start of year............
Receipts:
02.01 Guarantees of mortgage backed
securities guarantee loans,
negative subsidies.............. 9 9 81
Appropriation:
05.01 Guarantees of mortgage-backed
securities loan guarantee
program account................. -9 -9 -9
07.99 Total balance, end of year........ 72
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
10.00 Total obligations (object class
25.2)........................... 9 9 9
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 9 9 9
23.95 New obligations................... -9 -9 -9
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.25 Appropriation (special fund,
indefinite)..................... 9 9 9
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 New obligations................... 9 9 9
73.20 Total outlays (gross)............. -9 -9 -9
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 9 9 9
86.93 Outlays from current balances.....
--------- --------- ----------
87.00 Total outlays (gross)........... 9 9 9
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 9 9 9
90.00 Outlays........................... 9 9 9
---------------------------------------------------------------------------

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0186-0-1-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Guaranteed loan levels supportable by subsidy
budget authority:
2159 Total loan guarantee levels....... 130,000 110,000 130,000
Guaranteed loan subsidy (in percent):
2320 Subsidy rate...................... 0.00 0.00 -0.32
Guaranteed loan subsidy budget authority:
2339 Total subsidy budget authority.... -9 -9 -9
Guaranteed loan subsidy outlays:
2349 Total subsidy outlays............. -9 -9 -9
---------------------------------------------------------------------------

The schedule above reflects new methodology under credit reform for
GNMA. During transition to the new methodology, negative subsidy will
not match disbursement from the GNMA financing account to the GNMA
receipt account.

As required by the Federal Credit Reform Act of 1990, this account
records the administrative expenses of this program. The administrative
expenses are estimated on a cash basis.

Guarantees of Mortgage-Backed Securities Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Payment to receipt account for
administration.................. 9 9 9
00.02 Payment to receipt account for
negative subsidy................ 45
00.03 Payment to receipt account for
multi-class savings proposals... 27
00.04 Operating expenses................ 15
00.05 Capital investment................ 6
--------- --------- ----------
10.00 Total obligations (object class
25.2)......................... 9 9 102
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 99 127 150
22.00 New financing authority (gross)... 37 32 102
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 136 159 252
23.95 New obligations................... -9 -9 -102
24.90 Unobligated balance available, end
of year: Fund balance........... 127 150 150
----------------------------------------------------------------------------

New financing authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 37 32 102
----------------------------------------------------------------------------

Change in unpaid obligations:
72.47 Unpaid obligations, start of year:
Obligated balance: Authority to
borrow.......................... -6
73.10 New obligations................... 9 9 102
73.20 Total financing disbursements
(gross)......................... -3 -9 -102
74.47 Unpaid obligations, end of year:
Obligated balance: Authority to
borrow..........................
87.00 Total financing disbursements
(gross)......................... 3 9 102
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
88.25 Interest on uninvested funds.. -8 -2 -2
88.40 Non-Federal sources:
Commitment and other fees... -29 -30 -100
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -37 -32 -102
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............

[[Page 566]]

90.00 Financing disbursements........... -35 -23
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4240-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........
1232 Disbursements: Purchase of loans
assets from the public.......... 5
1252 Repayments: Proceeds from loan
asset sales to the public or
discounted...................... -5
--------- --------- ----------
1290 Outstanding, end of year........
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4240-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders......... 130,000 110,000 130,000
2112 Uncommitted loan guarantee
limitation...................... -20,000
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 110,000 110,000 130,000
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........
2231 Disbursements of new guaranteed
loans........................... 75,799
2251 Repayments and prepayments........
--------- --------- ----------
2290 Outstanding, end of year........ 75,799
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year..
---------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4240-0-3-371 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 93 127 137 149
1206 Non-Federal assets: Receivables,
net............................. 6 105
------------ -------------- ------------ -------------
1999 Total assets.................... 99 127 137 254
NET POSITION:
3300 Cumulative results of operations.. 99 127 137 254
------------ -------------- ------------ -------------
3999 Total net position.............. 99 127 137 254
-----------------------------------------------------------------------------------------------
Note.--GNMA guarantees the timely payment of principal and interest
installments on securities which are backed by FHA-insured, FmHA-
insured, and VA-guaranteed mortgages. Such guarantees are excluded from
the Government total of guaranteed obligations duplicating FHA, FmHA,
and VA guarantees.

Guarantees of Mortgage-Backed Securities Liquidating Account

Program and Financing (in millions of dollars)

Obligations by program activity:
Operating expenses:

00.02 Functional services............. 12 13 13
00.03 Default expenses................ 8 9 8
00.04 Servicing expenses.............. 9 10 10
00.05 Other expenses.................. 15 20 19
00.06 REMIC expenses.................. 4 5 6
--------- --------- ----------
00.91 Total operating expenses...... 48 57 56
Capital investment:

01.01 Advances of guaranty payments... 129 145 111
01.02 Real estate owned properties.... 13 13 12
--------- --------- ----------
01.91 Total capital investment...... 142 158 123
--------- --------- ----------
10.00 Total obligations............... 190 215 179
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

21.90 Treasury balance................ 87 82 52
U.S. Securities:
Par value:
21.91 Par value................... 4,211 4,762 5,341
21.91 Par value (REMICs).......... -17
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 4,281 4,844 5,393
22.00 New budget authority (gross)...... 753 765 735
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 5,034 5,609 6,128
23.95 New obligations................... -190 -215 -179
Unobligated balance available, end of year:

24.90 Fund balance.................... 82 52 45
24.91 U.S. Securities: Par value...... 4,762 5,341 5,903
--------- --------- ----------
24.99 Total unobligated balance, end
of year....................... 4,844 5,393 5,948
----------------------------------------------------------------------------

New budget authority (gross), detail:
Spending authority from offsetting
collections:

Offsetting collections (cash):
68.00 Offsetting collections (cash). 742 743 714
68.00 Spending authority from
offsetting collections
(REMICs).................... 11 22 21
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 753 765 735
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 753 765 735
----------------------------------------------------------------------------

Change in unpaid obligations:
72.47 Unpaid obligations, start of year:
Obligated balance: Orders on
hand from Federal sources....... -87 -78 -48
73.10 New obligations................... 190 215 179
73.20 Total outlays (gross)............. -181 -185 -173
74.47 Unpaid obligations, end of year:
Obligated balance: Orders on
hand from Federal Sources....... -78 -48 -41
----------------------------------------------------------------------------

Outlays (gross), detail:
86.98 Outlays from permanent balances... 181 185 173
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
88.20 Interest on U.S. securities... -264 -261 -277
Non-Federal sources:
88.40 Guarantee fees.............. -305 -311 -297
88.40 Repayments of guaranteed
payments.................. -120 -130 -102
88.40 Commitment and other fees... -17 -28 -27
88.40 Servicing income............ -16 -16 -15
88.40 Receipts from sale of REO
properties and mobile home
units..................... -11 -11 -10
88.40 Repayments on mortgages..... -12
88.40 Sale of servicing rights.... -8 -8 -7
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -753 -765 -735
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -571 -580 -562
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4238-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 333 321 327
1232 Disbursements: Purchase of loans
assets from the public.......... 128 144 111
1252 Repayments: Proceeds from loan
asset sales to the public or
discounted...................... -140 -138 -109
--------- --------- ----------
1290 Outstanding, end of year........ 321 327 329
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

[[Page 567]]

2231 Disbursements of new guaranteed
loans........................... 101,540 79,560
2251 Repayments and prepayments........ -67,955 -43,660 -45,465
--------- --------- ----------
2290 Outstanding, end of year........ 497,433 533,333 487,868
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 497,433 503,333 487,868
---------------------------------------------------------------------------

Budget Program.--Program activity is summarized below:

Mortgage-backed Securities

[In millions of dollars]

1996 actual 1997 est. 1998 est.
Commitment limitation............... 130,000 110,000 *
Commitments issued.................. 110,000 110,000 *
Guarantees issued................... 101,540 79,560 *
Securities outstanding.............. 497,423 533,333 *

* 1998 figures are reflected in the GNMA financing account.

