What Is the U.S. Department of Housing and Urban Development (HUD)?

The Department of Housing and Urban Development (HUD) is a U.S. government agency created in 1965 as part of then-President Lyndon Johnson’s Great Society agenda to expand America’s welfare state. Its primary mission is improving affordable homeownership opportunities to support the housing market and homeownership in inner-city areas.

HUD’s programs are geared toward increasing safe and affordable rental options, reducing chronic homelessness, fighting housing discrimination by ensuring equal opportunity in the rental and purchase markets, and supporting vulnerable populations.

Understanding HUD

HUD enforces the Fair Housing Act and oversees the Community Development Block Grant program and the Housing Choice Voucher program. It also supervises other programs to assist low-income and disadvantaged Americans with their housing needs and it works with various government agencies and private organizations, including community nonprofits and faith-based groups, to reach its goals.

The Fair Housing Act prohibits discrimination in housing based on sex, race, color, national origin, religion, family status, and disability. HUD investigates any cases concerning the refusal to rent or sell a property, denying someone a dwelling, falsely stating that properties are unavailable, and imposing different terms or conditions based on any of the aforementioned discriminating conditions.

HUD is led by the HUD secretary, a member of the president’s cabinet who is nominated by the president and confirmed by the Senate. The position is currently held by Marcia Fudge, who took office on March 10, 2021.

Types of HUD Assistance Programs

HUD offers various assistance programs for those in need of housing financial assistance.

Housing

The Office of Housing is the largest office within HUD and includes the Federal Housing Administration. As stated on the HUD website, the duties of the office include:

• Operating FHA and providing over mortgage insurance on mortgages for single-family homes, multifamily properties, and healthcare facilities
• Operating HUD's Manufactured Housing program
• Managing HUD's Project-Based Rental Assistance and other rental assistance programs, which provide support for low and very low-income households
• Supporting the Housing for the Elderly and Housing for Persons with Disabilities programs, which provide affordable housing for vulnerable populations
• Encouraging recapitalization of the nation's aging affordable housing stock through programs such as the Rental Assistance Demonstration
• Facilitating housing counseling assistance through HUD's Office of Housing Counseling

Grants

The Community Development Block Grant program allocates federal grant money to communities to develop neighborhoods that have decent, affordable housing. These grants typically aid low- and middle-income residents so they can find suitable living environments near employers, supermarkets, or public transportation. States, cities, towns, communities, and organizations apply for these block grants or for loan guarantees to aid in development projects.

Vouchers

The Housing Choice Voucher program, also called Section 8, allows low-income, disabled, or elderly citizens to choose a place to live regardless of whether the property exists as subsidized housing. The property must meet certain requirements and applicants need to meet government standards to qualify.

Local public housing authorities determine a moderately priced housing option based on local real estate prices before deciding the benefits that families or individuals can receive. Families then seek out a housing unit for the number of people who will live in the house, duplex, or apartment.

The vouchers are administered by local public housing agencies (PHAs) that are funded by HUD. The PHA pays the subsidy directly to the landlord on behalf of the tenant, and the tenant pays the difference between the actual rent charged by the landlord and the amount subsidized by the program. HUD states that to be eligible for the voucher program, the tenant’s income may not exceed 50% of the median income for the area.

Families can move from one housing unit to another because of income changes, job status, or the addition of family members. The voucher program attempts to allow for mobility without losing housing benefits. Beneficiaries with vouchers sign leases with property owners that have this program. With subsidized housing, residents sign leases with property managers who oversee federally owned projects.

The Office of Public and Indian Housing

The Office of Public and Indian Housing (PIH) exists to ensure access to safe, decent, and affordable housing. The PIH also works to create opportunities to help residents become self-sufficient and economically independent.

HUD established its office of Public Housing to help provide safe and decent rental housing for eligible low-income families as well as the elderly and people with disabilities. This includes access to single-family homes as well as housing in multi-unit properties. An estimated 1.2 million households live in public housing units that are managed by entities overseen by HUD.

The Office of Community Planning and Development

The Office of Community Planning and Development (CPD) works to develop viable communities by promoting integrated approaches in providing decent housing, suitable living environments, and expanding economic opportunities for low and moderate-income individuals and households. The Office achieves this goal by developing partnerships among the government and private sector organizations, including those that operate on a for-profit and non-profit basis.

The Office of Policy Development and Research

The Office of Policy Development and Research supports HUD's efforts to create cohesive and economically viable communities by maintaining up-to-date information on:

• Housing needs
• Market conditions
• Existing housing programs

The office is also tasked with conducting research on priority housing and community development issues. The data generated is then used to help inform HUD policy decisions.

The Office of Fair Housing and Equal Opportunity

The Office of Fair Housing and Equal Opportunity (FHEO) exists to "eliminate housing discrimination, promote economic opportunity, and achieve diverse, inclusive communities by leading the nation in the enforcement, administration, development, and public understanding of federal fair housing policies and laws."

As stated on their website, some of the laws that FHEO implements and enforces include:

• The Fair Housing Act
• Title VI of the Civil Rights Act of 1964
• Section 109 of the Housing and Community Development Act of 1974
• Section 504 of the Rehabilitation Act of 1973
• Titles II and III of the Americans with Disabilities Act of 1990
• The Architectural Barriers Act of 1968
• The Age Discrimination Act of 1975
• Title IX of the Education Amendments Act of 1972

FHEO is also responsible for investigating fair housing complaints, conducting compliance reviews, ensuring civil rights in HUD programs, and managing fair housing grants.

Ginnie Mae

Ginnie Mae makes affordable housing a reality for low- and moderate-income households by helping to funnel capital into the housing market. The Ginnie Mae guaranty program allows mortgage lenders to get a better price for loans in the secondary mortgage market. Lenders can use the proceeds to fund new loans, which enables the mortgage market to maintain liquidity.

Ginnie Mae doesn't buy or sell loans or issue mortgage-backed securities. But it does guarantee investors the timely payment of interest and principal on mortgage-backed securities that are backed by federally insured or guaranteed loans.

Other programs

HUD oversees a number of other programs and offices, including:

• Office of Economic Development
• Office of Hearings and Appeals
• Healthy Homes and Lead Hazard Control
• Public Affairs
• Office of the Inspector General

Each of these programs and offices play a different role in ensuring fair and equal access to housing.

Bottom Line

The Department of Housing and Urban Development serves an important role in ensuring that homebuyers are able to secure mortgage loans. FHA loans, for example, can make it easier to buy a home with a smaller down payment and/or a lower credit score. These types of mortgage options help to make homeownership more accessible overall.