U.S

and 

HUD

F Y 2 0 0 6 - F Y 2 0 1 1

U. S . D e p a r t m e n t o f H o u s i n g a n d U r b a n D e v e l o p m e n t

ST R A T E G I C

P L A N

HUD 

STRATEGIC PLAN

FY 2006 – FY 2011 

U.S. Department of Housing and Urban Development 

March 31, 2006 

MESSAGE FROM SECRETARY

ALPHONSO JACKSON

The U.S. Department of Housing and Urban Development, on

behalf of and in partnership with the American people, has had 

substantial success in numerous important efforts: expanding 

homeownership, increasing access to affordable housing, fighting 

housing discrimination, eliminating chronic homelessness, improving 

communities, and affirming our nation’s support for society’s most 

vulnerable populations. This Strategic Plan sets forth HUD’s vision, 

goals, and strategies to continue to advance our mission and remain

effective stewards of our citizens’ resources. 

Each year, the Department successfully enables millions of individuals and families to 

become homeowners or to obtain safe, decent, and affordable rental housing. Each year, HUD 

provides resources to improve economic conditions and infrastructure in distressed communities, 

thereby making them more livable. We increase public awareness of fair housing laws, because this 

awareness, coupled with enforcement of these laws, reduces housing discrimination. Finally, the

Department continues to embrace high standards of ethics, management, and accountability to

assure that crucial and scarce public sector dollars are being used in programs that are financially 

sound and effectively administered. We at HUD will continue to document further progress in all 

these key areas. 

We recognize, however, that though the priorities, needs, and interests of this country are 

great and diverse, the available resources are limited. Nevertheless, HUD will not retreat from its

mission. HUD continues to strengthen its partnerships with other federal agencies, state and local 

governments, and private sector organizations—whether for-profit or non-profit, whether faithbased or community-based. These partnerships help advance our mission by leveraging resources

and promoting innovative program goals and designs. A good example of this collaboration is our 

new strategic objective to assist disaster recovery in the Gulf Coast region. Mission results will be 

further achieved through important HUD-proposed initiatives, including legislative proposals to 

reinvigorate and transform the Federal Housing Administration, reform the Community 

Development Block Grant program, improve Public Housing and the Housing Choice Voucher 

program, and continue progress in reducing homelessness and ending chronic homelessness through 

consolidation of existing programs. 

During the period this Strategic Plan is in effect, we at HUD expect to see notable 

achievements in a number of outcome measures and Presidential and Secretarial initiatives. The 

Department will continue its focus on increasing homeownership opportunities for those who aspire 

to become homeowners, with an added emphasis on minority homeownership to support the 

President’s goal of adding 5.5 million minority homeowners by the end of the decade. HUD will 

increase affordable housing opportunities and improve housing conditions, with additional focus on 

housing for the elderly and persons with disabilities and AIDS, and on eliminating lead hazards. We 

will see performance improvements in financial management, information technology (IT), and 

program operations, by eliminating material audit weaknesses; modernizing and securing IT 

infrastructure; advancing electronic government; and fully implementing the Strategic Human Capital 

Management Plan to produce a high-performing and satisfied workforce. 

TABLE OF CONTENTS

Introduction...................................................................................................................1

HUD’s Strategic Goals — Objectives, Means and Strategies, Performance 

Measurement, and External Factors ............................................................................5

Strategic Goal A: Increase Homeownership Opportunities 7

Strategic Goal B: Promote Decent Affordable Housing 15

Strategic Goal C: Strengthen Communities 29

Strategic Goal D: Ensure Equal Opportunity In Housing 39

Strategic Goal E: Embrace High Standards of Ethics, Management, and Accountability 45

Strategic Goal F: Promote Participation of Faith-Based and Community Organizations 55

Aligning Resources with Results................................................................................. 59

Budget and Staff 59

Interagency Partnerships 60

Policy Development, Program Evaluations, and Related Research 65

Appendix...................................................................................................................... 71

Strategic Planning and Performance Management at HUD 71

Perspective and Outlook 73

Gulf Coast Disaster Response 74

Key Statutes 76

INTRODUCTION

This document presents the U.S. Department of 

Housing and Urban Development’s (HUD) 

Strategic Plan for Fiscal Years (FYs) 2006–2011. 

The Strategic Plan describes HUD’s strategic goals 

and objectives for the remainder of FY 2006 and 

the next five years, and its plan of action for 

achieving these objectives and further measuring 

results. It outlines the challenges facing the 

Department and its programs, and describes its 

commitment to overcoming these challenges. It 

highlights the effective working relationships 

HUD has developed with other federal agencies 

and branches, and its renewed emphasis on

creating partnerships with local governments, 

faith-based and community organizations, and the 

private sector. It also describes the policies, 

means, and strategies needed to ensure that HUD 

is a high-performing agency that fulfills its 

mission. 

HUD’s mission: To increase homeownership, 

support community development and increase access 

to affordable housing free from discrimination.

Secretary Jackson remains committed to 

continued improvement of HUD’s performance 

while upholding the highest standards of ethics, 

management, and accountability. This is in 

keeping with President Bush’s Management 

Agenda, which HUD is implementing actively to

fully resolve remaining management weaknesses. 

This introductory section presents a brief 

overview of the Strategic Plan and its 

development. The following section explains in 

detail the six strategic goals, providing a 

framework for measurement of results. The final 

section links resources with results, laying out a 

plan for fully devoting HUD’s budget and human 

capital to achieve the strategic goals. As a 

reference, the appendix to this Strategic Plan 

summarizes HUD’s strategic planning and 

management processes; key statutes that direct its 

work; and an assessment of major economic, 

social, demographic, or other trends that may 

impact the direction and success of HUD’s 

efforts. 

Development of this Strategic Plan 

During 2005, Secretary Jackson called for HUD 

leadership to initiate strategic planning and 

consultation to assess the continued suitability of 

HUD’s strategic goals and objectives and program 

efforts for achieving the Department’s statutory 

mission. All principal areas of HUD contributed 

to this effort, and the planning was substantially

integrated with development of the FY 2007 

Budget and Annual Performance Plan. These 

documents reflect HUD’s strategic goals and 

revised objectives. Taken together, they provide 

substantial information on HUD’s long-term 

objectives and strategies for achieving those 

objectives. 

In preparing its new Strategic Plan, the 

Department obtained stakeholder feedback by 

consulting with Congress and the Office of

Management and Budget; soliciting feedback at 

regional meetings; and inviting interest groups to a 

National Stakeholders Consultation in

Washington, DC. The Department also solicited 

comments from citizens, stakeholders, and HUD 

employees by publishing a draft of this plan on its 

website. The Department’s managers and leaders 

engaged in extensive deliberations about 

appropriate strategic goals, objectives, and 

policies. This Strategic Plan reflects HUD’s 

efforts to balance its priorities with input received 

from stakeholders. 

HUD’s Strategic Framework

HUD’s Strategic Framework consists of a mission 

statement supported by strategic goals and 

objectives that summarize the Department’s aims 

over the next six years. HUD’s mission and 

strategic goals remain unchanged from those 

established in 2003, although there have been 

revisions to the strategic objectives. 

The strategic framework, shown in the following 

table, includes three programmatic strategic goals 

and three cross-cutting strategic goals. 

Programmatic goals reflect the program areas 

where HUD’s efforts benefit people and 

communities. Cross-cutting goals reflect HUD 

priorities with a wide cross-cutting impact that

affect each of HUD’s program areas. Under each 

goal are the key strategic objectives that HUD will 

use to guide its performance. 

HUD Strategic Plan 1 
Introduction

HUD’s FY 2006–2011 Strategic Framework 

Mission: Increase homeownership, support community development,

and increase access to affordable housing free from discrimination.

A: Increase

homeownership 

opportunities

B: Promote 

decent affordable 

housing

C: Strengthen 

communities

Program

m atic Strategic Goals 

A1: Expand national 

homeownership

opportunities. 

A2: Increase minority 

homeownership. 

A3: Make the homebuying 

process less complicated and 

less expensive. 

A4: Reduce predatory lending

through reform, education, 

and enforcement. 

A5: Help HUD-assisted renters become homeowners.

A6: Keep existing homeowners from losing their homes. 

B1: Expand access to and 

availability of decent, 

affordable rental housing. 

B2: Improve the management accountability and physical

quality of public and assisted 

housing. 

B3: Improve housing

opportunities for the elderly 

and persons with disabilities. 

B4: Promote housing self- sufficiency. 

B5: Facilitate more effective delivery of affordable

housing by reforming public 

housing and the Housing 

Choice Voucher program. 

C1: Assist disaster recovery in

the Gulf Coast region. 

C2: Enhance sustainability 

of communities by expanding economic opportunities. 

C3: Foster a suitable 

living environment 

in communities by improving 

physical conditions and 

quality of life. 

C4: End chronic homelessness and move homeless families 

and individuals to permanent

housing. 

C5: Address housing conditions that threaten health. 

D: Ensure equal opportunity in housing 

D1: Ensure access to a fair and effective administrative process to investigate and resolve complaints of discrimination. 

D2: Improve public awareness of rights and responsibilities under fair housing laws. 

D3: Improve housing accessibility for persons with disabilities. 

D4: Ensure that HUD-funded entities comply with fair housing and other civil rights laws. 

E: Embrace high standards of ethics, management, and accountability 

E1: Strategically manage HUD’s human capital to increase employee satisfaction and improve HUD performance.

E2: Improve HUD’s management and internal controls to ensure program compliance and 

resolve audit issues. 

E3: Improve accountability, service delivery, and customer service of HUD and its partners. 

E4: Capitalize on modernized technology to improve the delivery of HUD’s core business functions. 

F: Promote participation of faith-based and community organizations 

Cross-C

u tting S t rategic Goals 

F1: Reduce barriers to faith-based and community organizations’ participation in HUD-sponsored 

programs. 

F2: Conduct outreach and provide technical assistance to strengthen the capacity of faith-based 

and community organizations to attract partners and secure resources. 

F3: Encourage partnerships between faith-based/community organizations and 

HUD grantees and subgrantees. 

