The work plan discusses the fact residential foreclosures have mounted and the IRS has seen an increase in the number of exempt organizations involved in foreclosure assistance activities.  See page 11 of the IRS’s FY 2012 Work Plan available on the IRS website by clicking here.

In 2012, both the Determinations and Examinations offices in the EO division will focus on the activities of mortgage foreclosure assistance organizations to determine whether they are fulfilling their exempt purpose, and whether they are complying with the requirements of section 501(q) of the Internal Revenue Code (the “Code”).  Read additional intelligence from Venable LLP about this scrutiny by clicking here.

Section 501(q) of the Internal Revenue Code, added by the Pension Protection Act of 2006, establishes additional standards that a credit counseling organization must satisfy to qualify for exemption under section 501(c)(3) or 501(c)(4).  In 2010, the IRS Office of Chief Counsel issued a memorandum concluding that organizations that engage in housing counseling may be subject to Code section 501(q). Read more about the memorandum and its implications here.

Twenty-eight states approved ten-year state-level plans between 2002 and 2008.  ICPH conducted 49 phone interviews with government and nonprofit representatives involved in the development and implementation of these plans.  The plans were created in response to the federal priority of ending chronic homelessness in a decade, defined by HUD as “unaccompanied individuals with a disabling condition who have been homeless for more than one year or who have had four or more episodes of homelessness in the last three years.”

The ICPH report finds that 26 of the 28 state plans include other vulnerable populations, such as families with children.  Respondents justify focusing on a larger target population by noting that a more inclusive policy may be better suited to the demographics of the state’s homeless population.  Families with children constitute the fastest growing homeless population today, and interviewees expressed unanimous support for broad-based plans that include multiple target populations.  ICPH agrees that plans must be tailored to local demographics of the homeless.

ICPH identified the following five additional areas for improving current and future plans.

• The need to identify realistic and quantifiable action steps to assist stakeholders implementing the plan’s recommendations and to ensure that resources are used efficiently.
• ICPH also found that 15 states do not report or intend to report on their plan’s progress; of the remaining states, only 3 already make regular reports.  The authors recommend that annual progress reports be made for all state programs to create accountability and transparency; such reports could also track changing demographics or policies that should affect next steps.  Regular reports help ensure the plan remains a living document that is sensitive to changing macroeconomic conditions.
• Of course, even the most detailed plan requires ongoing support from people throughout the community to be successful.  Collaboration was reported as one of the top three factors influencing goal implementation.  The involvement of a wide range of stakeholders in an interagency council, including those who are not typically engaged in homelessness services, improves the services provided and creates a stronger network for addressing policy gaps.
• ICPH notes the importance of executive leadership in prioritizing plans for ending homelessness.  Meetings stall when decision-makers are absent, so the presence of agency directors is important.  Gubernatorial support is especially critical for setting homelessness as a policy priority.
• With much of the work shared across agencies, ICPH’s final recommendation is for the appointment of dedicated support personnel who can take responsibility for coordinating meetings, writing progress reports, procuring funding, and performing other administrative work.  These functions are essential for the plan’s success but may be neglected by council members whose primary responsibilities lie elsewhere.

To read the full report, click here.

• House and Senate budget resolutions.
• Deficit reduction efforts.
• The federal debt ceiling.
• FY12 appropriations for HUD and Rural Housing Service programs.

The NLIHC web page has a recording of the webinar, the webinar slide deck in PDF format, NLIHC’s HUD budget charts, and a fact sheet on the budget process: http://nlihc.org/template/page.cfm?id=28.

Also, the Coalition on Human Needs and the Community Action Partnership sponsored a webinar on proposals that impact a broader array of human services programs, e.g. Medicaid, Medicare, SNAP/food stamps, education, children’s services, and more.

The Coalition on Human Needs webinar on the budget process is available at http://www.chn.org/audio/110607StoptheSlashing.wmv. Handouts from Coalition on Human Needs webinar (PDF) are available at http://www.chn.org/pdf/2011/StoptheSlashingHandouts.pdf.