Operating results.--Fee collections, interest, and other income are
expected to exceed expenses by $570 million in 1996 and $570 million in
1997 and 1998, respectively. These amounts will be retained to cover
future year expenses and as a reserve against losses that may be
incurred on guarantees.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 86-4238-0-3-371 1995 actual 1996 actual 1997 est. 1998 est.
-----------------------------------------------------------------------------------------------
Revenue:
0101 Revenue........................... 514 576 602 602
0101 Revenue (REMICs).................. 13 11 22 21
Expense:
0102 Expense........................... -46 -96 -52 -51
0102 Expense (REMICs).................. -4 -4 -2 -2
Net income or loss (-):
------------ -------------- ------------ -------------
0109 Net income or loss (-).......... 468 480 550 551
------------ -------------- ------------ -------------
0109 Net income or loss (-) (REMICs). 9 7 20 19
------------ -------------- ------------ -------------
0199 Net income or loss................ 477 487 570 570
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

1101 Fund balances with Treasury..... 4 4 4
Investments in US securities:
1102 Treasury securities, par...... 4,232 4,785 5,341 5,903
1104 Agency securities, par........ 1
1106 Receivables, net.............. 59 60 60 64
1206 Non-Federal assets: Receivables,
net............................. 26 28 28 27
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 333 321 327 329
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -241 -288 -163 -162
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 92 33 164 167
1801 Other Federal assets: Cash and
other monetary assets........... 4 5 5 6
------------ -------------- ------------ -------------
1999 Total assets.................... 4,414 4,915 5,602 6,171
LIABILITIES:
Non-Federal liabilities:

2201 Accounts payable................ 29 36 45 53
2207 Other........................... 534 473 471 471
------------ -------------- ------------ -------------
2999 Total liabilities............... 563 509 516 524
NET POSITION:
3300 Cumulative results of operations.. 3,851 4,406 5,085 5,647
------------ -------------- ------------ -------------
3999 Total net position.............. 3,851 4,406 5,085 5,647
------------ -------------- ------------ -------------
4999 Total liabilities and net position 4,414 4,915 5,601 6,171
-----------------------------------------------------------------------------------------------
Note.--Ginnie Mae guarantees the timely payment of principal and
interest installments on securities which are backed by FHA-insured,
FmHA-insured, and VA-guaranteed mortgages. Such guarantees are excluded
from the Government total of guaranteed obligations duplicating FHA,
FmHA, and VA guarantees.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4238-0-3-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
25.2 Other services.................... 48 57 56
33.0 Investments and loans............. 142 158 123
99.0 Subtotal, reimbursable obligations 190 215 179
--------- --------- ----------
99.9 Total obligations............... 190 215 179
---------------------------------------------------------------------------

POLICY DEVELOPMENT AND RESEARCH

Federal Funds

General and special funds:

Research and Technology

For contracts, grants, and necessary expenses of programs of
research and studies relating to housing and urban problems, not
otherwise provided for, as authorized by title V of the Housing and
Urban Development Act of 1970, as amended (12 U.S.C. 1701z-1 et seq.),
including carrying out the functions of the Secretary under section
1(a)(1)(i) of Reorganization Plan No. 2 of 1968, [$34,000,000]
$39,000,000, to remain available until September 30, [1998] 1999.
(Departments of Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct program.................... 33 36 39
--------- --------- ----------
10.00 Total obligations............... 33 36 39
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 1 2
22.00 New budget authority (gross)...... 34 34 39
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 35 36
23.95 New obligations................... -33 -36 -39
24.40 Unobligated balance available, end
of year: Uninvested balance..... 2
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 34 34 39
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 28 25 29
73.10 New obligations................... 33 36 39
73.20 Total outlays (gross)............. -36 -32 -37
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 25 29 31
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 14 14 16
86.93 Outlays from current balances..... 22 18 21
--------- --------- ----------
87.00 Total outlays (gross)........... 36 32 37
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 34 34 39
90.00 Outlays........................... 36 32 37
---------------------------------------------------------------------------

The Housing and Urban Development Act of 1970 directs the Secretary
to undertake programs of research, studies, testing, and demonstrations
related to the HUD mission. These functions are carried out internally
and through contracts with industry, nonprofit research organizations,
and educational institutions, and through agreements with State and
local governments and other Federal agencies.

In 1998, the research program will focus on activities to support
the reinvention of HUD, including examination of issues such as the
transformation of public housing and design of standards for
performance-based funds. National housing surveys and research to reduce
the cost of housing will continue in 1998.

[[Page 568]]

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0108-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
25.2 Other services.................... 29 32 34
41.0 Grants, subsidies, and
contributions................... 4 4 5
--------- --------- ----------
99.9 Total obligations............... 33 36 39
---------------------------------------------------------------------------

FAIR HOUSING AND EQUAL OPPORTUNITY

Federal Funds

General and special funds:

Fair Housing Activities

For contracts, grants, and other assistance, not otherwise provided
for, as authorized by title VIII of the Civil Rights Act of 1968, as
amended by the Fair Housing Amendments Act of 1988, and section 561 of
the Housing and Community Development Act of 1987, as amended,
[$30,000,000] $39,000,000, to remain available until September 30,
[1998] 1999, of which [$15,000,000] $24,000,000 shall be to carry out
activities pursuant to such section 561. [No funds made available under
this heading shall be used to lobby the executive or legislative
branches of the Federal Government in connection with a specific
contract, grant or loan.] (Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies Appropriations Act,
1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0144-0-1-751 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Fair housing assistance........... 11 19 15
00.02 Fair housing initiatives.......... 9 24 24
--------- --------- ----------
10.00 Total obligations (object class
41.0)......................... 20 43 39
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 3 13
22.00 New budget authority (gross)...... 30 30 39
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 33 43 39
23.95 New obligations................... -20 -43 -39
24.40 Unobligated balance available, end
of year: Uninvested balance..... 13
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.00 Appropriation..................... 30 30 39
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 44 32 51
73.10 New obligations................... 20 43 39
73.20 Total outlays (gross)............. -32 -24 -27
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 32 51 63
----------------------------------------------------------------------------

Outlays (gross), detail:
86.93 Outlays from current balances..... 32 24 27
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 30 30 39
90.00 Outlays........................... 32 24 27
---------------------------------------------------------------------------

The Budget proposes an appropriation of $39 million in 1998 for fair
housing activities to aid in eliminating housing discrimination. Of the
amount requested, $15 million is for the Fair Housing Assistance program
and $24 million is for the Fair Housing Initiatives program.

The Fair Housing Assistance program, authorized by title VIII of the
Civil Rights Act of 1968 as amended, provides funding to State and local
agencies to assure prompt and effective processing of title VIII (Civil
Rights Act of 1968) complaints.

The Fair Housing Initiatives program, authorized by the Housing and
Community Development Act of 1987, as amended by the Housing and
Community Development Act of 1992, provides support to public and
private organizations for the purpose of eliminating or preventing
discrimination in housing and for enhancing fair housing opportunities.

MANAGEMENT AND ADMINISTRATION

Federal Funds

General and special funds:

Salaries and Expenses

(including transfer of funds)

For necessary administrative and non-administrative expenses of the
Department of Housing and Urban Development, not otherwise provided for,
including not to exceed $7,000 for official reception and representation
expenses, [$976,840,000, of which $15,000,000 may be used for additional
retraining, relocation, permanent change of station, and other
activities related to downsizing only upon submission of a detailed and
specific, multi-year downsizing plan to the Committees on Appropriations
of the House of Representatives and the Senate, and] [$955,471,000,]
$1,005,826,000 of which $544,443,000 shall be provided from the various
funds of the Federal Housing Administration, $9,383,000 shall be
provided from funds of the Government National Mortgage Association, and
[$675,000] $1,000,000 shall be provided from the Community Development
Grants Program account. (Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0143-0-1-999 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
Direct program:

00.01 Housing, mortgage credit,
regulatory and energy
conservation.................. 94 95 121
00.02 Community planning and
development programs.......... 59 60 61
00.03 Equal opportunity and research
programs...................... 59 59 60
00.04 Departmental management, legal
and audit services............ 51 51 52
00.05 Field direction and
administration................ 154 155 157
--------- --------- ----------
00.91 Total direct program.......... 417 420 451
01.01 Reimbursable program.............. 546 557 555
--------- --------- ----------
10.00 Total obligations............... 963 977 1,006
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 1
22.00 New budget authority (gross)...... 965 977 1,006
22.30 Unobligated balance expiring...... -4
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 962 977 1,006
23.95 New obligations................... -963 -977 -1,006
24.40 Unobligated balance available, end
of year: Uninvested balance.....
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 420 420 451
40.75 Reduction pursuant to P.L. 104-
134........................... -1
--------- --------- ----------
43.00 Appropriation (total)......... 419 420 451
Permanent:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 546 557 555
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 965 977 1,006
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 112 136 136
73.10 New obligations................... 963 977 1,006
73.20 Total outlays (gross)............. -928 -977 -998
73.40 Adjustments in expired accounts... -11 -8
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 136 136 136
----------------------------------------------------------------------------

[[Page 569]]

Outlays (gross), detail:
86.90 Outlays from new current authority 321 324 347
86.93 Outlays from current balances..... 61 96 96
86.97 Outlays from new permanent
authority....................... 546 557 555
--------- --------- ----------
87.00 Total outlays (gross)........... 928 977 998
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -546 -557 -555
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 419 420 451
90.00 Outlays........................... 382 420 443
---------------------------------------------------------------------------

This appropriation finances all salaries and related costs
associated with administering the programs of the Department of Housing
and Urban Development, including: housing and mortgage credit programs;
community planning and development programs; equal opportunity,
research, regulatory and insurance programs; departmental management,
and legal services; and, field direction and administration.

