How Does HUD Work?

Provides Affordable Housing

The mission of the U.S. Department of Housing and Urban Development (HUD) is to provide access to affordable housing, increase homeownership and to bolster community development, particularly in low-income, urban areas.

“Affordability,” as it relates to housing, is generally regarded as no more than 30 percent of a family’s total annual income. However, more than 12 million people within the United States are spending 50 percent of their income on housing, reducing their ability to pay for other necessities. Through such HUD agencies as HOME Investment Partnerships, Self-Help Homeownership and Homeownership Zone, federal resources can be allocated statewide to assist low-income families in renting, purchasing or renovating a home, or to help develop affordable housing areas.

HOME Investment Partnerships provides grants to states and local governments to fund housing programs for very low to low-income families. Each state has the flexibility to structure their program, within the guidelines of the HOME statute, so that it best serves those within the community.

Through the Self-Help Homeownership program, local non-profit organizations can receive grants to purchase home sites and develop them through volunteer-based programs.

A Homeownership Zone is one in which the community has reclaimed vacant lots or distressed areas for the purpose of turning them into entire neighborhoods of single-dwelling, affordable homes for low-income families.

Aids Community Development

Aside from increasing homeownership among low-income families, one of HUD’s main focuses is on community development. There are several HUD grants available that help in community revitalization. One, the Community Development Block Grant (CDBG), provides annual grants to those cities, counties and states deemed eligible in order to provide affordable housing to low-income families with the purpose of revitalizing urban areas. Other grants obtained through the Disaster Recovery Assistance program funnels money to those areas the president declares as disaster zones. Through a Public Housing Homeownership Program, the Public Housing Authority can sell off all units, or a portion thereof, to existing residents so that they may become homeowners. Likewise, Homeownership Vouchers provide assistance to first-time homebuyers who need help paying monthly mortgage or other home-related expenses.

Offers Buying Programs

HUD works, as well, to serve families on a more personal level through several programs. The Good Neighbor Next Door program offers community service workers up to a 50 percent discount on the price of a listed home. Those eligible for the discount include teachers, law enforcement workers, fire fighters and emergency responders. These homes are all listed in “revitalization areas,” and the homeowner must be willing to occupy it for at least 36 months. Another program designed to help with homeownership is the Indian Home Loan Guarantee Program (Section 184). Established in 1992, the purpose of this program is to provide assistance to American Indian and Alaska Native families, tribes and villages.

HUD also offers the consumer a wealth of information on the home-buying process, from how to avoid predatory lenders to knowing your rights when buying a home.