Also available are statements of principles from Strengthening America’s Values and Economy for All (SAVE for All) and the Campaign for Housing and Community Development Funding:

• SAVE for All Campaign Statement of Principles with Signers (PDF): http://www.chn.org/pdf/2011/StatementwithSigners.pdf
• Campaign for Housing and Community Development Funding (CHCDF) Principles (PDF): http://www.nlihc.org/doc/CHCDF-Deficit-Reduction-Housing-Comm-Dev-Funding.pdf

The first trip in March was sponsored by the NLIHC to attend the annual state partner meeting and Housing Policy Conference. IACED has long been a state partner of NLIHC. State partners are housing and homeless advocacy organizations, which can provide a local focus to national advocacy. Conversely, through the state partner relationship, IACED’s national policy advocacy is strengthened for affordable housing.

At the NLIHC state partner meeting, I had the opportunity to discuss comprehensive community development and the work of IACED members — Pathfinder Services, LaCasa, Inc., and Community Action of Northeast Indiana — to mobilize neighbors and build community in a holistic manner. It was  a rewarding back and forth about housing as a platform for basic safety and security, but also the fundamental elements of community which lead to an enriched quality of life. I had the good fortune to share the presentation with Shelby Mertes – Connecticut Partnership for Strong Communities, Jamie Ross – Florida Housing Coalition, Inc., and Rob Wiener – California Coalition for Rural Housing. Shelby discussed housing incentive zones and the HOMEConnecticut campaign. Jamie discussed how transit-oriented development and other community sustainability measures enhance the functionality of affordable housing. Read her article here (PDF). Rob discussed California’s Inclusionary Zone policies and the Inclusionary Housing Policy database.

An interesting fact presented at the Housing Policy Conference, based on analysis of the American Community Survey and various US Department of Housing and Urban Development (HUD) data sources by the Center on Budget and Policy Priorities, is that Indiana has 91,295 federally assisted housing units. Compare this number of units with the 175,315 low-income renters with housing costs exceeding 50 percent of their income for 2009. This gap requires a two pronged strategy to both raise incomes and develop additional affordable housing.

Released at the Summit was the NLIHC’s 2011 Advocates Guide (PDF) describing federal housing and community development programs and strategies for informing policy makers. All the workshop sessions were valuable. However, several were of particular interest. One session featured senior HUD officials discussed upcoming changes to the  Consolidated Plan (ConPlan) to make it more responsive to the needs of stakeholders through enhanced data and technology. The officials discussed the ConPlan Improvement Initiative discussed online here. Featured was the Greensboro, North Carolina ConPlan, which incorporates HUD’s sustainable communities principles into a holistic discussion of community need. Another session focused on the future of the federal housing finance system.  In the wake of the mortgage meltdown, the federal government took control of Fannie Mae and Freddie Mac, the two giant housing government sponsored enterprises (GSEs). Congress will have to decide the federal role in housing finance is going forward. The session featured senior US Treasury Department officials discussing a recently released “white paper” with its recommendations.

At the session, Jeff Foster from the Treasury Department described the findings in the government’s white paper including a need for more rental development, fundamental flaws in… Fannie Mae and Freddie Mac structure, and how the GSEs affordable housing goals were not effective. As IACED members understand, the white paper also found that the GSE housing policy goals were not the cause of the housing collapse. Following this session, Massachusetts Representative Barney Frank, Ranking Minority Member on the powerful US House Financial Services Committee, declared that funding the National Housing Trust Fund was his number one priority in the Congressional debate over the future of the GSEs. Other sessions focused on community organizing and how to use the low hiring requirements under the HUD section 3 program to create economic opportunity for low-income residents.

As I write this letter, I just returned from the April trip to the National Community Reinvestment Coalition (NCRC) conference. IACED board member Jean Ishmon, Executive Director of the Northwest Indiana Reinvestment Alliance, also serves on the board of NCRC.  Thanks to Jean’s leadership, IACED is exploring how our longtime membership in NCRC can add additional value for IACED members and champion a shared interest in comprehensive community development. In addition to Jean Ishmon the other IACED member in attendance was Kathy Perron with Apprisen Financial Advocates: Consumer Credit Counseling Service. Again the NCRC sessions were informative focusing on homeownership development, small business development, and new tools for advocacy. As you likely saw on the IACED Facebook page, a training during the last session, explained the benefit and use of Twitter to support community development policy. As a result, IACED is now on Twitter with the handle @INCommDev.