Object Classification (in millions of dollars)

Direct obligations:

Personnel compensation:
11.1 Full-time permanent........... 223 222 217
11.3 Other than full-time permanent 4 4 4
11.5 Other personnel compensation.. 5 5 5
--------- --------- ----------
11.9 Total personnel compensation 232 231 226
12.1 Civilian personnel benefits..... 49 49 47
13.0 Benefits for former personnel... 1 1 1
21.0 Travel and transportation of
persons....................... 6 7 11
22.0 Transportation of things........ 3 2
23.1 Rental payments to GSA.......... 32 33 34
23.3 Communications, utilities, and
miscellaneous charges......... 10 13 15
24.0 Printing and reproduction....... 3 3 3
25.1 Advisory and assistance services 13 10 25
25.2 Other services.................. 2 2 2
25.3 Purchases of goods and services
from Government accounts...... 54 53 71
25.4 Operation and maintenance of
facilities.................... 6 6 6
25.7 Operation and maintenance of
equipment..................... 1
26.0 Supplies and materials.......... 3 3 3
31.0 Equipment....................... 6 4 4
42.0 Insurance claims and indemnities 1 1
--------- --------- ----------
99.0 Subtotal, direct obligations.. 417 420 451
99.0 Reimbursable obligations.......... 546 557 555
--------- --------- ----------
99.9 Total obligations............... 963 977 1,006
---------------------------------------------------------------------------

Personnel Summary

1001 Full-time equivalent employment. 4,565 4,491 4,443
1005 Full-time equivalent of overtime
and holiday hours............. 24 24 25
Reimbursable:
Total compensable workyears:

2001 Full-time equivalent employment. 5,977 5,956 5,518
2005 Full-time equivalent of overtime
and holiday hours............. 32 32 31
---------------------------------------------------------------------------

Office of Inspector General

(including transfer of funds)

For necessary expenses of the Office of Inspector General in
carrying out [the provisions of] the Inspector General Act of 1978, as
amended, [$52,850,000] $57,850,000, of which $11,283,000 shall be
provided from the various funds of the Federal Housing Administration
and [$5,000,000] $10,000,000 shall be provided from the amount earmarked
for Operation Safe Home in the Drug Elimination Grants for Low Income
Housing Account. (Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1997.)

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-0189-0-1-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------

Obligations by program activity:
00.01 Direct program.................... 36 37 37
01.01 Reimbursable program.............. 12 16 21
--------- --------- ----------
10.00 Total obligations............... 48 53 58
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 49 53 58
23.95 New obligations................... -48 -53 -58
----------------------------------------------------------------------------

New budget authority (gross), detail:
Current:

40.00 Appropriation................... 37 37 37
Permanent:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 12 16 21
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 49 53 58
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 10 18 18
73.10 New obligations................... 48 53 58
73.20 Total outlays (gross)............. -40 -53 -58
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 18 18 18
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 23 28 28
86.93 Outlays from current balances..... 5 9 9
86.97 Outlays from new permanent
authority....................... 12 16 21
--------- --------- ----------
87.00 Total outlays (gross)........... 40 53 58
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -12 -16 -21
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 37 37 37
90.00 Outlays........................... 28 37 37
---------------------------------------------------------------------------

This appropriation provides agency-wide audit and investigative
functions to identify and correct management and administrative
deficiencies that create conditions for existing or potential instances
of fraud, waste and mismanagement. The audit function provides internal
audit, contract audit, and inspection services. Contract audits provide
professional advice to agency contracting officials on accounting and
financial matters relative to negotiation, award, administration,
repricing, and settlement of contracts. Internal audits review and
evaluate all facets of agency operations. Inspection services provide
detailed technical evaluations of agency operations. The investigative
function provides for the detection and investigation of improper and
illegal activities involving programs, personnel, and operations.

Object Classification (in millions of dollars)

Direct obligations:

Personnel compensation:
11.1 Full-time permanent........... 20 21 21
11.5 Other personnel compensation.. 2 2 2
--------- --------- ----------
11.9 Total personnel compensation 22 23 23
12.1 Civilian personnel benefits..... 5 5 5
21.0 Travel and transportation of
persons....................... 2 3 3
23.1 Rental payments to GSA.......... 4 3 3
25.1 Advisory and assistance services 1 1 1
25.2 Other services.................. 1 1
25.3 Purchases of goods and services
from Government accounts...... 1 1 1
25.7 Operation and maintenance of
equipment..................... 1
--------- --------- ----------
99.0 Subtotal, direct obligations.. 36 37 37
99.0 Reimbursable obligations.......... 12 16 21
--------- --------- ----------

[[Page 570]]

99.9 Total obligations............... 48 53 58
---------------------------------------------------------------------------

Personnel Summary

1001 Full-time equivalent employment. 372 376 367
1005 Full-time equivalent of overtime
and holiday hours............. 1 1 1
Reimbursable:
2001 Total compensable workyears: Full-
time equivalent employment...... 120 167 214
---------------------------------------------------------------------------

Office of Federal Housing Enterprise Oversight

salaries and expenses

For carrying out the Federal Housing Enterprise Financial Safety and
Soundness Act of 1992, [$15,500,000] including not to exceed $3,000 for
official reception and representation expenses, $16,312,000, to remain
available until expended, from the Federal Housing Enterprise Oversight
Fund: Provided, That [such amounts shall be collected by the Director as
authorized by section 1316(a) and (b) of such Act and deposited in the
Fund under section 1316(f).] not to exceed such amount shall be
available from the General Fund of the Treasury to the extent necessary
to incur obligations and make expenditures pending the receipt of
collections to the Fund: Provided further, That the General Fund amount
shall be reduced as collections are received during the fiscal year so
as to result in a final appropriation from the General Fund estimated at
not more than $0. (Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1997.)

Unavailable Collections (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-5272-0-2-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Balance, start of year:
01.99 Balance, start of year............ 2 2 2
Receipts:
02.01 Office of federal housing
enterprise oversight............ 13 16 16
--------- --------- ----------
04.00 Total: Balances and collections... 15 18 18
Appropriation:
05.01 Office of federal housing
enterprise oversight............ -15 -16 -16
07.99 Total balance, end of year........ 2 2 2
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
10.00 Total obligations................. 15 16 16
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... 2
22.00 New budget authority (gross)...... 15 16 16
22.30 Unobligated balance expiring...... -2
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 15 16 16
23.95 New obligations................... -15 -16 -16
24.40 Unobligated balance available, end
of year: Uninvested balance.....
----------------------------------------------------------------------------

New budget authority (gross), detail:
40.20 Appropriation (special fund,
definite)....................... 15 16 16
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 6 7 6
73.10 New obligations................... 15 16 16
73.20 Total outlays (gross)............. -14 -16 -16
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 7 6 6
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new current authority 14 16 16
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 15 16 16
90.00 Outlays........................... 14 16 16
---------------------------------------------------------------------------

