The Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD) held a hearing on the health of the Federal Housing Administration (FHA) on June 4. The increase in FHA receipts that HUD has generated since the housing crisis began has been helpful to Congressional appropriators in maintaining the HUD budget in recent years. Subcommittee Chair Patty Murray (D-WA) expressed concerns about the FHA’s Mutual Mortgage Insurance (MMI) Fund and also said that “sequestration creates new challenges for the FHA.” She said she looks forward to Congress passing a “budget compromise.” Ranking Member Susan Collins (R-ME) said that while she believes that FHA should play a smaller role, that “there will always be a role for FHA to play in the market.” FHA Commissioner and Assistant Secretary for Housing Carol Galante testified that HUD is seeing strong results from its efforts to bolster the FHA MMI fund, but that HUD will still need an increase in commitment authority for FY13. Ms. Galante said that 75% of the FY13 budget authority has been exhausted to date. HUD Inspector General David Montoya expressed concerns about FHA’s financial management systems and HUD’s limited information technology capacity, issues that he has raised in the past before this Subcommittee as well as the House THUD Subcommittee. The next step for the Senate housing appropriations process is expected when the Senate Committee on Appropriations approves its 302(b) funding levels. The Committee is expected to release the allocations the week of June 17.While Congress moved forward with FY14 appropriations work, the Administration initiated its FY15 budget work the week of June 3. OMB issued instructions to federal agencies to prepare budget requests that are 10% below the agency’s net discretionary FY14 funding level.