Housing and Urban Development (HUD) - Explained

What is HUD?

Updated at April 4th, 2023

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What is the U.S. Department of Housing and Urban Development?

The Department of Housing and Urban Development or HUD in short, is a government body formed in 1965 to oversee numerous housing and community development programs, including the Federal Housing Administration (FHA). The agency is responsible for providing affordable owner-occupancy opportunities, delivering secure and inexpensive leasing options and fighting homelessness. HUD also ensures that there exists no discrimination in the housing markets, and extends its support to the economically disadvantaged, and racial and ethnic minority populations.

What does the U.S. Department of Housing and Urban Development Do?

The department was established in 1965, as a part of the Great Society program if President Lyndon Johnson. He signed the Department of Housing and Urban Development Act on September 9, 1965, and was it was implemented on January 13, 1966. It is a cabinet-level government agency and the secretary of the agency is appointed by the President of United States and approved by the simple majority vote in Senate. The HUD is responsible for implementing the Fair Housing Act, which seeks to prevent discrimination in housing opportunities based on race, sex, religion and national origin. Moreover, the HUD is also authorized to investigate any instances of discrimination against prospective homebuyers or renters, refusal of sale or rent by proprietors and imposition of terms and conditions that it deems discriminatory. They also intend to improve the quality of life of the Americans by improving housing opportunities. It also helps the homeowners to avoid foreclosure and in strengthening the community. The agency also superintends the Community Development Block Grant, the Housing Choice Voucher program and several other welfare schemes that assist vulnerable populations with their accommodation requirements. HUD also actively participates in disaster recovery in the Gulf Coast region. The agency actively collaborates with both government agencies and private groups to attain its housing and community development objectives. HUD administers two departments, Federal Housing Administration and Federal Housing Finance Agency. The Federal Housing Administration runs the mortgage insurance program. The program provides a home loan to those who are not qualified for a conventional mortgage due to low credit score or a history of bankruptcy or foreclosure. The Federal Housing Finance Agency is a regulatory authority that monitors Freddie Mac, Fannie Mae, and the 11 federal home loan banks. There are 16 offices under this department including the Office of Community Planning and Development, Office of Fair Housing and Equal Opportunity, Office of Policy Development and Research and others.

HUD Grant Program

The Community Development Block Grant program uses federal grants to develop affordable housing options within communities to benefit low and middle-income groups. This and several other development programs ensure that such living spaces have access to public transportation, supermarkets, and other basic amenities.

HUD Vouchers

The Housing Choice Voucher program, popularly known as Section 8, allows vulnerable or senior citizens, to choose homes in both subsidized and non-subsidized housing zones. However, to avail these perquisites, applicants, as well as their chosen properties, must conform to certain norms set by the government. After identifying reasonably priced housing options, the housing authority finalizes the list of benefits that qualifying applicants can receive. Qualified applicants can then choose their type of home based on criteria such as income and family size. While handing out voucher benefits, the HUD usually subtracts 30 percent of the family's monthly-adjusted income from the payment standard or the gross rent, depending on the case. Families relocate homes for several reasons such as changes in income, employment status or expansion of the family. The voucher program seeks to facilitate such relocation by ensuring that relocating families do not lose their housing benefits. The program entails beneficiaries with vouchers signing lease agreements with property owners. In cases where residents avail subsidized housing, they are required to sign lease agreements with property managers.

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