On March 2, Ben Carson was confirmed as the Secretary of Housing and Urban Development. The acclaimed neurosurgeon gained the position in a Senate decision that garnered bipartisan support.
The federal agency is responsible for programs relating to fair housing opportunities, improvement and development within communities and overall housing needs. Many of these provide assistance to low-income and minority Americans seeking entry into the middle class, according to The Washington Post.
Carson will oversee these housing policies, a comprehensive set of initiatives and an annual budget of around $49 billion. The newest secretary adopted a strongly conservative viewpoint on government assistance programs and the social safety net in his confirmation hearings in February. His statements surrounding his belief that these offerings lead to dependency and discourage people from working were highly criticized, according to The New York Times.
"Carson will oversee these housing policies, initiatives and an annual budget of around $49 billion."
President Trump has proposed budget reductions across various government departments in order to increase defense spending. The administration is currently considering cutting $6 billion from HUD, effectively shrinking the annual allocation by around 14 percent - to $40.5 billion in 2018 - The Washington Post reported.
The affected funding would include that for building maintenance and community development projects, the public housing capital fund, as well as the public housing operating fund. Additionally, the Community Development Block Grant Program would be cut completely as would the HOME Investment Partnerships Program. All in all, the proposed reductions are still a work in progress. The Trump administration said it would release its complete budget at some point this week.
Budget cuts aren't the only possibility. Regulation rollbacks have been proposed across various federal agencies, including one already in place by the Federal Housing Administration. Prior to Trump entering office, Julian Castro - the former secretary of HUD under President Obama - announced a reduction in insurance premiums, according to MarketWatch. The goal of this action was to trim 25 basis points - or a quarter percentage point. While Castro and the Obama administration believed this would improve access to residential mortgages for homeowners, Congressional Republicans believed the change would put borrowers at risk for having to pay more should another bailout be necessary.
This reduction has been suspended indefinitely for now. And that's not the only rule facing backlash. On Jan. 30, 2017, President Trump signed an executive order calling for federal agencies to propose two regulations to be eliminated for every new statute proposed.
"HUD has taken a more active role in managing the mortgage market since 2008."
Since the housing market collapse of 2008, HUD has taken a more active role in managing the mortgage market. Congressional Republicans are looking to reduce that duty as a way to minimize taxpayer risk, according to the Baltimore Sun. Only time will tell what Secretary Carson will do with his new position and what it will mean for conventional mortgages across the country.
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