This appropriation funds the Office of Federal Housing Enterprise
Oversight (the Office), which was established in 1992 to regulate the
financial safety and soundness of the two housing Government Sponsored
Enterprises (GSEs)--the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation. The Office was authorized in the
Federal Housing Enterprise Safety and Soundness Act of 1992, which also
instituted a risk-based capital standard for the GSEs, and gave the
regulator enhanced authority to enforce those standards. The office is
also required by statute to conduct on-site annual examinations at the
GSEs to determine the condition of each enterprise for the purpose of
ensuring their financial safety and soundness.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-5272-0-2-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Personnel
Compensation.................... 6 7 7
12.1 Civilian personnel benefits....... 2 2 2
23.1 Rental payments to GSA............ 2 2 2
25.2 Other services.................... 5 5 5
--------- --------- ----------
99.9 Total obligations............... 15 16 16
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 86-5272-0-2-371 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 66 78 78
---------------------------------------------------------------------------

Intragovernmental funds:

Working Capital Fund

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Operating expenses: Data
processing services............. 196 217 257
00.03 Capital investment: Data
processing services............. 2 2 2
--------- --------- ----------
10.00 Total obligations............... 198 219 259
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.90 Unobligated balance available,
start of year: Fund balance..... 31 32 33
22.00 New budget authority (gross)...... 198 219 259
22.10 Resources available from
recoveries of prior year
obligations..................... 1 1
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 230 252 292
23.95 New obligations................... -198 -219 -259
24.90 Unobligated balance available, end
of year: Fund balance........... 32 33 33
----------------------------------------------------------------------------

New budget authority (gross), detail:
Spending authority from offsetting
collections:

68.00 Offsetting collections (cash)... 183 219 259
68.10 Change in orders on hand from
Federal sources............... 14
68.15 Adjustment to orders on hand
from Federal sources.......... 1
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total)..................... 198 219 259
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 198 219 259
----------------------------------------------------------------------------

[[Page 571]]

Change in unpaid obligations:
Unpaid obligations, start of year:

72.90 Obligated balance: Fund balance. -1 -3 -3
72.95 Orders on hand from Federal
sources....................... 10 24 24
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 9 21 21
73.10 New obligations................... 198 219 259
73.20 Total outlays (gross)............. -185 -219 -259
73.45 Adjustments in unexpired accounts. -1 -1
Unpaid obligations, end of year:

Obligated balance:
74.40 Appropriation.................
74.90 Fund balance.................. -3 -3 -3
74.95 Orders on hand from Federal
sources....................... 24 24 24
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 21 21 21
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 185 219 259
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -183 -219 -259
88.95 Change in orders on hand from
Federal sources................. -14
88.96 Adjustment to orders on hand from
Federal sources................. -1
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 2
---------------------------------------------------------------------------

The Working Capital Fund, authorized by the Department of Housing
and Urban Development Act of 1965, finances information technology and
office automation initiatives which can be performed more efficiently on
a centralized basis. The fund is financed from fees charged for services
performed.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 86-4586-0-4-451 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 18 18 19
12.1 Civilian personnel benefits....... 3 4 4
21.0 Travel and transportation of
persons......................... 1 1 1
23.3 Communications, utilities, and
miscellaneous charges........... 45 53 50
25.2 Other services.................... 94 125 169
26.0 Supplies and materials............ 5 3 1
31.0 Equipment......................... 32 15 15
--------- --------- ----------
99.9 Total obligations............... 198 219 259
---------------------------------------------------------------------------

Personnel Summary

Administrative Provisions

Sec. 201. Extenders.--(a) Public Housing Funding Flexibility.--
Section 201(a)(2) of the Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act, 1996 is
amended by striking [``1996''] ``1997'' and inserting [``1997'']
``1998''.
(b) One-for-One Replacement of Public and Indian Housing.--Section
1002(d) of Public Law 104-19 is amended by striking [``before September
30, 1996''] ``1997'' and inserting [``on or before September 30, 1997'']
``1998''.
(c) Public and Assisted Housing Rents, Income Adjustments, and
Preferences.--(1)[(A)] Section 402(a) of The Balanced Budget Downpayment
Act, I is amended[--]
[(i)] by striking ``[effective for fiscal year 1996 and no
later than October 30, 1995'' and inserting ``and subsection (f) of
this section, effective for] fiscal year 1997''[;], and inserting
``fiscal year 1998.''
[(ii) in paragraphs (1), (2), and (4), by striking ``not less
than $25, and may require a minimum monthly rent of''; and
(iii) in paragraph (3), by striking ``not less than $25 for the
unit, and may require a minimum monthly rent of''.
(B) Section 230 of Public Law 104-134 is hereby repealed.]
(2) Section 402(f) of The Balanced Budget Downpayment Act, I is
amended by striking [``fiscal year 1996'' and inserting] ``fiscal years
1996 and 1997'' and inserting ``fiscal years 1996, 1997, and 1998''.
(d) Applicability to IHAs.--In accordance with section 201(b)(2) of
the United States Housing Act of 1937, the amendments made by
subsections (a), (b), and (c) shall apply to public housing developed or
operated pursuant to a contract between the Secretary of Housing and
Urban Development and an Indian housing authority.
(e) Streamlining Section 8 Tenant-Based Assistance.--Section 203(d)
of the Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1996 is
amended by striking [``fiscal year 1996'' and inserting] ``fiscal years
1996 and 1997'' and inserting ``fiscal year 1996, 1997, and 1998.''
(f) Section 8 Fair Market Rentals [and Delay in Reissuance.]--[(1)]
The first sentence of section 403(a) of the Balanced Budget Downpayment
Act, I, is amended by striking [``1996''] ``1997'' and inserting
[``1997''] ``1998''.
[(2) Section 403(c) of such Act is amended--
(A) by striking ``fiscal year 1996'' and inserting ``fiscal
years 1996 and 1997''; and
(B) by inserting before the semicolon the following: ``for
assistance made available during fiscal year 1996 and October 1,
1997 for assistance made available during fiscal year 1997''.]
(g) Section 8 Rent Adjustments.--Section 8(c)(2)(A) of the United
States Housing Act of 1937 is amended--
(1) in the third sentence, by striking ``fiscal year 1997'' and
inserting ``fiscal years 1997 and 1998'';
(2) in the last sentence, by striking ``fiscal year 1997'' and
inserting ``fiscal year 1997 and 1998''.
[(1) in the third sentence by inserting ``, fiscal year 1996
prior to April 26, 1996, and fiscal year 1997'' after ``1995'';
(2) in the fourth sentence, by striking ``For'' and inserting
``Except for assistance under the certificate program, for'';
(3) after the fourth sentence, by inserting the following new
sentence: ``In the case of assistance under the certificate program,
0.01 shall be subtracted from the amount of the annual adjustment
factor (except that the factor shall not be reduced to less than
1.0), and the adjusted rent shall not exceed the rent for a
comparable unassisted unit of similar quality, type, and age in the
market area.''; and
(4) in the last sentence, by--
(A) striking ``sentence'' and inserting ``two sentences'';
and
(B) inserting ``, fiscal year 1996 prior to April 26, 1996,
and fiscal year 1997'' after ``1995''.]
Sec. 202. Section 8 Administrative Fees.--Section 202(a)(1)(A) of
the Departments of Veterans Affairs and Housing and Urban Development,
and Independent Agencies Appropriations Act, 1997, is amended by--
(1) striking ``7.5 percent'' and inserting ``7.65 percent'';
(2) striking ``a program of'' and inserting ``one or more such
programs totaling''; and
(3) inserting before the final period, ``of such total units.''
The amendments made by this section shall take effect on October 1,
1997. [Administrative Fees.--Notwithstanding section 8(q) of the
United States Housing Act of 1937, as amended--
(a) The Secretary shall establish fees for the cost of administering
the certificate, voucher and moderate rehabilitation programs.
(1)(A) For fiscal year 1997, the fee for each month for which a
dwelling unit is covered by an assistance contract shall be 7.5
percent of the base amount, adjusted as provided herein, in the case
of an agency that, on an annual basis, is administering a program of
no more than 600 units, and 7 percent of the base amount, adjusted
as provided herein, for each additional unit above 600.
(B) The base amount shall be the higher of--
(i) the fair market rental for fiscal year 1993 for a 2-
bedroom existing rental dwelling unit in the market area of the
agency; and
(ii) such fair market rental for fiscal year 1994, but not
more than 103.5 percent of the amount determined under clause
(i).
(C) The base amount shall be adjusted to reflect changes in the
wage data or other objectively measurable data that reflect the
costs of administering the program during fiscal year 1996; except
that the Secretary may require that the base amount be not less than
a minimum amount and not more than a maximum amount.