2 HUD Strategic Plan
Introduction

How HUD Achieves its Goals

By working closely with other federal agencies and 

branches, as well as with local governments, faithbased and community organizations, and the 

private sector, HUD provides a coordinated and 

comprehensive response to America’s housing and 

community development needs. HUD’s key 

activities directly support the strategic goals: 

• Increase homeownership opportunities by

fighting predatory lending, simplifying the

homebuying process, helping HUD-assisted 

renters become homeowners, and insuring 

loans for first-time and low-income 

homebuyers to increase access to the benefits 

of homeownership. 

• Promote decent affordable housing by 

expanding access to affordable rental housing, 

improving the physical quality and 

management of public housing, and providing 

housing opportunities for populations with

special needs.

• Strengthen communities by eliminating 

chronic homelessness, mitigating housing 

conditions that threaten health, and providing 

grants to communities to help meet locally

defined needs for housing, economic 

development, and public infrastructure. 

• Ensure equal opportunities in housing by 

resolving discrimination complaints swiftly, 

promoting awareness of fair housing laws,

improving housing accessibility for persons 

with disabilities, and ensuring that HUDassisted programs provide equal opportunity. 

• Promote participation of faith-based and 

community organizations by removing the

regulatory barriers that discourage these 

organizations from partnering with HUD.

Whom Does HUD Serve? 

HUD has about 9,000 employees and 81 field 

offices, with a presence in all 50 states, the

nation’s capital, and Puerto Rico. Here are a few 

examples of the people and communities that 

benefit from HUD’s programs: 

• Through the Federal Housing Administration 

and Government National Mortgage

Association (Ginnie Mae), both part of HUD, 

families that otherwise could not afford 

homeownership are helped in achieving that 

part of the American Dream. 

• Millions of Americans – those who are lowincome, as well as disabled individuals, the 

elderly, individuals with HIV/AIDS, and 

people who were once homeless – receive

HUD rental or homeowner assistance, 

enabling them to afford a decent place to live. 

• Every state and more than 1,000 cities receive 

Community Development Block Grants, and 

a large portion also participate in the HOME 

Investment Partnerships and other grant 

funding, helping them to meet locally defined 

needs for housing, community development, 

and basic services. 

• To fulfill its mission, HUD works closely with 

Congress and other federal agencies, and 

builds partnerships with local governments, 

faith-based and community organizations, and 

the private sector. HUD’s Headquarters staff 

and field offices work with cities, counties, 

states, lenders, nonprofits, and members of 

the housing industry. 

• HUD strives to use research, performance 

management, and technological advances to

continuously improve program operations. 

• For FY 2006, Congress approved a budget of 

more than $34 billion for HUD programs.1

 

1 The more than $34 billion reflects rescissions, but does not 

include the $11.5 billion provided in the disaster assistance 

supplemental appropriation. 

HUD Strategic Plan 3 
Introduction

4 HUD Strategic Plan
HUD’S STRATEGIC GOALS

— 

OBJECTIVES, 

MEANS AND STRATEGIES, 

PERFORMANCE MEASUREMENT, 

AND EXTERNAL FACTORS

HUD Strategic Plan 5 
HUD’s Strategic Goals 

6 HUD Strategic Plan
Strategic Goal A: 

Increase Homeownership Opportunities 

“Ownership – and homeownership in particular – is the key to financial independence, 

the accumulation of wealth, and stronger, healthier communities.” 

 —Secretary Alphonso Jackson 

Strategic Objectives Supporting Goal A 

Increase

Homeownership

Opportunities

A1—Expand national 

homeownership

opportunities 

A2—Increase minority 

homeownership

A6—Keep existing 

homeowners from losing 

their homes 

Overview

Opening doors to homeownership is a core aspect 

of HUD’s mission, originating when Congress 

created the Federal Housing Administration 

(FHA) in the 1930s. Homeownership allows an 

individual or family to make an investment in the 

future. A home is an asset that can grow in value 

and provide capital to finance future needs of a 

family, such as college educations or retirement. 

Homeownership helps stabilize neighborhoods, 

strengthen communities, and stimulate economic 

growth. Research has shown that homeownership 

improves outcomes for children on a number of 

dimensions, including school achievement and 

dropout rates.

Rapid changes in the U.S. housing market 

highlight the necessity of encouraging a balanced 

and reasonable approach to homeownership, as 

well as the continuing need to provide appropriate 

support for renter families to take the step to 

homeownership. Strategic Goal A focuses on 

HUD’s activities to expand homeownership 

A3—Make the 

homebuying process 

less complicated and 

less expensive 

A5—Help HUDassisted renters become

homeowners A4—Reduce predatory 

lending through reform, 

education, and enforcement

HUD Strategic Plan 7
HUD’s Strategic Goals

opportunities for minorities, low-income families, 

and other Americans. HUD’s activities under this 

strategic goal will help to make homeownership 

more accessible, affordable, and secure for

millions of families. 

Six strategic objectives support this goal. 

Objective A1: Expand national 

homeownership opportunities. 

This objective reflects HUD’s goal of helping 

more families, particularly low- and moderateincome families, attain homeownership. Since its 

creation in 1934, FHA has insured more than 

33 million single-family mortgages totaling 

$1.6 trillion, and has served as a model for 

housing finance around the world. 

While the overall homeownership rate at the end 

of FY 2005 was 68.8 percent – constituting a 

record number of homeowners – the 

homeownership rate for low- and moderateincome families was only 52.8 percent. While 

recognizing that homeownership is not an option 

for everyone, HUD will focus on ensuring that the 

benefits of homeownership are made available to 

more American families. 

Objective A2: Increase minority 

homeownership. 

This objective continues to support the 

President’s goal, established in 2002, of 

eliminating barriers to minority homeownership

and adding 5.5 million more minority 

homeowners by 2010. A unique public-private 

partnership is bringing together government, the 

real estate and mortgage finance industry, 

affordable housing groups, and advocacy

organizations to work on a nationwide campaign

to increase homeownership opportunities for 

minority families. 

The homeownership rate for minorities in 2002 

was 49.2 percent, more than 25 percentage points 

below the 74.5 percent homeownership rate for 

nonminority households. Between 2002 and the 

end of FY 2005, 2.4 million minority homeowners 

had been added, on track to complete the 

President’s goal. The minority homeownership 

rate climbed to 51.2 percent at the end of 

FY 2005. 

Objective A3: Make the homebuying 

process less complicated and less 

expensive. 

Under this strategic objective, HUD is continuing 

to undertake reform of Real Estate Settlement

Procedures Act (RESPA) regulations that provide 

basic consumer protections in the homebuying 

process. HUD is working with industry and 

consumer stakeholders to improve disclosure of 

settlement costs; to have the disclosed costs be as 

firm as possible, thereby avoiding surprises at 

settlement; to provide consumers more choices; 

and to encourage innovation and competition in 

the marketplace. In addition, HUD will protect 

consumers through vigorous enforcement of 

RESPA and the Interstate Land Sales Act and 

provide a level playing field for all industry 

providers. 

Objective A4: Reduce predatory lending 

through reform, education, and 

enforcement. 

Predatory lending involves deception or fraud by 

creditors, mortgage brokers, or even home

improvement contractors. Unscrupulous

businesses manipulate borrowers through 

aggressive sales tactics or take unfair advantage of 

their lack of understanding of loan terms. 

Predatory lending is harmful not only to the 

consumer, but also harms the economic vitality of 

the community at large. Most often, those who 

are affected most severely are minorities, lowincome families, and the elderly. Under this 

strategic objective, HUD is committed to 

eliminating practices that permit predatory 

lending, working with other federal and state 

agencies, and vigorously enforcing RESPA rules 

that make the real estate settlement process more 

transparent and prohibit the payment of kickbacks 

and referral fees. HUD also is taking steps to 

strengthen education of potential homebuyers so 

they can recognize malicious practices. 

Objective A5: Help HUD-assisted renters 

become homeowners. 

HUD is committed to helping more HUDassisted renters become homeowners by providing 

greater flexibility for public housing agencies and 

through expanded use of Housing Choice

Vouchers for homeownership. Homeownership 

vouchers cover the cost of a downpayment or the 

ongoing costs of a mortgage. 

8 HUD Strategic Plan
Increase Homeownership Opportunities

HUD also expects to increase homeownership 

production and sales through the HOPE VI 

program, increase the number of public housing 

families purchasing homes, and increase the 

number of families achieving homeownership 

under the Native American and Native Hawaiian 

housing and loan guarantee programs. 

Objective A6: Keep existing homeowners 

from losing their homes. 

In addition to helping families become

homeowners, HUD is supporting new 

homeowners in maintaining their homeownership 

status through housing counseling, foreclosure 

prevention activities, and better monitoring of 

appraisers. Because HUD requires participating 

lenders to employ loss mitigation techniques, over 

59 percent of families who defaulted on FHAinsured mortgages in FY 2005 were able to work 

out their delinquencies and remain in their homes. 

Means and Strategies 

HUD employs a number of tools to expand 

homeownership opportunities. The overall

strategy is to carefully apply public-sector dollars, 

whether through mortgage insurance, grants, 

loans, or direct subsidies, to leverage the private 

market and make it easier for low- and moderateincome Americans to buy and keep their own 

homes. 

It also is worth remembering that a positive 

experience with affordable rental housing, covered 

in Strategic Goal B, is a stepping stone to 

homeownership for a majority of American

families. 

Provide assistance to help minorities, 

HUD-assisted renters, and other families 

reach homeownership.

 

HUD’s efforts to increase homeownership 

opportunities include the following initiatives: 

• Support homebuying by families who do not 

have enough cash for a traditional 

downpayment. HUD is providing direct 

downpayment assistance and plans to provide 

FHA the flexibility to offer mortgage 

insurance to homebuyers regardless of their 

downpayment. 

• Provide housing counseling to help renter 

families become aware of basic requirements 

and potential stumbling blocks to 

homeownership. Housing counseling 

activities are central to HUD’s efforts to

increase minority homeownership rates, 

which lag well behind the national average. 

Over 700,000 minority households have 

benefited from HUD-funded housing 

counseling since FY 2001, contributing to the 

President’s goal of adding 5.5 million new 

minority homeowners by the end of the 

decade. HUD is currently seeking OMB 

approval to collect, for the first time, client 

level data that will greatly enhance reporting 

capabilities regarding minority 

homeownership. By FY 2008, HUD 

anticipates being able to determine the 

number and characteristics of households 

receiving pre-purchase counseling, as well as 

the proportion of such clients that actually 

purchase a home. 