On Friday during the NCRC conference, I spent the day on Capitol Hill in support of policies benefiting IACED members. I had meetings with staff from the following Congressional offices: Senators Lugar and Coats and Representatives Donnelly, Pence, Rokita, and Young. I left materials for the other offices. My Capitol Hill meetings were the day following the passage of the Fiscal Year (FY) 2011 federal spending compromise. Read this IACED action alert for a summary. Did you call your member of Congress?

My talking points included the importance and consequences of zeroing out the HUD housing counseling program and other proposed budget cuts including the Community Development Block Grant, Home Investments Partnership Program (HOME), and US Department of Agriculture Rural Housing programs. Other discussion concerned the modernization of the Community Reinvestment Act, ways to fix the Home Affordable Modification Program (HAMP), and support for the Low Income Housing Tax Credit program and New Markets Tax Credit program to bring reinvestment into communities. If you are interested in further detail, please call me at 317-920-2300.

–
By IACED Executive Director Andy Fraizer

PLEASE CALL YOUR LEGISLATORS!!

Late Monday night, the U.S. House Appropriations Committee released the language for H.R. 1473, the long-term CR. Votes are scheduled in the House on Thursday. Below is a summary of cuts to many programs that are critical to IACED’s membership compiled from the Committee’s bill text and summary.   We are reaching out to Indiana’s congressional delegation this week and urge you to do the same. Click here for some helpful talking points on select budget cuts.   It is important for legislators to know that these federal funding sources are crucial to the welfare of Hoosier communities and the work of IACED member organizations.

To find out who your Representative is, click here.

RELEVANT CUTS COMPARED TO FY10 LEVELS BY TITLE:

Agriculture:

• Women, Infants and Children (WIC): -$504 million
• Rural Housing Insurance Fund Program (loan subsidies): -$151 million
• Rental Assistance: -$24 million

Commerce, State, Justice:

• Economic Development Assistance Programs: -$9 million
• Weed and Seed Program Fund: -$20 million
• Juvenile Justice Programs: -$148 million
• COPS programs: -$296 million

Financial Services and General Government:

• SBA Disaster Loan Administrative Costs: -$33 million
• SBA Projects: -$59 million

Labor, Health and Human Services

• Dislocated Worker Assistance: -$125 million
• Youthbuild: -$23 million
• Green Jobs Innovation Fund: -$40 million
• Career Pathways Innovation Fund: -$125 million
• Community Service Employment for Older Americans: -$375 million
• Community Health Care Centers: -$600 million
• Rural Health Programs: -$35 million
• Title X Family Planning: – $17 million
• HIV, AIDS,Viral Hepatitis, STD and TB Prevention: -$1.05 billion
• Substance Abuse and Mental Health Services Administration (SAMHSA): -$45 million
• Low-Income Home Energy Assistance Program (LIHEAP): -$390 million
• Community Block Grant Programs: -$43 million
• Administration on Aging: -$16 million
• Evenstart: -$67 million
• Individuals with Disabilities Education Act (IDEA) Special Programs: -$19 million
• Career Education: -$138 million
• Adult Education: -$31 million
• Leveraging Educational Assistance Partnership (LEAP): -$64 million
• TRIO Programs: -$25 million
• Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP): -$20 million

Military Construction, Veterans Affairs and Related Agencies:

• Veterans Affairs State Grants- Extended Care Facilities: -$15 million
• Armed Forces Retirement Home: -$63 million

Transportation, Housing and Urban Development

• Transportation Planning Research and Development: -$6 million
• High Speed Rail: -$2.9 billion
• Public Housing Operating Fund: -$149 million
• Public Housing Capital Fund: -$456 million
• Tenant Based Rental Assistance: -$187.2 million
  • Administrative Fees: -$125 million
  • Family Unification Program: -$15 million (ZEROED)
  • Veterans Affairs Supportive Housing Vouchers: -$25.1 million
  • Tenant Protection Vouchers: -$10 million
  • Contract Renewals: +$330.6 (INCREASE)
• Project Based Rental Assistance: +$705.4 (INCREASE)
• HOPE VI: -$100 million
• Community Development Fund: -$942 million
  • CDBG cuts: -$643 million
  • Rural Innovation Fund: -$25 million (ZEROED)
  • Sustainable Communities Initiative: -$50.2 million
  • Economic Development Initiative: -$173 million (ZEROED)
• Housing Counseling Assistance: -$88 million (ZEROED)
• Section 811 Housing for the Disabled: -$115 million
• Section 202 Housing for the Elderly: -$425 million
• HOME Investment Partnerships: -$215 million
• Brownfield Redevelopment: -$18 million (ZEROED)
• Energy Innovation Fund: -$50 million (ZEROED)
• Lead Hazard Reduction: -$20 million
• McKinney Vento Homeless Assistance Grants: +$36.2 million (INCREASE)