[[Page 572]]

(2) For subsequent fiscal years, the Secretary shall publish a
notice in the Federal Register, for each geographic area,
establishing the amount of the fee that would apply for the agencies
administering the program, based on changes in wage data or other
objectively measurable data that reflect the cost of administering
the program, as determined by the Secretary.
(3) The Secretary may increase the fee if necessary to reflect
higher costs of administering small programs and programs operating
over large geographic areas.
(4) The Secretary may decrease the fee for PHA-owned units.
(b) Beginning in fiscal year 1997 and thereafter, the Secretary
shall also establish reasonable fees (as determined by the Secretary)
for--
(1) the costs of preliminary expenses, in the amount of $500,
for a public housing agency, but only in the first year it
administers a tenant-based assistance program under the United
States Housing Act of 1937 and only if, immediately before the
effective date of this Act, it was not administering a tenant-based
assistance program under the 1937 Act (as in effect immediately
before the effective date of this Act), in connection with its
initial increment of assistance received;
(2) the costs incurred in assisting families who experience
difficulty (as determined by the Secretary) in obtaining appropriate
housing under the program; and
(3) extraordinary costs approved by the Secretary.]
[Sec. 203. Single Family Assignment Program.--Section 407(c) of the
Balanced Budget Downpayment Act, I (12 U.S.C. 1710 note), is amended by
striking ``October 1, 1996'' and inserting ``October 1, 1997''.]
[Sec. 204. Flexible Authority.--During fiscal year 1997 and fiscal
years thereafter, the Secretary may manage and dispose of multifamily
properties owned by the Secretary and multifamily mortgages held by the
Secretary on such terms and conditions as the Secretary may determine,
notwithstanding any other provision of law.]
[Sec. 205. Use of Available Funding for Homeownership.--Up to
$20,000,000 of amounts of unobligated balances that are or become
available from the Nehemiah Housing Opportunity Grant program, repealed
under section 289(b) of the Cranston-Gonzalez National Affordable
Housing Act, Public Law 101-625, shall be available for use for
activities relating to promotion and implementation of homeownership in
targeted geographic areas, as determined by the Secretary. Any grant or
assistance made under this section shall be made in accordance with
section 102 of the Department of Housing and Urban Development Reform
Act of 1989 on a competitive basis.]
[Sec. 206. Debt Forgiveness.--The Secretary of Housing and Urban
Development shall cancel the indebtedness of the Greene County Rural
Health Center relating to a loan received under the Public Facility Loan
program to establish the health center (Loan #Mis-22-PFL0096). The
Greene County Rural Health Center is hereby relieved of all liability to
the Federal Government for such loan and any fees and charges payable in
connection with such loan.]
[Sec. 207. Flexible Subsidy Fund.--From the fund established by
section 236(g) of the National Housing Act, as amended, all uncommitted
balances of excess rental charges as of September 30, 1996, and any
collection during fiscal year 1997, shall be transferred, as authorized
under such section, to the fund authorized under section 201(j) of the
Housing and Community Development Amendments of 1978, as amended.]
[Sec. 208. Rental Housing Assistance.--The limitation otherwise
applicable to the maximum payments that may be required in any fiscal
year by all contracts entered into under section 236 of the National
Housing Act (12 U.S.C. 1715z-1) is reduced in fiscal year 1997 by not
more than $2,000,000 in uncommitted balances of authorizations provided
for this purpose in appropriations Acts.]
[Sec. 209. D.C. Modernization Funding.--Notwithstanding the
provisions of section 14(k)(5)(D) of the United States Housing Act of
1937, the withheld modernization funds that became credited in fiscal
years 1993, 1994, and 1995, due to the troubled status of the former
Department of Public and Assisted Housing of the District of Columbia,
shall be made available without diminution to its successor, the
District of Columbia Housing Authority, at such time between the
effective date of this Act and the end of fiscal year 1998 as the
District of Columbia Housing Authority is no longer deemed ``mod-
troubled'' under section 6(j)(2)(A)(i) of such Act; after fiscal year
1998, the District of Columbia Housing Authority shall become subject to
the provisions of section 14(k)(5)(D) of such Act should it remain mod-
troubled.]
Sec. [210. (a)] 203. Financing Adjustment Factors.--Fifty per centum
of the amounts of budget authority, or in lieu thereof 50 per centum of
the cash amounts associated with such budget authority, that are
recaptured from projects described in section 1012(a) of the Stewart B.
McKinney Homeless Assistance Amendments Act of 1988 (Public Law 100-
628, 102 Stat. 3224, 3268) shall be rescinded, or in the case of cash,
shall be remitted to the Treasury, and such amounts of budget authority
or cash recaptured and not rescinded or remitted to the Treasury shall
be used by State housing finance agencies or local governments or local
housing agencies with projects approved by the Secretary of Housing and
Urban Development for which settlement occurred after January 1, 1992,
in accordance with such section.
[(b) In addition to amounts otherwise provided by this Act, $464,442
is appropriated to the Department of Housing and Urban Development for
payment to the Utah Housing Finance Agency, in lieu of amounts lost to
such agency in bond refinancings during 1994, for its use in accordance
with subsection (a).]
Sec. 204. Section 8 Contract Renewals.--Section 405(a) of the
Balanced Budget Downpayment Act, I is amended by inserting at the end
the following new sentences:
``Notwithstanding the preceding sentence, upon the expiration of a
contract with rent levels that exceed the section 8 Existing Fair Market
Rents, if the Secretary determines that (i) the primary financing or
mortgage insurance for the multifamily housing project that is covered
by that expiring contract was provided by a public agency and the
financing does not involve mortgage insurance under the National Housing
Act, or (ii) the project is a section 202 project or a section 515
project, the Secretary may, at the request of the owner and, in the case
of projects under clause (i), the public agency, provide assistance
under section 8 at rent levels that are equal to those under the
expiring contract as of the date on which the contract expires, which
assistance shall be in accordance with terms and conditions prescribed
by the Secretary.''.
[Sec. 211. Section 8 Contract Renewal Authority.--(a) Definitions.--
For purposes of this section--
(1) the term ``expiring contract'' means a contract for project-
based assistance under section 8 of the United States Housing Act of
1937 that expires during fiscal year 1997;
(2) the term ``family'' has the same meaning as in section 3(b) of
the United States Housing Act of 1937;
(3) the term ``multifamily housing project'' means a property
consisting of more than 4 dwelling units that is covered in whole or in
part by a contract for project-based assistance under section 8 of the
United States Housing Act of 1937;
(4) the term ``owner'' has the same meaning as in section 8(f) of
the United States Housing Act of 1937;
(5) the term ``project-based assistance'' means rental assistance
under section 8 of the United States Housing Act of 1937 that is
attached to a multifamily housing project;
(6) the term ``public agency'' means a State housing finance
agency, a local housing agency, or other agency with a public purpose
and status;
(7) the term ``Secretary'' means the Secretary of Housing and Urban
Development; and
(8) the term ``tenant-based assistance'' has the same meaning as in
section 8(f) of the United States Housing Act of 1937.
(b) Section 8 Contract Renewal Authority.--
(1) In general.--Notwithstanding section 405(a) of the Balanced
Budget Downpayment Act, I, upon the request of the owner of a
multifamily housing project that is covered by an expiring contract,
the Secretary shall use amounts made available for the renewal of
assistance under section 8 of the United States Housing Act of 1937
to renew the expiring contract as project-based assistance for a
period of not more than one year, at rent levels that are equal to
those under the expiring contract as of the date on which the
contract expires: Provided, That those rent levels do not exceed 120
percent of the fair market rent for the market area in which the
project is located. For an FHA-insured multifamily housing project
with an expiring contract at rent levels that exceed 120 percent of
the fair market rent for the market area, the Secretary shall
provide, at the request of the owner, section 8 project-based
assistance, for a period of not more than one year, at rent levels
that do not exceed 120 percent of the fair market rent.