• Support and expand the use of Housing 

Choice Vouchers for homeownership. These 

vouchers can help low-income families 

purchase homes by covering the ongoing 

costs of a mortgage or providing a 

downpayment. 

• Help homebuyers leverage sweat equity by

financing modest repairs that do not require 

professional services through their FHAinsured mortgages. 

• Encourage property owners and managers of 

FHA-insured and assisted multifamily housing 

properties to establish and maintain 

Neighborhood Networks Centers. Renters 

can obtain training at Neighborhood 

Networks Centers to acquire or enhance their 

job skills, allowing them to increase their 

income to become eligible for 

homeownership. 

In addition, many of HUD’s core programs help 

low- and moderate-income families, including 

many minority families, to achieve their dreams of 

homeownership.2 FHA insurance, in particular, 

helps first-time homebuyers and other families 

who could have difficulties obtaining a mortgage 

by reducing the risk to private lenders. 

• Up to one million households obtain FHAinsured mortgages in an average year. 

• FHA also is undertaking special marketing, 

outreach, and education efforts. 

2 See “Aligning Resources with Results” (page 59) for a 

summary table of budget and staff resources allocated by

program and strategic goal. 

HUD Strategic Plan 9 
HUD’s Strategic Goals

HUD has several major formula grant programs, 

as well as competitively funded grants, that

provide important support for marginal 

homebuyers: 

• The HOME Investment Partnerships 

program provided $538 million for 

homeownership activities during FY 2005. 

Grantees use HOME funds to assist about 

30,000 new homebuyers per year, in addition 

to helping existing homeowners. 

• The Community Development Block Grant 

(CDBG) program provided $1.2 billion for 

housing activities, including owner-occupied 

rehabilitation, home purchase assistance, and 

rental housing, during FY 2005. 

• Native American Housing Block Grants,

Native American and Native Hawaiian 

housing and loan guarantee programs, and 

other programs expand homeownership 

opportunities for these disadvantaged groups. 

• Through the Self-Help Homeownership 

Opportunity Program, HUD engages faithbased and community-based organizations in 

leveraging sweat equity to create new 

homeowners.

Help homeowners recover from disasters. 

The magnitude of the losses to homes caused by 

Hurricane Katrina created a pressing need for 

HUD to prevent needless defaults from 

exacerbating the economic loss. In the following 

ways, HUD assists households whose homes have

been damaged or destroyed in Presidentiallydeclared disaster areas: 

• FHA eases financial burdens on mortgagors

with FHA-insured loans by issuing 

foreclosure moratoriums and requiring 

lenders to employ flexible loss mitigation 

tools. 

• FHA housing rehabilitation loan products 

help homeowners repair their damaged 

properties so they can rebuild their lives. 

• Under the 203(h) program, FHA also will 

permit 100 percent financing for the purchase 

of a new home by disaster victims whose 

residence (rental or owner-occupied) was 

destroyed or damaged in a disaster. The 

financing may be used to purchase a home

anywhere in the country. 

• Under the Housing Choice Voucher 

Homeownership Program, PIH provides 

mortgage loan technical assistance to 

participating homeowners and their lenders in 

the event their home is severely damaged or 

destroyed. 

• CDBG disaster recovery grants to support 

multiple aspects of rebuilding communities 

are discussed under Goal C. 

Support the fair and efficient functioning 

of housing and capital markets. 

It is critical that the basic functioning of housing 

and capital markets provides a sound foundation

for program efforts targeting marginal 

homebuyers. HUD’s enforcement of the Fair 

Housing Act helps provide equal opportunity for 

minority families, persons with disabilities, and 

other protected classes to become homeowners. 

HUD also plays an important role in several 

national institutions that keep housing finance 

markets functioning efficiently. 

• Ginnie Mae, which is part of HUD, keeps 

mortgages affordable by attracting capital into 

the residential mortgage market. Since its

inception in 1968, Ginnie Mae has made 

affordable housing a reality for more than

32 million low- and moderate-income 

American households by channeling global 

capital into the nation’s housing markets. 

Ginnie Mae’s mortgage-backed securities 

Strategy • Management • Results

More-flexible lending 

HUD has asked Congress for legislative 

flexibility to offer FHA mortgage insurance 

for first-time homebuyers regardless of 

how much cash they choose to invest in 

the transaction. 

Studies show that many renter 

households have sufficient income to 

make payments on a home, but may lack 

savings required to make a conventional 

downpayment of 10 or 20 percent. A lack 

of capital thus prevents these households 

from building equity through 

homeownership and benefiting from rising 

markets. 

By removing the downpayment barrier, 

FHA will make homeownership a realistic 

option for millions more renter families 

each year. 

10 HUD Strategic Plan
Increase Homeownership Opportunities

program guaranteed the issuance of 

$90.3 billion in securities during FY 2005, 

thereby providing capital to finance or 

refinance approximately 790,000 units of 

housing. The total volume of outstanding 

single-family mortgage-backed securities with 

Ginnie Mae guarantees was $376.5 billion on 

September 30, 2005. FHA-insured loans and 

Department of Veteran’s Affairs (VA)

guaranteed loans constitute an important part

of Ginnie Mae’s portfolio. 

• Ginnie Mae will continue to enhance the 

liquidity of its mortgage-backed securities by 

addressing both supply and demand. Investor 

demand will be increased through improved 

security disclosures and enhanced outreach to 

foreign and domestic investors. Lender 

supply will be increased by reducing the cost 

and time for issuing mortgage-backed 

securities, and by improving market execution 

due to investor demand. 

• HUD also regulates Fannie Mae and Freddie 

Mac, two housing government-sponsored

enterprises (GSEs), to ensure that they fulfill 

their public purposes as mandated by 

Congress.3 These purposes include providing 

stability and liquidity in the secondary 

mortgage market; providing secondary market 

assistance for mortgages, including those 

serving low-and moderate-income families; 

and promoting access to mortgage credit 

throughout the nation, including underserved 

areas. The GSEs are two of the largest 

participants in the U.S. residential mortgage

market. For example, Fannie Mae and 

Freddie Mac’s combined single-family and

multifamily mortgage purchases averaged 

$1.8 trillion in 2003–2004. HUD requires the 

GSEs to meet three affordable housing goals 

and home purchase subgoals each year in 

order to expand affordable housing 

opportunities for people and communities

traditionally underserved by the mortgage

markets, including areas with a higher 

proportion of racial minorities. 

Sustain homeownership for those who 

have attained it. 

For homeownership to fulfill its potential in

providing a stable environment and building 

 

3 The financial safety and soundness of the GSEs is regulated 

by the independent Office of Federal Housing Enterprise

Oversight. 

household wealth, it is critical that households 

enter homeownership with financing appropriate

for their needs. 

• HUD’s reform of RESPA rules will foster 

better understanding of the home mortgage 

process, thereby reducing the likelihood of a 

homeowner entering into a mortgage contract

with unfavorable terms and increasing the 

likelihood that borrowers will be able to 

maintain their homeownership status. 

• To prevent predatory lending, FHA has 

completed a number of measures to 

strengthen FHA endorsement and fraud 

detection procedures. These include 

prohibitions on quick resale of FHA 

properties known as “property flipping,”

stronger certification requirements for FHA 

appraisers, and greater vigilance for potential 

predatory lending activity. HUD will continue 

to aggressively pursue administrative actions 

against program participants who engage in

predatory lending. Participants include 

appraisers, real estate agents, brokers, and 

loan officers. 

• The Office of Native American Programs 

(ONAP) works with tribes and tribally 

designated housing entities to educate them

and tribal members about predatory lending. 

Through their promotion of the Section 184 

Indian Home Loan Guarantee program, 

regional loan guarantee specialists in each

Area ONAP office provide training and 

written guidance on how to recognize and 

avoid the predatory lender. 

Low- to moderate-income Americans are 

increasingly turning to the non-prime mortgage 

market to finance home purchases. However, 

risky features of non-prime loans, such as the high 

interest rates and prepayment penalties, 

dramatically increase the likelihood of default. 

Many homebuyers are simply unaware of less 

expensive and safer options, such as FHA-insured 

loans, for which they could qualify. 

Housing counseling is the most cost effective way 

to educate individuals and arm them with the 

knowledge they need to avoid unnecessarily high 

interest rates and predatory practices that can 

result in foreclosure. Anticipated improvements 

in the quality and types of housing counseling data 

available will ultimately enable HUD to track the 

results of housing counseling for individuals being 

victimized by predatory lending, painting a much 

HUD Strategic Plan 11
HUD’s Strategic Goals

12 HUD Strategic Plan

clearer picture of the impact of housing 

counseling to address this critical housing issue. 

The Department is currently seeking OMB 

approval to collect, for the first time, client-level 

data through HUD’s Client Activity Reporting 

System (CARS). HUD anticipates that by 

FY 2008, new data will begin to reveal the number 

of cases of predatory lending being addressed by 

counselors from HUD-approved agencies, as well 

as the outcomes associated with each of those 

cases. Additionally, HUD will be able to examine 

the new data by demographic and other 

characteristics, enabling the Department and 

counseling agencies to better focus resources for 

outreach, education, training, and other purposes 

to combat predatory lending more effectively. 

When homeowners get into financial difficulties 

and allow their mortgages to become delinquent, 

default poses a risk both for their own household 

and for FHA’s insurance funds. FHA has 

implemented a number of tools to address these 

risks: 

• HUD-approved housing counseling agencies 

are available to provide information on 

services and programs that can help 

homeowners, with or without FHA insurance, 

avoid foreclosure. 

• FHA’s Loss Mitigation program provides 

numerous options for lenders to help 

homeowners keep their homes rather than 

proceeding to foreclosure. 

• HUD has implemented an accelerated claim 

and asset disposition demonstration program. 

Under this demonstration, FHA sold loans 

that were highly likely to be foreclosed to a 

joint venture partnership under private-sector 

management. The managing entity 

determined the most financially viable option 

to dispose of and/or restructure the loans, 

which allowed some families to remain in 

their homes. 

