Q&A with HUD Secretary Shaun Donovan

The Housing and Urban Development Secretary answered questions at a May 18 Monitor Breakfast about his plan to reallocate up to $1 billion in additional funds to stabilize those neighborhoods that were the hardest hit by the foreclosure crisis.

Monitor Breakfast

Housing and Urban Development Secretary Shaun Donovan heads a department whose mission is to create strong, sustainable, inclusive communities and affordable homes for all. He was a guest speaker at the May 18 Monitor breakfast in Washington, D.C.

On his plan to reallocate up to $1 billion in Neighborhood Stabilization Program funds:

“We do have concentrated damage from the foreclosures in certain communities. So we will be reallocating that funding to places that have been hardest hit.... We are also announcing support for additional funding for neighborhood stabilization and we will be working with Congress to [get it].”
On where HUD will focus the funds to demolish or rehabilitate abandoned buildings and help homebuyers with down payments and closing costs:
“The biggest benefit will be in places like Nevada, California, Arizona, Florida, that have been the very hardest hit by this crisis.”

On tailoring housing programs to local needs:

“Neighborhood stabilization has been a flexible tool for communities.... This is not the sort of old urban renewal, one size fits all approach. This is a fundamentally different kind of approach that really tries to work with local communities to achieve their vision of what neighborhoods should be.”

On the general state of the housing market:

“The broad story is one of the housing market recovering and returning to a stronger, more stable investment for homeowners.”

On the outlook for further cuts in HUD’s budget as the federal government wrestles with deficits. HUD funds were trimmed 5 percent in the Obama administration’s 2011 budget:

“We are going to have to make difficult choices, and given the fiscal environment that is the only responsible thing to do. I think the president has made that clear.... We are intent on getting the country’s financial house in order.”

On his changed approach to running the Federal Housing Administration (FHA), the HUD agency that insures first mortgages:

“One big difference in the approach that we have brought is a real focus on risk management and real experts in mortgage lending that are at the helm of FHA.... We have built dramatically improved risk monitoring and we look at those numbers on a very regular basis.”

On combating homelessness as part of HUD’s mission:

“Over the last four years we have seen roughly a 30 percent decrease in chronic homelessness.... We are making a lot of progress there. The issue in the economic crisis is family homelessness [and] is more of a challenge..... The Recovery Act invested a billion and a half dollars in the Homeless Prevention and Rapid Rehousing Program ... to target relatively small amounts of money to families at risk of homelessness or who had just [become homeless].... If it is $1,000 [to help a family] and you avoid tens of thousands of dollars of costs in emergency rooms or shelters, that is a smart investment.... That is an approach I am very excited about.”