[[Page 573]]

(2) Exemption for state and local housing agency projects.--
Notwithstanding paragraph (1), upon the expiration of a contract
with rent levels that exceed the percentage described in that
paragraph, if the Secretary determines that the primary financing or
mortgage insurance for the multifamily housing project that is
covered by that expiring contract was provided by a public agency,
the Secretary shall, at the request of the owner and the public
agency, renew the expiring contract--
(A) for a period of not more than one year; and
(B) at rent levels that are equal to those under the
expiring contract as of the date on which the contract expires.
(3) Section 202, section 811, and section 515 projects.--
Notwithstanding paragraph (1), for section 202 projects, section 811
projects and section 515 projects, upon the expiration of a section
8 contract, the Secretary shall, at the request of the owner, renew
the expiring contract--
(A) for a period of not more than one year; and
(B) at rent levels that are equal to those under the
expiring contract as of the date on which the contract expires.
(4) Other contracts.--
(A) Participation in demonstration.--For a contract covering
an FHA-insured multifamily housing project that expires during
fiscal year 1997 with rent levels that exceed the percentage
described in paragraph (1) and after notice to the tenants, the
Secretary shall, at the request of the owner of the project and
after notice to the tenants, include that multifamily housing
project in the demonstration program under section 212 of this
Act. The Secretary shall ensure that a multifamily housing
project with an expiring contract in fiscal year 1997 shall be
allowed to be included in the demonstration.
(B) Effect of material adverse actions and omissions.--
Notwithstanding paragraph (1) or any other provision of law, the
Secretary shall not renew an expiring contract if the Secretary
determines that the owner of the multifamily housing project has
engaged in material adverse financial or managerial actions or
omissions with regard to the project (or with regard to other
similar projects if the Secretary determines that such actions
or omissions constitute a pattern of mismanagement that would
warrant suspension or debarment by the Secretary).
(C) Transfer of property.--For properties disqualified from the
demonstration program because of actions by an owner or purchaser in
accordance with subparagraph (B), the Secretary shall establish
procedures to facilitate the voluntary sale or transfer of the
property, with a preference for tenant organizations and tenant-
endorsed community-based nonprofit and public agency purchasers
meeting such reasonable qualifications as may be established by the
Secretary. The Secretary may include the transfer of section 8
project-based assistance.
(5) Tenant protections.--Any family residing in an assisted
unit in a multifamily housing project that is covered by an
expiring contract that is not renewed, shall be offered tenant-
based assistance before the date on which the contract expires
or is not renewed.]
[Sec. 212. FHA Multifamily Demonstration Authority.--
(a) In General.--
(1) Repeal.--
(A) In general.--Section 210 of the Departments of Veterans
Affairs and Housing and Urban Development and Independent Agencies
Appropriations Act, 1996 (110 Stat. 1321) is repealed.
(B) Exception.--Notwithstanding the repeal under subparagraph
(A), amounts made available under section 210(f) the Departments of
Veterans Affairs and Housing and Urban Development and Independent
Agencies Appropriations Act, 1996 shall remain available for the
demonstration program under this section through the end of fiscal
year 1997.
(2) Savings provisions.--Nothing in this section shall be construed
to affect any commitment entered into before the date of enactment of
this Act under the demonstration program under section 210 of the
Departments of Veterans Affairs and Housing and Urban Development and
Independent Agencies Appropriations Act, 1996.
(3) Definitions.--For purposes of this section--
(A) the term ``demonstration program'' means the program
established under subsection (b);
(B) the term ``expiring contract'' means a contract for
project-based assistance under section 8 of the United States
Housing Act of 1937 that expires during fiscal year 1997;
(C) the term ``family'' has the same meaning as in section 3(b)
of the United States Housing Act of 1937;
(D) the term ``multifamily housing project'' means a property
consisting of more than 4 dwelling units that is covered in whole or
in part by a contract for project-based assistance;
(E) the term ``owner'' has the same meaning as in section 8(f)
of the United States Housing Act of 1937;
(F) the term ``project-based assistance'' means rental
assistance under section 8 of the United States Housing Act of 1937
that is attached to a multifamily housing project;
(G) the term ``Secretary'' means the Secretary of Housing and
Urban Development; and
(H) the term ``tenant-based assistance'' has the same meaning
as in section 8(f) of the United States Housing Act of 1937.
(b) Demonstration Authority.--
(1) In general.--Subject to the funding limitation in subsection
(l), the Secretary shall administer a demonstration program with
respect to multifamily projects--
(A) whose owners agree to participate;
(B) with rents on units assisted under section 8 of the
United States Housing Act of 1937 that are, in the aggregate, in
excess of 120 percent of the fair market rent of the market area
in which the project is located; and
(C) the mortgages of which are insured under the National
Housing Act.
(2) Purpose.--The demonstration program shall be designed to
obtain as much information as is feasible on the economic viability
and rehabilitation needs of the multifamily housing projects in the
demonstration, to test various approaches for restructuring
mortgages to reduce the financial risk to the FHA Insurance Fund
while reducing the cost of section 8 subsidies, and to test the
feasibility and desirability of--
(A) ensuring, to the maximum extent practicable, that the
debt service and operating expenses, including adequate
reserves, attributable to such multifamily projects can be
supported at the comparable market rent with or without mortgage
insurance under the National Housing Act and with or without
additional section 8 rental subsidies;
(B) utilizing section 8 rental assistance, while taking into
account the capital needs of the projects and the need for
adequate rental assistance to support the low- and very low-
income families residing in such projects; and
(C) preserving low-income rental housing affordability and
availability while reducing the long-term cost of section 8
rental assistance.
(c) Goals.--
(1) In general.--The Secretary shall carry out the demonstration
program in a manner that will protect the financial interests of the
Federal Government through debt restructuring and subsidy reduction
and, in the least costly fashion, address the goals of--
(A) maintaining existing affordable housing stock in a
decent, safe, and sanitary condition;
(B) minimizing the involuntary displacement of tenants;
(C) taking into account housing market conditions;
(D) encouraging responsible ownership and management of
property;
(E) minimizing any adverse income tax impact on property
owners; and
(F) minimizing any adverse impacts on residential
neighborhoods and local communities.
(2) Balance of competing goals.--In determining the manner in
which a mortgage is to be restructured or a subsidy reduced under
this subsection, the Secretary may balance competing goals relating
to individual projects in a manner that will further the purposes of
this section.
(d) Participation Arrangements.--
(1) In general.--In carrying out the demonstration program, the
Secretary may enter into participation arrangements with designees,
under which the Secretary may provide for the assumption by
designees (by delegation, by contract, or otherwise) of some or all
of the functions, obligations, responsibilities and benefits of the
Secretary.
(2) Designees.--In entering into any arrangement under this
subsection, the Secretary shall select state housing finance
agencies, housing agencies or nonprofits (separately or in
conjunction with each other) to act as designees to the extent such
agencies are determined to be qualified by the Secretary. In
locations where there is no qualified State housing finance agency,
housing agency or nonprofit to act as a designee, the Secretary may
act as a designee. Each participation arrangement entered into under
this