Finally, the CDBG and HOME programs also 

help low-income homeowners control their 

housing costs by assisting with needed repairs, 

weatherization, and energy efficiency 

improvements. 

Performance Measures for Strategic Goal A 

HUD employs an integrated performance management approach that uses long-term goals in parallel 

with tracking indicators and annual performance goals that are published in the Annual Performance Plan 

and reported in the annual Performance and Accountability Report. 

Annual goals are supported by HUD’s internal Management Plan, which establishes program and 

operational management goals that are specific to program offices, as well as field offices. HUD will 

assess its long-term success in achieving this strategic goal by measuring the outcomes discussed below. 

Performance Measures 

• An additional 5.5 million minority households become homeowners by 2010, and the share of 

first-time minority homebuyers among FHA home purchase mortgages remains above 35 percent. 

• The share of FHA-insured home purchase mortgages for first-time homebuyers will remain above 

71 percent through 2011. 

• The share of first-time minority homebuyers among FHA home purchase mortgages remains 

above 35 percent. 

• Between FY 2006 and FY 2011, 48,000 households will purchase homes through the 

HOME Downpayment Assistance Initiative. 

• Between FY 2006 and FY 2011, over 739,000 households will receive homeownership assistance 

with CDBG, HOME, HOPWA, and IHBG funds. 

• Increase the number of families achieving homeownership under HUD’s Native American and 

Native Hawaiian housing and loan guarantee programs by guaranteeing 2,000 loans annually by 

FY 2011. 

• Between FY 2006 and FY 2011, approximately 219,000 claims are expected to be submitted under 

the FHA Loss Mitigation program. 
Increase Homeownership Opportunities

HUD Strategic Plan 13

• Between FY 2006 and FY 2011, 6.5 million families will receive HUD housing counseling. 

• At least 30 percent of clients receiving pre-purchase counseling will become mortgage-ready within 

90 days. 

• Minority clients will be at least 50 percent of total clients receiving housing counseling. 

• More that 50 percent of total mortgagors seeking help with resolving or preventing mortgage 

delinquency will successfully avoid foreclosure. 

• Take the following steps to promote FHA loan products as affordable mortgage options: 

o Make FHA business processes more compatible with those used in the mortgage industry. 

o Streamline FHA programs to make them more accessible to homebuyers. 

o Expand FHA products to meet the changing financial and housing needs of the public. 

• Ginnie Mae will maintain liquidity in the market for single-family mortgages, VA loans and eligible 

multifamily loans through FY 2011: 

o Securitize at least 95 percent of FHA single-family mortgages. 

o Securitize at least 95 percent of VA mortgages. 

o Securitize at least 95 percent of eligible FHA multifamily mortgages. 

• Implementation of RESPA regulatory changes will improve the mortgage finance process. 

• Enforcement of RESPA and the Interstate Land Sales Act will reduce unnecessary housing costs. 

• Between FY 2006 and FY 2011, a total of 10,000 new homeownership units will be created 

through the HOPE VI program. 

• Increase homeownership closings under existing PIH programs by 10,000 by FY 2011. 

• Through the HOPE VI Community and Supportive Services program, 800 public housing families 

will become homeowners between FY 2006–FY 2011, from a FY 2005 baseline of 2,454 families. 

• Ensure that the default rate in the SHOP program does not exceed the comparable rate for FHAinsured loans. 

• Through the SHOP program, create $225 million in household equity by 2011, as measured by the 

cumulative total of purchase price less outstanding mortgage balance at closing for assisted 

households. 

• FHA increases the percentage of at-risk loans that substantively comply with FHA program 

requirements. 

• Release an upgraded default data reporting system to accommodate lenders’ monthly electronic 

reporting of loans with a delinquency of 30 days or more and to enable lenders to report such data 

via an FHA Connection Interface to this system. 

• Publish a rule requiring FHA lenders to use the new default data reporting system to submit 

monthly electronic data on all loans that are 30 days or more delinquent. 

• Publish regulations for FHA mortgage insurance programs that increase lender compliance and 

accountability. 
HUD’s Strategic Goals

14 HUD Strategic Plan

External Factors 

No strategy is complete if it fails to consider the 

external or environmental forces that support or 

constrain success. Owner-occupied homes 

constitute the nation’s largest form of privately 

held capital, so it would be particularly unrealistic 

to expect HUD’s program efforts alone to be 

decisive in the future of American 

homeownership. Below are some of the social, 

economic, and institutional factors that affect 

HUD’s success in achieving its goals. 

• National and regional economic conditions 

have a strong impact on the homeownership 

rate and on several performance measures 

related to HUD homeownership programs. 

Market interest rates have had an important 

role in the affordability of homeownership. 

Counteracting the positive effect of affordable 

credit are recent substantial increases in home 

prices in some regions. As a result, first-time 

homeownership has become less attainable 

for low- and moderate-income families and 

their opportunities to capture future capital 

gains are reduced. 

• As Hurricane Katrina demonstrated, natural 

disasters and other events can have substantial 

regional impacts on the housing stock, 

homeownership rates, and economic 

conditions that affect mortgage default. 

• State and local grantees under the CDBG 

program have discretion about whether to use 

funds for homeownership, rental housing, or 

other community and economic development 

activities. 

• With respect to predatory lending, a variety of 

state and federal authorities regulate home 

mortgage lending, and none have a formal 

definition of predatory lending. Therefore, it 

is difficult to quantify the scope of predatory 

lending practices, whether market-wide or 

specific to FHA. The Federal Bureau of 

Investigation also has reported a sharp 

increase in mortgage fraud during 2004, which 

raises lending costs for banks even if the 

scams do not directly involve consumers. 

• Historical patterns of discrimination and 

differences in schooling and income levels 

make it more difficult for minorities to secure 

the income and credit history needed to 

become homeowners. Current discrimination 

in the homebuying market also reduces 

housing options available to minority 

households. 

• The impacts of HUD efforts may be limited 

by structural, economic, and social influences 

on neighborhood housing markets. These 

include the lack of financial sophistication of 

disadvantaged households, language barriers 

to understanding the intricacies of the 

American real estate finance and lending 

markets, and the numerous actors and 

inherent complexity of the home purchase 

and mortgage processes. 
Strategic Goal B: 

Promote Decent Affordable Housing 

“While increasing homeownership is one of HUD’s top priorities, we realize 

that is not a viable option for everyone. That is why one of HUD’s largest programs 

promotes affordable housing for families and individuals who rent.” 

—Secretary Alphonso Jackson 

Strategic Objectives Supporting Goal B 

Promote Decent

Affordable Housing

Overview

Promoting decent affordable housing is a central 

part of HUD’s mission. To this end, HUD seeks 

to expand access to, availability, and quality of 

affordable rental housing, improve the 

management accountability of public and assisted 

housing, improve housing opportunities for the 

elderly and persons with disabilities, and promote 

housing self-sufficiency. 

An estimated 5.18 million very low-income renters 

had worst-case needs for rental assistance in 2003. 

Most of these severe needs consisted solely of 

severe rent burdens: rents exceeding half of 

household incomes. In most metropolitan 

areas, a high demand for housing means that the 

market does not yield monthly rents reasonable 

for families with modest incomes. 

While recognizing the primacy of the private 

market, there is clearly a role for the federal 

government in addressing the challenges of 

housing affordability in America. Current policies 

provide a multi-faceted federal approach that 

directs resources in a measured and targeted 

manner to meet priority housing needs, and 

proposed reforms will strengthen these efforts. 

HUD offers direct rental assistance primarily 

through its Section 8 program, while also 

B1—Expand access to 

and availability of decent, 

affordable rental housing 

B5—Facilitate more 

effective delivery of affordable housing

by reforming public housing and the

Housing Choice Voucher 

program 

Objective B2—Improve the 

management accountability and 

physical quality of public and 

assisted housing 

B4—Promote housing

self-sufficiency B3—Improve housing 

opportunities for the elderly 

and persons with disabilities

HUD Strategic Plan 15
HUD’s Strategic Goals

increasing the production of affordable units 

though public housing development, HOME, and 

other grant programs that support housing 

construction and rehabilitation. Through its FHA 

mortgage insurance programs, the Department 

facilitates the development of affordable rental 

housing and helps insure that the financial markets 

provide adequate funding for affordable housing, 

as well as long-term, low cost financing for 

preservation of privately owned subsidized

housing. The Department’s efforts are 

complemented by federal tax credits that stimulate 

rental housing construction and rehabilitation, as 

well as by other federal programs serving specific 

populations, such as veterans and the rural poor. 

This Strategic Plan spans a transition phase for 

public and assisted housing programs. In recent 

years, HUD has strengthened these programs by 

demolishing obsolete public housing, changing the 

voucher program from a unit-based to a dollarbased system, and expanding opportunities for 

tenants to transition from rental housing to

homeownership. Under this plan, HUD will 

continue to reform and improve the public 

housing and voucher programs, as public housing 

agencies convert to asset-based management and 

implement proposed legislative reforms. These 

reforms are needed because success in meeting the 

nation’s affordable housing needs cannot be 

achieved without devolving decision-making 

authority to the state and local level. No one is in 

a better position to address a community’s specific 

affordable housing concerns than the community

leaders themselves. The proposed reforms would 

increase local discretion, enabling PHAs to 

improve efficiency and maximize the number of 

families receiving assistance. In addition, HUD 

grant programs provide local grantees with 

significant levels of flexibility to use funds in a way 

that best meets their communities’ needs. 

Objective B1: Expand access to and 

availability of decent, affordable rental 

housing. 

To help low-income families afford the costs of 

rental housing, HUD provides rental assistance to

more than four million households through public

housing and assisted housing programs. HUD’s 

largest program, the Housing Choice Voucher 

program, is a $15 billion asset that currently 

provides rental assistance to 1.8 million lowincome families. Additionally, approximately one 

million families live in public housing. 

Through the HOME program, HUD provides 

states and localities with flexible funding they can 

use to produce affordable rental housing. 

Through the use of FHA insurance, HUD 

provides flexible, long-term insurance for private 

investors and lenders to support the production

and preservation of affordable rental housing. 

The Department also funds a number of rental 

assistance programs geared to special populations: 

the Housing Opportunities for Persons with 

AIDS (HOPWA) program and homeless

assistance programs are two important examples. 

