For the fourth consecutive year, President Obama’s proposed budget includes $1 billion at the initial capitalization for the NHTF. Again, the budget calls for the $1 billion to come from the mandatory side of the federal budget, which means it is not part of regular HUD appropriations. Although the budget documents refer to the Housing Trust Fund as “subject to PAYGO,” which means the funding must be offset by a spending cut or revenue raiser elsewhere in the budget, the budget documents do not identify a specific offset

The President included this same NHTF proposal in his housing plan released on February 1 (see Memo, 2/3). Administration officials have pledged to work with Congress and the NHTF Campaign to find an offset that Congress will approve this year.

The President’s FY13 budget proposal also included $15 billion for the Neighborhood Stabilization Program (NSP), again subject to PAYGO. This latest iteration of NSP is Project Build, which was part of the President’s American Jobs Act proposed in September 2011 (see Memo, 9/9/2011), as well as in the February 1 housing plan.

In other developments on the NHTF, both New Jersey Senators, Robert Menendez (D) and Frank Lautenberg (D) have recently become co-sponsors of S. 489, the bill introduced in March 2011by Senator Jack Reed (D-RI) that would provide $1 billion for NHTF from the sale of TARP warrants (see Memo, 3/4/2011). This brings the number of cosponsors in the Senate to 18. A companion bill, H.R. 1477, introduced in April 2011 by Representative Elijah Cummings (D-MD), now has 48 cosponsors. All the cosponsors in both the Senate and the House are Democrats.

In news from HUD, the final regulations for the NHTF are expected to be released this summer, as reported by HUD Assistant Secretary for Community Planning and Development Mercedes Marquez on a conference call to discuss the FY13 HUD budget. Comments on the proposed rule were submitted in December 2010 (see Memo, 1/7/2011).