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subsection shall include a designee as the primary partner. Any
organization selected by the Secretary under this section shall have
a long-term record of service in providing low-income housing and
meet standards of fiscal responsibility, as determined by the
Secretary.
(3) Designee partnerships.--For purposes of any participation
arrangement under this subsection, designees are encouraged to
develop partnerships with each other, and to contract or subcontract
with other entities, including--
(A) public housing agencies;
(B) financial institutions;
(C) mortgage servicers;
(D) nonprofit and for-profit housing organizations;
(E) the Federal National Mortgage Association;
(F) the Federal Home Loan Mortgage Corporation;
(G) Federal Home Loan Banks; and
(H) other State or local mortgage insurance companies or
bank lending consortia.
(e) Long-Term Affordability.--
(1) In general.--After the renewal of a section 8 contract
pursuant to a restructuring under this section, the owner shall
accept each offer to renew the section 8 contract, for a period of
20 years from the date of the renewal under the demonstration, if
the offer to renew is on terms and conditions, as agreed to by the
Secretary or designee and the owner under a restructuring.
(2) Affordability requirements.--Except as otherwise provided by
the Secretary, in exchange for any mortgage restructuring under this
section, a project shall remain affordable for a period of not less
than 20 years. Affordability requirements shall be determined in
accordance with guidelines established by the Secretary or designee.
The Secretary or designee may waive these requirements for good
cause.
(f) Procedures.--
(1) Notice of participation in demonstration.--Not later than 45
days before the date of expiration of an expiring contract (or such
later date, as determined by the Secretary, for good cause), the
owner of the multifamily housing project covered by that expiring
contract shall notify the Secretary or designee and the residents of
the owner's intent to participate in the demonstration program.
(2) Demonstration contract.--Upon receipt of a notice under
paragraph (1), the owner and the Secretary or designee shall enter
into a demonstration contract, which shall provide for initial
section 8 project-based rents at the same rent levels as those under
the expiring contract or, if practical, the budget-based rent to
cover debt service, reasonable operating expenses (including
reasonable and appropriate services), and a reasonable return to the
owner, as determined solely by the Secretary. The demonstration
contract shall be for the minimum term necessary for the rents and
mortgages of the multifamily housing project to be restructured
under the demonstration program, but shall not be for a period of
time to exceed 180 days, unless extended for good cause by the
Secretary.
(g) Project-Based Section 8.--The Secretary shall renew all expiring
contracts under the demonstration as section 8 project-based contracts,
for a period of time not to exceed one year, unless otherwise provided
under subsection (h).
(h) Demonstration Actions.--
(1) Demonstration actions.--For purposes of carrying out the
demonstration program, and in order to ensure that contract rights
are not abrogated, subject to such third party consents as are
necessary (if any), including consent by the Government National
Mortgage Association if it owns a mortgage insured by the Secretary,
consent by an issuer under the mortgage-backed securities program of
the Association, subject to the responsibilities of the issuer to
its security holders and the Association under such program, and
consent by parties to any contractual agreement which the Secretary
proposes to modify or discontinue, the Secretary or, except with
respect to subparagraph (B), designee, subject to the funding
limitation in subsection (l), shall take not less than one of the
actions specified in subparagraphs (G), (H), and (I) and may take
any of the following actions:
(A) Removal of restrictions.--
(i) In general.--Consistent with the purposes of this
section, subject to the agreement of the owner of the
project and after consultation with the tenants of the
project, the Secretary or designee may remove, relinquish,
extinguish, modify, or agree to the removal of any mortgage,
regulatory agreement, project-based assistance contract, use
agreement, or restriction that had been imposed or required
by the Secretary, including restrictions on distributions of
income which the Secretary or designee determines would
interfere with the ability of the project to operate without
above-market rents.
(ii) Accumulated residual receipts.--The Secretary or
designee may require an owner of a property assisted under
the section 8 new construction/substantial rehabilitation
program under the United States Housing Act of 1937 to apply
any accumulated residual receipts toward effecting the
purposes of this section.
(B) Reinsurance.--With respect to not more than 5,000 units
within the demonstration during fiscal year 1997, the Secretary
may enter into contracts to purchase reinsurance, or enter into
participations or otherwise transfer economic interest in
contracts of insurance or in the premiums paid, or due to be
paid, on such insurance, on such terms and conditions as the
Secretary may determine. Any contract entered into under this
paragraph shall require that any associated units be maintained
as low-income units for the life of the mortgage, unless waived
by the Secretary for good cause.
(C) Participation by third parties.--The Secretary or
designee may enter into such agreements, provide such
concessions, incur such costs, make such grants (including
grants to cover all or a portion of the rehabilitation costs for
a project) and other payments, and provide other valuable
consideration as may reasonably be necessary for owners,
lenders, servicers, third parties, and other entities to
participate in the demonstration program. The Secretary may
establish performance incentives for designees.
(D) Section 8 administrative fees.--Notwithstanding any
other provision of law, the Secretary may make fees available
from the section 8 contract renewal appropriation to a designee
for contract administration under section 8 of the United States
Housing Act of 1937 for purposes of any contract restructured or
renewed under the demonstration program.
(E) Full or partial payment of claim.--Notwithstanding any
other provision of law, the Secretary may make a full payment of
claim or partial payment of claim prior to default.
(F) Credit enhancement.--
(i) In general.--The Secretary or designee may provide
FHA multifamily mortgage insurance, reinsurance, or other
credit enhancement alternatives, including retaining the
existing FHA mortgage insurance on a restructured first
mortgage at market value or using the multifamily risk-
sharing mortgage programs, as provided under section 542 of
the Housing and Community Development Act of 1992. Any
limitations on the number of units available for mortgage
insurance under section 542 shall not apply to insurance
issued for purposes of the demonstration program.
(ii) Maximum percentage.--During fiscal year 1997, not
more than 25 percent of the units in multifamily housing
projects with expiring contracts in the demonstration, in
the aggregate, may be restructured without FHA insurance,
unless otherwise agreed to by the owner of a project.
(iii) Credit subsidy.--Any credit subsidy costs of
providing mortgage insurance shall be paid from amounts made
available under subsection (l).
(G) Mortgage restructuring.--
(i) In general.--The Secretary or designee may
restructure mortgages to provide a restructured first
mortgage to cover debt service and operating expenses
(including a reasonable rate of return to the owner) at the
market rent, and a second mortgage equal to the difference
between the restructured first mortgage and the mortgage
balance of the eligible multifamily housing project at the
time of restructuring.
(ii) Credit subsidy.--Any credit subsidy costs of
providing a second mortgage shall be paid from amounts made
available under subsection (l).
(H) Debt forgiveness.--The Secretary or designee, for good
cause and at the request of the owner of a multifamily housing
project, may forgive at the time of the restructuring of a
mortgage any portion of a debt on the project that exceeds the
market value of the project.
(I) Budget-based rents.--The Secretary or designee may renew
an expiring contract, including a contract for a project

[[Page 575]]