Within the constraints of its budget, HUD seeks 

to provide affordable housing opportunities to as 

many families as possible. HUD’s several housing 

assistance programs together reduce the potential 

number of families with worst case housing needs 

by about half.

HUD also will work to develop creative solutions 

to the problems presented by local regulatory 

barriers and other obstacles to the development of 

affordable rental housing. 

The Department, through FHA’s multifamily 

mortgage insurance programs, improves the 

affordability of rental housing and of healthcare 

facilities, such as nursing homes and assisted living 

facilities. FHA mortgage insurance is often used 

in conjunction with Low Income Housing Tax 

Credits and other federal, state, and local subsidies 

to produce and support affordable housing. 

Objective B2: Improve the management 

accountability and physical quality of 

public and assisted housing. 

The Department will build on recent successes in 

improving the management accountability of 

public and assisted housing. HUD has instituted a 

comprehensive evaluation system for the public 

housing program and assisted multifamily housing 

program, and will develop a new system for the 

evaluation of the Housing Choice Voucher 

program. The current assessment systems identify 

PHAs in need of technical assistance from HUD 

staff. As a result, the number of units managed by 

PHAs designated “troubled” has declined since 

2003, and HUD will continue to track this 

measure. The Department also will continue to 

hold PHAs accountable through measures that

track the timely performance of HOPE VI grants 

and PHAs’ submission of data to HUD. 

HUD is committed to improving the quality of 

HUD’s public and assisted housing and ensuring 

that all subsidized families live in units that meet 

16 HUD Strategic Plan
Promote Decent Affordable Housing

basic quality standards. By reducing energy 

consumption and increasing the amount of

leveraged private financing, PHAs can free up 

capital and operating funds for the development 

and modernization of existing properties.

Stewardship and preservation of the current 

assisted housing stock is critical for achieving this 

strategic goal. As part of the effort to preserve 

affordable housing through the Mark-to-Market 

program, HUD sets appropriate market-level rents 

for HUD-assisted housing – thereby eliminating 

subsidy overpayments – and incorporates policies 

and procedures to ensure good management and 

good physical condition at properties that have 

gone through the program. 

Objective B3: Improve housing 

opportunities for the elderly and persons 

with disabilities. 

i

 

Elderly households and persons with disabilities 

have special needs that require flexible housing 

strategies. HUD’s strategy is to maximize the 

independence of these households. HUD’s 

programs, where appropriate, promote 

community-based living opportunities for the 

elderly and persons with disabilities, and make 

supportive services available to residents of rental 

housing, enabling them to live as independently as 

possible in the most integrated setting. One way 

HUD supports independence for persons with 

disabilities is to promote visitability in all HUDfunded projects. Another approach is broader: to

increase awareness and compliance with 

accessibility laws in the multifamily housing 

market. 

HUD’s Section 202 and 811 programs for elderly 

households and persons with disabilities are 

unique among HUD programs in providing the 

only construction financing programs for 

affordable supportive rental housing for the target 

populations. The Section 811 program also 

provides rental assistance vouchers to persons 

with disabilities through the Mainstream program. 

Through the Designated Housing Program, HUD 

is providing technical assistance to PHAs to 

encourage the designation of housing for the 

elderly, persons with disabilities, and the elderly 

combined with persons with disabilities when the 

local demographics support the need for the 

program. The technical assistance provides 

guidance to meet the Designated Housing Plans’ 

statutory requirements contained in Section 7 of 

the U.S. Housing Act of 1937. HUD tracks and 

monitors the Designated Housing Plans. 

Objective B4: Promote housing selfsufficiency.

This objective, together with Objective A.5, “Help 

HUD-assisted renters become homeowners,” 

reflects the Department’s intention to maximize 

the role of public and assisted housing as a 

springboard to advance low-income families 

toward housing self-sufficiency and 

homeownership. Recent research suggests that 

severe rent burdens are often temporary.4 As 

federal resources are limited, it is critical to 

structure housing programs to help as many 

families as possible by promoting independence 

rather than long-term dependence on housing 

assistance. 

Objective B5: Facilitate more effective 

delivery of affordable housing by 

reforming public hous ng and the 

Housing Choice Voucher program. 

The period covered by this Strategic Plan will 

include major transitions for HUD’s public 

housing and voucher programs. To improve the 

efficiency, effectiveness, and long-term 

sustainability of these key rental housing 

programs, the Department is pursuing reforms 

across regulatory and legislative levels. Themes 

of the efforts include: 

• Simplifying programs and burdensome

administrative requirements; 

• Giving PHAs greater flexibility; 

• Requiring more accountability of PHAs; 

• Encouraging tenant work contributions; 

• Lessen intrusion in families’ lives; and 

• Containing program costs. 

HUD also has implemented regulatory change 

requiring PHAs to transition to asset-based 

management, representing a major evolution in 

the way PHAs manage their inventory of public 

housing. Beginning in 2007, under this new, 

private-market approach, operating subsidies will 

be allocated based on property costs typical of the 

broader multifamily management industry. PHAs 

that own and operate 250 or more units are 

4 See “Affordable Housing Needs: A Report to Congress on

the Significant Need for Housing,” HUD Office of Policy 

Development and Research, 2006. 

HUD Strategic Plan 17
HUD’s Strategic Goals

required to operate using the asset management 

model. HUD will work with PHAs, providing 

training, guidance, and technical assistance to 

effect the transition. 

Means and Strategies 

Expand access to affordable rental 

housing. 

HUD has three major rental assistance programs 

that collectively provide rental subsidies to more 

than four million households nationwide: the 

Section 8 voucher program, currently known as 

Housing Choice Vouchers program, the projectbased Section 8 program, and the public housing 

program. A substantial share of HUD’s budget is 

devoted to renewals of Housing Choice Voucher 

and project-based Section 8 contracts, as well as to

operating and capital funds that support public 

housing. In addition, the Office of Housing 

continues to preserve affordable housing through 

the Multifamily FHA insurance program and the 

Mark-to-Market and Mark-Up-to-Market 

programs, giving property owners feasible options 

for continuing to provide affordable housing. 

Proposed reform of the HUD Section 8 voucher 

program and public housing – discussed later in

this chapter – will create possibilities for an 

expanded pool of low-income families to access 

affordable assisted housing. 

A number of HUD’s programs and initiatives 

listed below help to annually increase the number 

of families that obtain access to affordable rental 

housing: 

• The HOME Investment Partnerships 

program – since 1992, participating 

jurisdictions have spent more than 52 percent 

of HOME on rental housing; 

• The Supportive Housing programs for the 

elderly (Section 202) and for the disabled 

(Section 811); 

• The Housing Opportunities for Persons with 

AIDS, or HOPWA, program; 

• The Native American Housing Block Grant 

program; 

• The CDBG program; and 

• FHA multifamily insurance. 

Other federal programs, in conjunction with the 

FHA multifamily insurance program, play a 

significant role in expanding access to affordable

rental housing. These include the Low-Income

Housing Tax Credit and tax-exempt bonds – both 

of which were significantly expanded in recent 

years – as well as programs of the Rural Housing 

Service at the Department of Agriculture.

To further expand the number of residents that 

benefit from the existing supply of subsidized 

rental housing, HUD is undertaking several 

efforts: 

• Expand the amount of leveraged private 

sector financing to make more public housing

units available for occupancy by eligible 

families; 

• Increase the timely performance of projects 

currently in the HOPE VI pipeline to get 

units built and available to families more 

quickly; 

• Transition the management of public housing 

to asset-based management and propose 

legislative reforms to the Housing Choice 

Voucher program. 

HUD also will work to ensure that the stock of 

assisted, privately owned housing is not 

diminished as a result of opt-outs, pre-payments, 

and other changes, and that the adverse impacts of

such events upon tenants is minimized. In 

particular, the expiration of long-term Section 8 

project rental subsidies (Housing Assistance 

Payments or HAP contracts) can leave properties 

vulnerable to being removed from the nation’s 

stock of affordable housing. HUD will continue 

the following affordable housing preservation 

activities: 

• Renew HAP contracts on all subsidized units 

that meet housing quality standards, subject to 

the availability of appropriations. 

• Preserve the HUD-assisted private housing 

stock by using the Mark-to-Market program 

to restructure mortgage debt and Section 8 

rent subsidies. An estimated 75 percent of the 

Mark-to-Market projects are restructures that 

use FHA insurance. 

• Increase rents in certain areas through the

Mark-Up-to-Market program to remove the 

financial incentive for owners to opt out of a 

housing assistance contract. 

• Execute and enforce use agreements as part 

of the sale of HUD-owned property or as a 

condition of prepayment of FHA multifamily 

insurance. 

18 HUD Strategic Plan
Promote Decent Affordable Housing

• Refinance older Section 202 elderly housing 

with FHA insurance to permit modernization 

and repairs. 

• Encourage owners of multifamily assisted 

rental housing to maintain affordability by 

offering incentives, including increased 

distributions, higher rents to facilitate a 

transfer to a nonprofit, and structured 

refinancing with FHA insurance to

recapitalize properties for rehabilitation or

other purposes. 

• Provide enhanced housing vouchers to

families so they can continue to live in the 

same property when project-based rental 

assistance has been terminated. 

Finally, HUD plans to continue its efforts to 

expand families’ access to affordable privatemarket housing through several activities:

• Offer FHA multifamily mortgage insurance, 

especially in underserved areas. 

• A recently published rule has simplified and 

deregulated many aspects of the project-based 

voucher program. 

• Conduct research cooperatively with federal 

and private partners to identify and accelerate 

the diffusion of cost-saving innovations in

housing construction. 

• Maintain a regulatory barriers clearinghouse 

for sharing information on how to alleviate 

obstructions to the development of affordable 

housing. 

Help public and assisted housing 

developments and assisted families 

recover from disasters. 

The Gulf Coast hurricanes of 2005 created the 

need for HUD to aid recovery of public housing 

authorities and private owners of subsidized 

developments in Presidentially-declared disaster 

areas. To assist the recovery, FHA and the Real

Estate Assessment Center (REAC) have been

inspecting projects to assess the damage, 

identifying vacant units in disaster areas, and 

offering disaster victims priority status in 

multifamily projects. 