Please contact Kathleen Taylor if you have any questions.

Speaker Boehner and Senate Majority Leader Reid expressed optimism about the negotiations Wednesday night, but both leaders took to their respective floors today to announce that a compromise before the Friday midnight deadline is unlikely.

These announcements come after weeks of disagreements over a final figure to cut from the budget, the source of the cuts, and a number of policy riders proposed by House leadership including provisions to prevent the Environmental Protection Agency from implementing regulations on various industries and ban federal funding for Planned Parenthood.

In the weeks running up to this showdown, a resolution seemed possible as Democrats agreed early on to around $30 billion in cuts and Majority Leader Reid and the President claimed the final numbers were close to agreement Wednesday night (between $33 billion and $40 billion compared to the start of the year).  On Thursday, however, Speaker Boehner said while the Wednesday negotiations made progress, the parties were not close to any agreement on the final figure.

The House will vote today on a one-week continuing resolution, which includes $12 billion in cuts and several policy riders, but allows for full funding for the Pentagon.  The White House issued a veto threat claiming that the bill was a political tactic.

Economists have expressed the importance of averting a shutdown in recent days and weeks, noting that the economic recovery that is beginning would be jeopardized.   On Friday, the Department of Labor reported that the unemployment rate had fallen to a two-year low of 8.8 percent in March and that the economy added 216,000 private sector jobs last month.

What closes during a shutdown?

• The Federal Housing Administration would stop processing loan guarantees, affecting about 30 percent of the housing market, according to Administration officials

• The Small Business Administration would stop processing direct small business loans

• As many as 800,000-plus civilian federal workers — including those employed by the Department of Defense — would be furloughed if the government shuts down Friday at midnight

• Military personnel will be paid through Friday, and will continue to work after that, but they will not get paychecks until Congress approves a spending plan

• The processing of paper-filed tax returns at the IRS, which account for about 30 percent of all returns, would be suspended. Tax audits would be suspended. Returns filed electronically would continue to be processed
• National Parks and Smithsonian Institution museums would close
• Department of Commerce grant-making programs for economic development would cease
• The Department of Housing and Urban Development would cease making payments to State and local governments under the Community Development Block Grant (CDGB)
• The Treasury Department’s Community Development Financial Institutions Fund would suspend its grants and technical assistance to communities delaying investments

What stays open?

• Personnel necessary for the safety of life and protection of property; including the military, law enforcement, air traffic control and Department of Homeland Security functions will still be required to work.
• Medicare recipients would continue to receive their coverage because it is funded through the program’s trust fund
• The Veteran’s Administration would remain open because it operates under a multi-year funding calendar

UPDATES:

• Tuesday, April 12:  House and Senate leaders discussed H.R. 1473, a bill released by the U.S. House Appropriations Committee late Monday night that included roughly $38 billion in cuts from FY2010′s enacted levels.  See our related action alert to read more!

• 2 Hours before the midnight deadline Friday, April 8th, House, Senate and White House negotiators reached an agreement to fund the remainder of fiscal year 2011.  The House and Senate passed a short-term bill to fund the government through Thursday, April 14.  The bill also contained restrictions on the use of federal family planning dollars in the District of Columbia and fully funded pay for U.S. troops through the end of FY11.  During that time, leaders will hammer out the details for the longer-term bill to fund the government through September 30.

• 12:40 p.m. Friday:  There are reports now that Senate Republics would allow a vote on a very short-term resolution to prevent a shutdown if a bipartisan deal is reached today to fund the government for the remainder of FY2011.  That would allow a few days during which a longer-term deal could be passed by Congress and sent to the President to sign into law.