in which operating costs exceed comparable market rents, for a
period of not more than one year, at a budget-based rent that
covers debt service, reasonable operating expenses (including
all reasonable and appropriate services), and a reasonable rate
of return to the owner, as determined solely by the Secretary,
provided that the contract does not exceed the rent levels under
the expiring contract. The Secretary may establish a preference
under the demonstration program for budget-based rents for
unique housing projects, such as projects designated for
occupancy by elderly families and projects in rural areas.
(J) Section 8 tenant-based assistance.--For not more than 10
percent of units in multifamily housing projects that have had
their mortgages restructured in any fiscal year under the
demonstration, the Secretary or designee may provide, with the
agreement of an owner and in consultation with the tenants of
the housing, section 8 tenant-based assistance for some or all
of the assisted units in a multifamily housing project in lieu
of section 8 project-based assistance. Section 8 tenant-based
assistance may only be provided where the Secretary determines
and certifies that there is adequate available and affordable
housing within the local area and that tenants will be able to
use the section 8 tenant-based assistance successfully.
(2) Offer and acceptance.--Notwithstanding any other provision
of law, an owner of a project in the demonstration must accept any
reasonable offer made by the Secretary or a designee under this
subsection. An owner may appeal the reasonableness of any offer to
the Secretary and the Secretary shall respond within 30 days of the
date of appeal with a final offer. If the final offer is not
acceptable, the owner may opt out of the program.
(i) Community and Tenant Input.--In carrying out this section, the
Secretary shall develop procedures to provide appropriate and timely
notice, including an opportunity for comment and timely access to all
relevant information, to officials of the unit of general local
government affected, the community in which the project is situated, and
the tenants of the project.
(j) Transfer of Property.--The Secretary shall establish procedures
to facilitate the voluntary sale or transfer of multifamily housing
projects under the demonstration to tenant organizations and tenant-
endorsed community-based nonprofit and public agency purchasers meeting
such reasonable qualifications as may be established by the Secretary.
(k) Limitation on Demonstration Authority.--The Secretary shall
carry out the demonstration program with respect to mortgages not to
exceed 50,000 units.
(l) Funding.--In addition to the $30,000,000 made available under
section 210 of the Departments of Veterans Affairs and Housing and Urban
Development and Independent Agencies Appropriations Act, 1996 (110 Stat.
1321), for the costs (including any credit subsidy costs associated with
providing direct loans or mortgage insurance) of modifying and
restructuring loans held or guaranteed by the Federal Housing
Administration, as authorized under this section, $10,000,000 is hereby
appropriated, to remain available until September 30, 1998.
(m) Report to Congress.--
(1) In general.--
(A) Quarterly reports.--Not less than every 3 months, the
Secretary shall submit to the Congress a report describing and
assessing the status of the projects in the demonstration
program.
(B) Final report.--Not later than 6 months after the end of
the demonstration program, the Secretary shall submit to the
Congress a final report on the demonstration program.
(2) Contents.--Each report submitted under paragraph (1)(A)
shall include a description of--
(A) each restructuring proposal submitted by an owner of a
multifamily housing project, including a description of the
physical, financial, tenancy, and market characteristics of the
project;
(B) the Secretary's evaluation and reasons for each
multifamily housing project selected or rejected for
participation in the demonstration program;
(C) the costs to the FHA General Insurance and Special Risk
Insurance funds;
(D) the subsidy costs provided before and after
restructuring;
(E) the actions undertaken in the demonstration program,
including the third-party arrangements made; and
(F) the demonstration program's impact on the owners of the
projects, including any tax consequences.
(3) Contents of final report.--The report submitted under
paragraph (1)(B) shall include--
(A) the required contents under paragraph (2); and (B) any
findings and recommendations for legislative action.]
[Sec. 213. Hawaiian Home Lands.--Section 282 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12832) is amended by
adding at the end the following new sentence: ``The Secretary may waive
this section in connection with the use of funds made available under
this title on lands set aside under the Hawaiian Homes Commission Act,
1920 (42 Stat. 108).''.]
[Sec. 214. Uses of Certain Assisted Housing Amounts.--(a) Transfer
Authority.--The Secretary may transfer recaptured section 8 amounts from
the Annual Contributions for Assisted Housing account under Public Law
104-134 (approved April 26, 1996; 110 Stat. 1321, 1321-265) and prior
laws to the accounts and for the purposes set forth in subsection (b).
The amounts transferred under this section shall be made available for
use as prescribed under this section notwithstanding section 8(bb) of
the United States Housing Act of 1937.
(b) Receiving Accounts.--
(1) Prevention of resident displacement.--The Secretary may
transfer to the Prevention of Resident Displacement account an
amount up to $50,000,000, in addition to amounts in such account,
that may be used to extend, under existing terms and conditions,
existing project-based section 8 contracts in effect before a Plan
of Action was approved, so that these contracts expire 5 years from
the date on which funds were obligated for the Plan of Action
approved under the Low-Income Housing Preservation and Resident
Homeownership Act of 1990 or the Emergency Low Income Housing
Preservation Act of 1987. The Secretary shall transfer all amounts
that the Secretary determines to be necessary for fiscal year 1997
for the purposes of this paragraph before transferring any amounts
under any other paragraph in this subsection.
(2) HOPWA.--The Secretary may transfer to the Housing
Opportunities for Persons with AIDS account up to $25,000,000, for
use in addition to amounts appropriated in such account.]
[Sec. 215. Requirement for HUD To Maintain Public Notice and Comment
Rulemaking.--The Secretary of Housing and Urban Development shall
maintain all current requirements under part 10 of the Department of
Housing and Urban Development's regulations (24 CFR part 10) with
respect to the Department's policies and procedures for the promulgation
and issuance of rules, including the use of public participation in the
rulemaking process.]
[Sec. 216. Community Development Block Grants.--Section 102(a)(6)(D)
of the Housing and Community Development Act of 1974 (42 U.S.C.
5302(a)(6)(D)) is amended--
(1) in clause (iv), by striking ``or'' at the end;
(2) in clause (v), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following new clause:
``(vi) has entered into a local cooperation agreement with
a metropolitan city that received assistance under section 106
because of such classification, and has elected under paragraph
(4) to have its population included with the population of the
county for the purposes of qualifying as an urban county, except
that to qualify as an urban county under this clause, the county
must--
``(I) have a combined population of not less than
210,000, excluding any metropolitan city located in the
county that is not relinquishing its metropolitan city
classification, according to the 1990 decennial census of
the Bureau of the Census of the Department of Commerce;
``(II) including any metropolitan cities located in the
county, have had a decrease in population of 10,061 from
1992 to 1994, according to the estimates of the Bureau of
the Census of the Department of Commerce; and
``(III) have had a Federal naval installation that was
more than 100 years old closed by action of the Base Closure
and Realignment Commission appointed for 1993 under the Base
Closure and Realignment Act of 1990, directly resulting in a
loss of employment by more than 7,000 Federal Government
civilian employees and more than 15,000 active duty military
personnel, which naval installation was located within one
mile of an enterprise community designated by the Secretary
pursuant to section 1391 of the Internal Revenue Code of
1986, which enterprise community has a population of not
less than 20,000, according to the 1990 decennial census of
the Bureau of the Census of the Department of Commerce.''.]

[[Page 576]]

[Sec. 217. Fair Housing and Free Speech.--None of the amounts made
available under this Act may be used during fiscal year 1997 to
investigate or prosecute under the Fair Housing Act any otherwise lawful
activity engaged in by one or more persons, including the filing or
maintaining of a nonfrivolous legal action, that is engaged in solely
for the purpose of achieving or preventing action by a government
official or entity, or a court of competent jurisdiction.]
[Sec. 218. Account Transition.--The amounts of obligated balances in
appropriations accounts, as set forth in title II of the Departments of
Veterans Affairs and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1996 and prior Acts that are recaptured
hereafter, to the extent not governed by the specific language in an
account or provision in this Act, shall be held in reserve subject to
reprogramming, notwithstanding any other provision of law.]
[Sec. 219. Treatment of Certain Properties.--Notwithstanding any
other provision of law, rehabilitation activities undertaken in projects
using the Low-Income Housing Tax Credit allocated to developments in the
city of New Brunswick, New Jersey, in 1991, are deemed to have met the
requirements for rehabilitation in accordance with clause (ii) of the
third sentence of section 8(d)(2)(A) of the United States Housing Act of
1937, as in effect before the date of the enactment of this Act.]
[Sec. 220. Amendment Relating to Community Development Assistance.--
Section 105(a) of the Housing and Community Development Act of 1974 (42
U.S.C. 5305(a)(8)) is amended by striking ``through 1997'' and inserting
``through 1998''.]
[Sec. 221. Section 236 Program Amendments.--(a) Section 236(f)(1) of
the National Housing Act (12 U.S.C. 1715z-1), as amended by section
405(d)(1) of The Balanced Budget Downpayment Act, I, and by section
228(a) of The Balanced Budget Downpayment Act, II, is amended--
(1) in the second sentence, by striking ``the lower of (i)'';
(2) in the second sentence, by striking ``or (ii) the fair
market rental established under section 8(c) of the United States
Housing Act of 1937 for the market area in which the housing is
located, or (iii) the actual rent (as determined by the Secretary)
paid for a comparable unit in comparable unassisted housing in the
market area in which the housing assisted under this section is
located,''; and
(3) by inserting after the second sentence the following:
``However, in the case of a project which contains more than 5,000
units, is subject to an interest reduction payments contract, and is
financed under a State or local program, the Secretary may reduce
the rental charge ceiling, but in no case shall the rent be below
basic rent. For plans of action approved for Capital Grants under
the Low-Income Housing Preservation and Resident Homeownership Act
of 1990 (LIHPRHA) or the Emergency Low Income Housing Preservation
Act of 1987 (ELIHPA), the rental charge for each dwelling unit shall
be at the basic rental charge or such greater amount, not exceeding
the lower of (i) the fair market rental charge determined pursuant
to this paragraph, or (ii) the actual rent paid for a comparable
unit in comparable unassisted housing in the market area in which
the housing assisted under this section is located, as represents 30
percent of the tenant's adjusted income, but in no case shall the
rent be below basic rent.''.
(b) Section 236(f) of the National Housing Act is amended by adding
the following new paragraph at the end:
``(7) The Secretary shall determine whether and under what
conditions the provisions of this subsection shall apply to
mortgages sold by the Secretary on a negotiated basis.''.
(c) Section 236(g) of the National Housing Act is amended to read
as follows:
``The project owner shall, as required by the Secretary, accumulate,
safeguard, and periodically pay the Secretary or such other entity as
determined by the Secretary and upon such terms and conditions as the
Secretary deems appropriate, all rental charges collected on a unit-by-
unit basis in excess of the basic rental charges. Unless otherwise
directed by the Secretary, such excess charges shall be credited to a
reserve fund to be used by the Secretary to make additional assistance
payments as provided in paragraph (3) of subsection (f). However, a
project owner with a mortgage project use if authorized by the Secretary
and upon such terms and conditions insured under this section may retain
some or all of such excess charges for project use if authorized by the
Secretary and upon such terms and conditions as established by the
Secretary.''.]
Sec. 205. Transfers Between Appropriations.--Not to exceed 2 percent
of any appropriation or earmarked amount made available for the current
fiscal year in this Act may be transferred between such appropriations
or earmarked amounts, but no such appropriations or earmarked amounts
shall be increased or decreased by more than 2 percent by any such
transfers. (Department of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1997.)