Strategy • Management • Results

Asset Management of Public Housing 

In FY 2005, HUD published a rule to 

change the funding mechanism for 

operating public housing to make it more 

cost-effective. Implementation of this new 

funding formula will be in FY 2007. The 

new formula funds individual public 

housing properties rather than the sum of 

units owned by a public housing authority. 

In the process, properties that are 

obsolete or excessively costly will be

identified, and new economic incentives 

for PHAs to address these conditions will 

be created. 

Asset-based funding is rooted in a 

detailed model of operating costs of 

comparable privately owned properties. 

The study was completed and the funding 

model created by Harvard’s Graduate 

School of Design. In keeping with the 

high stakes involved for PHAs, HUD 

undertook extensive negotiations for the 

rulemaking and sought the endorsement 

of an advisory committee. 

Through the Katrina Disaster Housing Assistance 

Program and local PHAs, HUD is providing up to 

18 months of transitional housing assistance to

the thousands of households displaced by

Hurricane Katrina who were previously HUD 

assisted. Under the supplemental appropriation, 

HUD’s efforts will expand to include some 

previously ineligible families, as well as households 

displaced by Hurricane Rita. 

Through waivers provide by HUD, PHAs have 

obtained some relief as they direct resources to 

disaster-affected families. 

The Gulf Opportunity Zone Act is helping to 

meet the critical housing need caused by 

Hurricane Katrina by excluding employerprovided housing benefits worth up to $600 per 

month from employees’ taxable income, while 

also giving employers a tax credit for providing 

such housing. 

Request legislative remedies to address 

long-standing problems in public housing 

and Housing Choice Voucher programs. 

HUD has proposed legislation to reform public 

housing and vouchers. The State and Local 

Housing Flexibility Act (SLHFA) builds on 

changes made in the FY 2005 budget that shift the 

Tenant Based Section 8 program – which assisted 

4.8 million individuals in FY 2005 – from a “unitbased” to a “budget based” system, allowing 

HUD Strategic Plan 19
HUD’s Strategic Goals

PHAs more flexibility in the way they allocate 

voucher funds. 

The legislation includes the following key 

elements: 

• Making permanent the “budget based” system 

for allocating Tenant-Based Section 8 funds 

to PHAs, while increasing options for 

communities to react to changing needs. 

Specifically, the Act would give PHAs: (1) the 

ability to set their own market rents based on 

local conditions, rather than relying on HUD 

to predict rents for every market in the nation; 

and (2) the option to simplify and design 

tenant policies that will provide incentives for 

work, save money, and allow them to serve 

even more families. 

• Giving PHAs an expanded range of options 

for determining rents for public housing units. 

Some of the notable options include the use 

of a flat amount of rent for each dwelling unit 

that it owns and operates, based on the rental

value of the unit; a tiered system of rents 

based on tenant income; or a structure based 

on rent as a percentage of tenant income. 

Regardless of the rent method chosen, each 

PHA must establish a minimum amount of 

rent that is to be paid, thus ensuring a 

minimum amount of rent receipts. 

• The legislation also builds on the success of 

the Moving to Work (MTW) demonstration 

by making MTW a permanent program. The 

MTW program would provide full fungibility 

and flexibility of operating, capital, and 

voucher funds, as well as allow PHAs to

develop innovative, locally-designed housing 

and self-sufficiency strategies. 

The SLHFA proposal provides incentives and 

regulatory flexibility empowering local housing 

agencies to maximize the efficiency of their 

funding in this time of increasing budgetary 

constraints. 

Improve physical conditions and 

management accountability. 

Improving the performance of housing 

intermediaries in meeting HUD’s physical

condition standards for public and multifamily 

housing is a high priority for this Administration

and was, therefore, included in the President’s 

Management Agenda (PMA) for HUD. In 2000, 

only 70 percent of public housing units and 

85 percent of privately owned, multifamily assisted 

housing met these standards. By the end of 

FY 2005, both multifamily and public housing 

units had shown significant improvement, with 

96 percent of multifamily and 85 percent of public

housing units meeting the standards. The 

Department has several current tools and is 

developing others to continue to improve the 

Strategy • Management • Results

Measuring and reducing rent subsidy 

errors 

Research conducted by the Office of

Policy Development and Research 

(PD&R) in 2000 measured errors in 

HUD’s subsidy payments for assisted 

housing, and found that gross erroneous 

payments related to program sponsor 

errors and omissions totaled $2.2 billion. 

Another $1 billion of errors was found to 

be caused by intentional tenant 

misreporting of income. 

HUD initiated a series of monitoring and 

corrective actions based on this research. 

By the end of 2004, follow-up studies 

showed that gross improper payments 

due to program sponsor and income 

reporting errors had decreased to 

approximately $1.2 billion, a reduction of 

62 percent over four years. Related 

studies of program sponsor billing errors 

for the Office of Housing indicate that 

these errors are being reduced as well. 

These efforts have made HUD an 

exemplar of success concerning the 

erroneous payments reduction goal of the 

President’s Management Agenda. PD&R 

continues to measure assisted housing 

subsidy errors on an annual basis, and 

the Offices of Housing and Public and 

Indian Housing are continuing and 

refining the intensive monitoring and 

training efforts that account for the 

success of this program. 

A major HUD initiative in 2006 is to 

implement an income matching system 

for tenants of public housing and voucher 

programs. This system should 

significantly reduce both tenant 

misreporting of income and income 

measurement error by program sponsors, 

and better focus program resources on 

those most in need of assistance.

20 HUD Strategic Plan
Promote Decent Affordable Housing

physical quality and management accountability of 

public and assisted housing:

• Continue to use REAC’s Public Housing 

Assessment System (PHAS) to assess public 

housing management and conditions. Local 

field offices intervene to improve a PHA’s 

overall condition when it is designated as 

“troubled.” The local field office provides 

assistance by entering into a memorandum of 

agreement with the PHA to facilitate timely

and appropriate improvement in each weak

area identified through PHAS. Field offices 

may obtain additional assistance for 

“troubled” PHAs from the Recovery and 

Prevention Corps (RPC). 

• Support the transition to asset management of

public housing by developing property-based 

management tools, notices, accounting and 

budgeting guidance, training, and technical 

assistance. 

• Move toward the next-generation system for 

assessing housing agencies’ voucher programs 

under the Section 8 Tenant-Based program. 

• Continue to monitor privately owned assisted 

multifamily housing through Section 8 

contract administrators who perform 

management and occupancy reviews, and

through physical inspections on 100 percent 

of their portfolios. 

• Use the Mark-to-Market program to ensure 

that the management of HUD-assisted, 

privately owned housing meets its operating 

obligations, resulting in the ongoing 

maintenance of proper physical standards at 

these properties. Through this program, the 

Office of Affordable Housing Preservation 

has created 955 escrows totaling over 

$230 million to improve developments or 

address repairs that existed prior to mortgage 

restructuring. These escrows cover over 

80,000 housing units, of which nearly 62,000 

units in 734 projects have been rehabilitated 

to date. To ensure ongoing viability of 

projects, HUD also requires owners who are 

restructuring mortgages to increase their 

annual deposits to replacement reserve 

accounts. Through 2005, restructuring has 

resulted in increases from $245 to $484 per 

unit per year in average replacement reserves. 

In addition, HUD has increased the amount 

of replacement reserves at closing by over 

$257 million. 

• Use REAC data on the financial soundness of 

privately owned assisted multifamily housing, 

physical quality of the stock, and satisfaction 

of the residents to refer substandard 

properties to the Departmental Enforcement 

Center (DEC). The Office of Multifamily 

Housing Programs oversees more than 30,000 

properties comprising over 2.5 million units, 

with particular emphasis on privately owned 

properties that REAC identifies as 

substandard in one or more areas. 

• Multifamily properties with REAC scores 

between 0 and 60 are referred to DEC. HUD 

requires repairs to be completed on these 

properties within 60 days. If property 

conditions do not meet HUD requirements, 

HUD will force compliance or take 

appropriate enforcement action. For some

noncompliant multifamily development 

owners, DEC makes civil referrals to the 

Department of Justice or criminal referrals to 

HUD’s Inspector General. 

• Implement a mandatory conversion rule 

during FY 2006 to accelerate the removal of 

public housing units that are beyond repair. 

• Work with the Department of Justice to make 

Weed and Seed grants available for their anticrime, anti-drug activities. PHAs also have 

flexibility to use their operating subsidies for 

security purposes. 

HUD’s Rental Housing Integrity Improvement 

Project (RHIIP) is contributing to substantial 

reductions of errors in income and rent 

determinations for the public housing, Housing 

Choice Voucher, and assisted Multifamily 

programs (see sidebar). RHIIP is making further 

progress on several fronts: 

• Developing and implementing the Enterprise 

Income Verification System, a tool for 

program administrators to verify tenants’ 

income in a more effective and timely way to 

eliminate most remaining improper payments 

caused by administrator errors and tenant 

underreporting of income; 

• Institutionalizing the use of Rental Integrity 

Monitoring reviews, which monitor program 

processing using risk-based targeting 

indicators and confirm that necessary 

corrective actions have been effective; 

• Implementing stronger performance 

incentives and sanctions for HUD’s 

intermediaries and tenants; 

HUD Strategic Plan 21
HUD’s Strategic Goals

• Assessing PHA billing errors for the public

housing and voucher programs and 

implementing corrective actions; 

• Automating billing verifications; 

• Providing education on program processes 

and benefits for tenants, program 

administrators, and HUD monitoring staff;

• Simplifying the rent and subsidy structure for 

public housing and voucher programs to the 

extent allowed by current law or proposed

legislation, if passed. 

HUD also will provide resources to PHAs to 

improve their conditions and protect the nation’s 

investment in the public housing stock. The 

Department is strengthening the three primary 

mechanisms for providing financial support for 

public housing: 

• Expand and strengthen the new Capital 

Financing Program, which leverages federal 

funds and attracts private capital to address 

the backlog in public housing capital 

improvement needs. PHAs can now borrow 

from banks and issue bonds using their 

Capital Fund grants as collateral or debt

service. HUD is also developing a new rule 

that would allow PHAs to use either Capital 

or Operating funds for financing activities. 