• 9:30 a.m. Friday: Various pundit economists echoed their concerns about the increasing likelihood of a shutdown.  James O’Sullivan, the chief economist as MF Global, said that when the government shut down for 20 days in late 1995, the nation’s economic growth was slowed by as much as a full percentage point in that quarter.  He went on to say, however, that the effect was largely temporary.  There is rumor that the White House has set a 10:30 a.m. deadline for agreement between the parties.

• As of 10:30 p.m. Thursday:  President Obama called both Speaker Boehner and Senate Majority Leader Reid to the White House twice yesterday as they attempted to hammer out details relating the the continuing resolution.  Both leaders issued a statement noting that the two meetings “narrowed the issues,” but they had not reached a final consensus.

The federal budget debate on Capitol Hill has reached a fever pitch this week.  The current Continuing Resolution (CR), a temporary federal funding stopgap measure put into place until a new budget is passed, is set to expire on March 4, 2011.  The debate, which will likely ensue beyond that expiration date, brought on by vast differences between the President’s Fiscal Year 2012 budget proposal announced Monday and the U.S. House leadership’s FY2011 budget proposal, finalized on February 11. The House proposal cut an additional $26 billion from the FY 2011 budget Friday – on top of $36 billion in reductions already proposed earlier in the week.

The current House budget bill calls for $58 billion in cuts to discretionary spending. The resulting total budget proposal is about $100 billion below the President’s FY2011 request. It is worth clarifying that the President’s FY2011 request was never acted upon and the federal budget has been frozen at FY 2010 levels as Congress has only passed CRs.

The House Budget Committee Chairman, Rep. Paul Ryan (R-Wis), conceded on February 15 that the Senate would be unlikely to act on the House legislation before the March 4 deadline and that House leaders would be willing to pass a short-term extension, only at reduced levels. For its part, the White House has acknowledged some cuts may necessary. If a CR does extend funding for government operations beyond March 4, a government shutdown is a possibility.

It is critical IACED members be heard on the importance of various community development programs, see below for the requested actions including meeting with your Member of Congress.

What it means for IACED Members

The House budget proposal would have severe implications for IACED’s membership. While the President’s bill includes increases for community economic development programs in hopes of engendering greater economic recovery, it also includes steep budget cuts within the Department of Housing and Urban Development (HUD), a critical source of funding for many IACED members.

While the Obama Administration’s FY 2012 budget includes cuts to several HUD key programs, it calls for an infusion of funding into others. According to the Administration, the proposed increases would be offset by additional credit premiums and mortgage insurance paid as a result of anticipated increases in homeowner borrowing from the Federal Housing Administration.

The President’s proposal calls for:

• $172 million in cuts to for new housing construction for Section 811, housing for the disabled and Section 202, housing for the elderly.  That means the Section 811 budget would be decreased by $104 million and Section 202 would be reduced by $68 million.
• $813 million in cuts to the Public Housing Operating Fund
• $95 million in cuts to the Public Housing Capital Fund
• $805 million increase to Tenant Based Rental Assistance
• $820 million increase to Project Based Assistance
• maintain funding for Housing Counseling at $88 million
• maintain funding for the multi-agency Partnership for Sustainable Communities Initiative at $150 million
• no new funding for HOPE VI, instead it calls for $250 million in the Choice Neighborhoods Initiative.  In FY 2010, HOPE VI was funded at $200 million and Choice Neighborhoods was funded at $65 million.
• $646 million in cuts to Community Development Fund compared to current FY2010 funding levels.  Within this fund, the Administration proposes the following changes:
  • $300 million in cuts to Community Development Block Grants
  • $175 million decrease to HOME Investment Partnerships Program
  • $500 million increase to Homeless Assistance Grants
  • maintain $335 million funding level for Housing Opportunities for Persons with AIDS (HOPWA)
  • terminate the Self-Help Homeowner Opportunity Program (SHOP)
  • maintain funding for the Rural Innovation Fund at the current funding level of $25 million

The House budget proposal would make the following changes compared to current FY 2010 funding levels including:

• $210 million in cuts to Section 811, housing for the disabled
• $551 million in cuts to Section 202, housing for the elderly
• $149 million in cuts to Public Housing Operating Fund
• $1.1 billion in cuts to Public Housing Capital Fund
• $104.1 million in cuts to Tenant Based Rental Assistance
• $730 million increase for Project Based Rental Assistance
• $87.5 million in cuts to Housing Counseling Assistance
• terminate funding for the Partnerships for Sustainable Communities Initiative.
• $200 million in cuts to HOPE VI, terminate funding for Choice Neighborhoods
• $3 billion in cuts to the Community Development Fund compared to current FY2010 funding levels.  Within this fund, the Administration proposes the following changes:
  • $2.5 billion in cuts to CDBG funds
  • $175 million in cuts to HOME Investment Partnerships Program
  • maintain funding for Homeless Assistance Grants
  • maintain funding for Housing Opportunities for Persons with Aids
  • maintain funding for the Self-Help Homeowner Opportunity Program
  • terminate funding for the Rural Innovation Fund

In addition to the HUD budget, IACED members should also be aware of proposed cuts to nutrition, community health and energy assistance programs.

The Republican FY2011 proposal calls for:

• $400 million in cuts to Low Income Home Energy Assistance Program (LIHEAP)
• $1.3 billion in cuts to Community Health Centers that provide primary healthcare for public housing residents
• $1.1 billion in cuts to Head Start
• $758 million in cuts to Women Infants and Children (WIC) nutrition assistance program from current $7.2 billion funding in FY 2010

The Obama Administration FY2012 proposal calls for:

• $2.5 billion in cuts to LIHEAP
• increased funding for Community Heath Centers by requesting $3.3 billion for FY 2012
• maintain current funding levels for Head Start
• increasing the WIC budget for FY 2012 to $7.6 billion from $7.2 billion
• $3.3 billion increase to Nutrition Assistance Programs, or food stamps, to restore previous cuts

IACED members who are interested in setting up meetings with their Representative during a brief recess Congress has next week should contact Kathleen Taylor as soon as possible so she can reach out to Congressional staff to schedule.

Watch the IACED blog and your email inbox for timely updates on the federal budget and action required by IACED members and supporters to maintain critical programs for building assets for low-income Hoosiers and restoring Indiana communities.

In the coming week, look for a a “one-pager” referencing the implications for proposed program cuts. Please share with Kathleen detailed examples of how beneficial these programs have been in your communities, including specifics such as number of clients served, increased need over the past year, etc. as we continue our outreach to federal and state stakeholders.

If you would like to pursue outreach to your Representative on the proposed cuts discussed here or if your Representative is unresponsive to the scheduling request, call the Housing Legislative Assistant directly in their Washington, D.C. offices.  A list of staff contacts for the Indiana Delegation is included below.  If you need a link to find your representative, click here.

The Indiana Association of Community Economic Development, a member of the National Association for Community Economic Development, joined other members of the Campaign for Housing and Community Development Funding in sending a letter to U.S. House and Senate leadership expressing extreme concern about the funding levels proposed in H.R. 38.  Cutting programs such as CDBG, HOME, Hope VI, Section 8, HUD Housing Counseling, Rural Housing and Economic Development, McKinney-Vento Homeless Assistance Grants, Section 202 housing for the elderly, and Section 811 housing for the disabled would have devastating implications for IACED member organizations.  During this critical time in our economy, cuts this large would destabilize communities across Indiana.  IACED will be reaching out to our members with frequent updates and action alerts as the budget process progresses.

Click here to read Politico’s coverage of the U.S House Appropriations Committee vote and the budget battles that loom ahead among the U.S. House, Senate and the Obama Administration.

CFPB Director Elizabeth Warren sent an email message today announcing that the Bureau is “excited to announce the launch of [the Bureau] website, http://ConsumerFinance.gov, for one very important reason – to start a conversation with you.” Advocates and interested persons can post suggestions at for the Bureau at http://www.consumerfinance.gov/openforsuggestions. Bureau personnel will be actively responding to suggestions and engaging electronically with consumers and interested persons.

Other ways suggested to connect with the Bureau include: 1) record a YouTube video and upload it as a response to the  welcome video at http://www.youtube.com/CFPB, 2) tweet your suggestion for the Bureau using the hashtag #CFPB, or 3) if you are on Facebook,  “Like” the Bureau at http://www.facebook.com/CFPB, and post suggestions on the wall.