• Put public housing on sound financial footing 

by requiring asset-based management 

consistent with that in the private sector and 

providing funding at the project level rather 

than PHA-wide funding. These changes are 

consistent with recommendations from a 

Congressionally-mandated study conducted 

by the Harvard University Graduate School of

Design. Asset management will enable PHAs 

to hold managers and other employees 

accountable and will provide PHAs 

information regarding the true cost of specific 

developments. 

• Support the timely completion of HOPE VI 

projects, which have succeeded in 

demolishing the most severely distressed 

public housing and are replacing them with 

mixed-income neighborhoods and 

developments. HUD will maintain the 

necessary monitoring and oversight staff and 

contracts to successfully use the remaining 

multi-billion dollar pipeline of funding. 

Increase housing options for the elderly. 

HUD is implementing a number of new policies 

designed to assist the elderly. These policies, 

which were authorized in the American 

Homeownership and Economic Opportunity Act 

of 2000 and the FY 2001 VA-HUD 

Appropriations Act, will have the following 

benefits: 

• Expand eligibility for the Assisted Living 

Conversion Program to include not only 

Section 202 projects, but all HUD multifamily 

projects with project-based Section 8 and with 

Section 236 and Section 221(d)(3) insurance. 

• HUD now allows nonprofit sponsors of 

Section 202 developments to form limited 

partnerships with for-profit entities, enabling 

them to compete for low-income housing tax 

credits, and also to take advantage of mixed 

financing approaches. 

• Support recapitalization of Section 202 

projects by encouraging prepayments and

refinancing with multifamily insurance 

programs so that at least 50 percent of the

annual savings are used in a manner that 

directly benefits the residents. 

• Encourage service coordinators to assist lowincome elderly families living near, as well as 

those residing in, multifamily assisted housing 

designated for the elderly and people with 

disabilities. 

In addition to implementing these new provisions, 

HUD will continue to use core programs to help 

low-income seniors obtain suitable and affordable

living environments that support independence: 

• Provide mortgage insurance to finance the 

construction and rehabilitation of assisted 

living facilities through the Section 232 

program. 

• Permit housing rental vouchers to be used for 

the housing costs in assisted living facilities. 

• Provide Home Equity Conversion Mortgages 

(HECMs), or “reverse” mortgages, to allow 

senior homeowners to convert accumulated 

equity in their homes to income in the form

of monthly payments, a lump sum, or a line of 

credit. HECMs can help elderly homeowners 

adapt their homes to accommodate changing 

physical needs, or simply pay medical and 

living expenses to maintain their quality of 

life. 

22 HUD Strategic Plan
Promote Decent Affordable Housing

• Provide affordable housing and rental 

subsidies for older renters through 

Section 202, and convert elderly housing to 

assisted living, or create new assisted living 

facilities. 

Strategy • Management • Results

Reduce operating costs through energy 

efficiency 

HUD’s comprehensive Energy Action Plan is 

aimed at reducing a growing cost of operating 

public and assisted housing, as well as 

housing financed through HUD's formula and 

competitive grant programs. The Department 

spends some $4 billion each year on utilities –

more than 10 percent of its budget – through 

subsidies to renters, private building owners, 

or public housing agencies. Energy efficiency 

improvements could yield significant cost 

savings to the Federal government, property 

owners, and building residents: reducing 

HUD’s energy bills by just five percent could 

yield a savings of $1 billion by FY 2011. 

The Energy Action Plan is aimed at 

expanding the use of Energy Star products 

and appliances through HUD programs, 

incorporating energy efficient construction and 

building management techniques in public 

and assisted housing, in rental housing 

supported through the HOME and CDBG 

programs, and in key competitive grant 

programs, such as the Section 202/811 

programs. It is primarily an operational plan 

aimed at upgrading the energy efficiency of 

existing housing by putting proven energyefficient products and appliances to work 

immediately through existing programs. This 

is accomplished through education and 

outreach, interagency cooperation, marketbased incentives, public-private partnerships, 

and research and development of energyefficient technologies. 

Through HUD’s Phase II Energy Plan, HUD 

will continue to implement strategies to 

reduce energy and other utility costs. Actions 

will include providing information, technical 

assistance, and training to HUD customers 

and partners, promoting Energy Efficient 

Mortgages for new homebuyers, providing 

incentives for energy efficiency in competitive 

grant programs, streamlining performance 

contracting in public housing, encouraging the 

adoption of the Energy Star Qualified New 

Homes label for newly-built or substantially 

rehabilitated housing, and exploring 

incentives for energy efficiency in assisted 

multifamily housing. 

• Provide substantial numbers of affordable

housing units for elderly households through 

HUD’s public housing and Section 8 

programs, and through supportive service 

interagency agreements. 

Increase housing oppor unities for 

persons with disabilities. 

t

President Bush launched the New Freedom 

Initiative in 2001, with an executive order charging 

HUD and five other federal agencies to improve 

access to services and opportunities for 

community integration of persons with disabilities. 

HUD has several key initiatives to implement the 

President’s order: 

• Permitting people with disabilities to use their 

Section 8 rental vouchers to make mortgage 

payments to purchase their own homes. 

• Continuing a pilot program in 11 states called 

Project Access, a joint effort between HUD 

and the Department of Health and Human 

Services (HHS), designed to ease the 

transition of nonelderly persons with 

disabilities from nursing homes into 

community living. 

• Through the Mainstream Housing 

Opportunities for Persons with Disabilities 

program, awarding vouchers to PHAs and 

nonprofit organizations to enable persons 

with disabilities access to affordable private 

housing of their choice. 

• Through a memorandum of understanding 

with the Department of Justice and Internal 

Revenue Service, ensure that multifamily 

properties within the Low-Income Housing 

Tax Credit program, the number-one 

producer of low-income housing, comply with 

federal accessibility standards. 

HUD’s Shelter Plus Care grants provide about 

$300 million annually in support of rental 

assistance for homeless individuals living with 

disabilities, and grantees match the funding with 

supportive services. In addition, HUD is 

continuing to vigorously enforce the Fair Housing 

Act and other federal laws prohibiting

discrimination against people with disabilities. 

HUD Strategic Plan 23
HUD’s Strategic Goals

• In FY 2006, HUD will award more than 

$19 million in fair housing grants to fund 

organizations leading the fight against housing 

discrimination. 

• HUD will continue its historic partnership 

with the National Association of Home 

Builders aimed at ensuring that multifamily 

housing complies with the Fair Housing Act’s 

design and construction requirements. 

Promote housing self-sufficiency. 

Federal resources for housing assistance are scarce 

in proportion to total housing needs. 

Accordingly, public housing is intended to be a 

transitional program rather than a permanent 

institution, particularly for families who are 

neither elderly nor have disabilities. Returning the 

program to its roots will ensure that many more 

needy families can benefit from a period of stable

housing assistance on their path to the American

dream. 

The Family Self-Sufficiency (FSS) program is one 

of HUD’s tools for helping families in the 

voucher and public housing programs build assets, 

increase their incomes, and move to 

homeownership. 

• Participating families establish personal goals 

and work with a service coordinator who

provides referrals for supportive services, 

such as child care, transportation, education, 

or job training. 

• FSS has an escrow component that helps 

families build savings. As a family’s earnings 

increase, an amount equal to the increase in 

the family’s rent is deposited in an escrow 

account that they can use to purchase a home, 

obtain higher education, or achieve other 

personal goals.

A number of additional programs also help

families in public and assisted housing make 

progress toward housing self-sufficiency: 

• The Resident Opportunities and Self 

Sufficiency (ROSS) program links public

housing residents with supportive services, 

resident empowerment activities, and 

assistance in becoming economically selfsufficient. 

• HUD supports the creation of Neighborhood 

Networks centers and other computer centers 

in assisted multifamily housing developments 

and provides grants for these centers in public 

housing. The technology centers help lowand moderate-income residents gain 

knowledge and job skills through the use of 

computer learning. 

• HUD is expanding enforcement of Section 3 

of the HUD Act of 1968, which ensures that 

HUD-funded construction projects 

simultaneously create employment and 

training opportunities for low-income

residents. 

Reduce regulatory barriers 

to the development of affordable housing. 

In FY 2003, HUD established “America’s 

Affordable Communities Initiative: Bringing 

Homes within Reach through Regulatory 

Reform.” This major Department-wide effort is 

focused on reducing the costs of developing 

affordable housing. A team of senior HUD staff 

is developing new approaches and incentives that 

can motivate local efforts, as well as reviewing and 

reforming HUD’s own regulations that may be 

barriers to expanded housing affordability. 

HUD is working with state and local governments 

(and their representative organizations), 

homebuilders, and nonprofit organizations to 

support coalition building that can address the 

regulatory barrier issue at the local level. Through 

the Regulatory Barriers Clearinghouse, the 

Department maintains and disseminates important 

information on regulatory barriers to local 

governments and housing providers, as well as 

new strategies and solutions developed by local 

communities. Annual “Robert Woodson Awards” 

are given to state and local governments who 

exemplify the very best effort in regulatory

reform. 

HUD has made regulatory reform a priority in 

competitive grant programs, awarding additional 

points to applicants located in areas where there 

has been significant regulatory reform. Further, 

the Initiative Office carefully reviews all proposed 

HUD regulations to ensure that they enhance 

rather than restrict housing affordability. 

Reform and strengthen housing programs 

for populations with special needs. 

HUD’s Section 202 and Section 811 programs for 

elderly households and persons with disabilities 

are unique among HUD programs in providing 

the only construction financing program for 

affordable supportive housing for the target 

population. The Department’s objective is to 

strengthen the programs by using the results of 

24 HUD Strategic Plan
Promote Decent Affordable Housing

on-going comprehensive evaluations to develop 

better techniques, methods, and procedures. 

which will assess whether the Section 811 

program has been effective in meeting the needs 

To date, of persons with disabilities. there have been a number of concerns 

that have been expressed about the Section 202 

and Section 811 programs, including relatively 

high project costs, lengthy project development 

schedules, inadequate capital advance funds, and 

insufficient funding that results in reduced units 

being developed. 

In addition to studies by PD&R, the Department 

is proposing the following measures to help 

improve the effectiveness of the Section 202 and 

811 programs: 

• encouraging the use of mixed financing 

models that use appropriated funds to

The Office of leverage private dollars; Policy Development and Research 

(PD&R) recently completed its first study of the 

Section 202 program, which assessed whether the 

program was effective in meeting the needs of the 

elderly, as well as the program’s delivery 

mechanisms, outputs, and outcomes. The 

completed report of the program found that the 

Section 202 program produced good quality 

housing and is rated very highly by its residents. 

PD&R is currently conducting a second study, 

• ensuring that sufficient funds are made 

available to sponsors; 

• creating alternative allocation strategies; 

• developing strategies that shorten 

development times; and 

• supporting inter-agency efforts to provide 

assistance to elderly households. 

Performance Measures for Strategic Goal B 

HUD employs an integrated performance management approach that uses long-term goals in parallel 

with tracking indicators and annual performance goals that are published in the Annual Performance Plan 

and reported in the annual Performance and Accountability Report. 

Annual goals are supported by HUD’s internal Management Plan, which establishes program and 

operational management goals that are specific to program offices, as well as field offices. HUD will 

assess its long-term success in achieving this strategic goal by measuring the outcomes discussed below. 

Performance Measures 

• Expand affordable rental housing by 1.346 million units through the Low-Income Housing Tax 

Credit, CDBG, HOME, HOPWA, and IHBG funds, by FY 2011. 

• Increase the proportion of FHA Multifamily insurance used with Low-Income Housing Tax 

Credits from the baseline level of 24 percent of endorsements used with LIHTC. 

• The total number of remaining years of affordability provided for low-income households residing

in units produced from the investment of HOME funds will be 1.15 million years by FY 2011, up 

from 980,000 currently. 

• The number of HOME production units completed (includes rental units produced, new 

homebuyers, and existing homeowners assisted) will be 243,000 by FY 2011. 

• HOPE VI projects will complete all unit production within an average period of 7 years from 

execution of the grant agreement, and by 2011, all HOPE VI grants from 1993 to 2004 will have 

completed all unit production. 

• The HOPE VI program will leverage a projected total of $4 billion in private sector financing 

between 2006 and 2011. 

• The Capital Fund Financing program will leverage a projected total of $315 million in private 

financing for public housing projects between 2006 and 2011. 

• Implement the Public Housing Energy Efficiency program to control energy consumption in

public housing properties and, by FY 2008, develop a baseline and specify annual percentage 

reduction in energy consumption to be achieved in public housing by FY 2011. 

HUD Strategic Plan 25
HUD’s Strategic Goals

• The share of public housing units that meet HUD-established physical standards will increase 

from 85.1 percent to 87.5 percent by 2011. 

• Unoccupied units in public housing that are not HUD-approved vacancies decline by 5 percent by

2011. 

• Reduce the number of Exigent Health and Safety deficiencies per property by 10 percent annually

among PHAs that are designated as troubled by PHAS and have 5 or more deficiencies per 

property. 

• Revamp the Section 8 Management Assessment Program and create a more efficient and accurate 

assessment tool for the Housing Choice Voucher program by 2008. 

• The share of assisted and insured privately owned multifamily properties that meet HUDestablished physical standards will be maintained at no less than 95 percent, and substandard 

properties will continue to improve. 

• Reform the Section 202 and 811 programs to further improve the efficiency and outcomes for 

each program. 

o For Section 202 program, increase the admission of frail elderly and make facilities and 

service improvements so that residents can “age in place.” 

o For the Section 811 program, increase the housing inventory and accomplish more rapid 

development of these projects. 

• The percentage of HOPWA clients who maintain housing stability, avoid homelessness, and 

access care each year will be sustained at 80 percent for 2008 through 2011. 

• Increase the number of Neighborhood Networks Centers and maintain the existing 

Neighborhood Networks Centers in multifamily housing developments and public housing. 

• Between FY 2006 and FY 2011, the number of families counseled in homeownership readiness by 

PHAs through the ROSS program will increase by 830 to 4,148, and the number of counseled 

families who purchase homes will increase by 75 to 372. 

• Implement property-based funding, accounting and monitoring for public housing:

o By 2007, 20 percent of all PHAs will have acceptable asset-based accounting systems in 

place. 

o By 2008, 50 percent of all PHAs will have acceptable asset-based accounting systems in 

place. 

o By 2008, 10 percent of all PHAs will have substantially converted to asset-based 

management.

o By 2009, 90 percent of all PHAs will have acceptable asset-based accounting systems in 

place. 

o By 2009, 25 percent of all PHAs will have substantially converted to asset-based 

management.

o By 2010, 50 percent of all PHAs will have substantially converted to asset-based 

management.

o By 2011, all PHAs will have converted to asset-based management and accounting. 

26 HUD Strategic Plan
Promote Decent Affordable Housing

External Factors 

Many external factors affect the supply of 

affordable rental housing for low-income families 

and for the elderly and persons with disabilities. 

These include local rental markets, building codes, 

and land use regulations; state and local program 

decisions; and the actions of HUD’s many

partners. 

The continued growth in the number of elderly 

persons, fueled in part by the baby-boom 

generation, is projected to accelerate during the 

period covered by this plan. This demographic 

wave will continue to challenge those working to 

ensure access to diverse housing opportunities for 

the elderly population. 

As Hurricane Katrina forcefully demonstrated in 

2005, natural disasters remain capable of 

displacing many families, disrupting housing 

markets, and creating acute needs for decent 

affordable housing, especially for very low-income 

households. 

Finally, broad economic factors that affect

opportunities for low-income workers will directly 

affect HUD’s ability to help HUD-assisted renters 

as they make progress toward housing selfsufficiency. 

HUD Strategic Plan 27
HUD’s Strategic Goals

28 HUD Strategic Plan
Strategic Goal C: 

Strengthen Communities 

“HUD continues to improve the way we do business with those providing 

 housing and services to the people and places that need it most.” 

—Secretary Alphonso Jackson 

Overview

The federal community development programs 

administered by HUD target their benefits to lowand moderate-income people and have been 

successful in stabilizing and revitalizing 

communities across the nation. Through the 

programs of HUD’s Office of Community

Planning and Development (CPD), HUD 

supports the development efforts of states, local 

communities, and other HUD partners. 

A key component of this goal is the Community 

Development Block Grant program that has built 

and rehabilitated homes, fueled business 

development to create jobs, and improved the 

overall health of our nation’s communities. The 

Bush Administration proposes to reform the 

CDBG program to more effectively contribute to 

local community and economic progress. 

Formula changes will be proposed to direct more

of the program’s base funding to communities 

that cannot meet their own needs and bonus 

funds will be available to communities that 

demonstrate the greatest progress in expanding 

homeownership and opportunity for their

residents. 

Strategic Objectives Supporting Goal C 

Strengthen

Communities

Additionally, the HOME program helps 

strengthen communities by expanding the

availability of homeownership and affordable 

rental housing. CPD also administers HUD’s 

C1—Assist disaster recovery 

in the Gulf Coast region 

C2—Enhance sustainability

of communities by expanding 

economic opportunities C5—Address housing conditions 

that threaten health 

C3—Foster a suitable living 

environment in communities by

improving physical conditions and 

quality of life 

C4—End chronic homelessness 

and move homeless families

and individuals to permanent

housing 

HUD Strategic Plan 29
HUD’s Strategic Goals

homeless programs, which are an essential part of 

the Administration’s strategy for eliminating 

chronic homelessness. 

A new focus for this strategic goal is to strengthen 

the effectiveness of federal efforts to provide 

economic and community development 

opportunities to low-income households. HUD is 

working with grantees, interested parties, and 

other federal agencies to develop and implement 

performance measures and outcomes for these 

programs. 

Other HUD offices contribute to this goal 

through maintaining and promoting quality 

affordable housing in neighborhoods, reaching

out to communities through University 

Partnerships, making affordable capital available 

to construct and modernize hospitals, and

fostering international exchanges on housing, 

community development, and urban planning. 

This strategic goal has five objectives: 

Objective C1: Assist disaster recovery in 

the Gulf Coast region. 

During 2005, Hurricanes Katrina, Rita, and Wilma 

ravaged Louisiana, Mississippi, Alabama, Florida, 

and Texas and displaced hundreds of thousands 

of people. The people and infrastructure of the 

city of New Orleans were hit particularly hard. 

HUD is working with the Federal Emergency 

Management Agency to meet the emergency 

housing needs. The Department also has 

estimated that over 125,000 housing units were 

severely damaged or destroyed by Hurricanes 

Katrina, Rita, and Wilma, and another 179,000 

units received major damage. As Congress looked 

toward long-term reconstruction strategies, it 

provided $11.5 billion through the CDBG 

program in December 2005. The Department has 

requested that Congress provide additional

supplemental funding of $4.2 billion for 

community development and continued rental 

assistance for Louisiana. Under this objective, 

HUD will use supplemental appropriations to 

support the recovery of housing and critical 

infrastructure in the Gulf region so the citizens 

can rebuild their communities and lives. 

Objective C2: Enhance sustainability of 

communities by expanding economic 

opportunities. 

Communities cannot be viable places to live 

without economic resources. A key objective of

HUD’s community and economic development 

programs is to help improve economic conditions 

in distressed communities. Economic 

development is a key activity under the CDBG 

program. Funded activities include job creation 

and retention, as well as education, training, and 

services that strengthen the workforce. Grantees 

may also use CDBG funds to invest in 

infrastructure and housing improvements, which 

can spur further economic growth. HUD, in 

consultation with grantees and other interested 

parties, has developed a performance 

measurement framework for the formula grant 

programs (CDBG, HOME, HOPWA, and 

Emergency Shelter Grants) that will focus on 

three objectives, one of which is creating 

economic opportunities. Through this 

framework, HUD will be able to measure the 

extent to which the formula programs are 

supporting this strategic objective. 

HUD funds promote economic development 

even when that is not the primary purpose. 

Section 3 of the Housing and Urban Development 

Act of l968 requires that when HUD provides 

financial assistance to grantees in economically 

distressed areas, the resulting jobs, training, and 

contracts will be given to low- and very-lowincome persons in those areas to the greatest 

extent feasible. 

Objective C3: Foster a suitable living 

environment in communities by 

improving physical conditions 

and quality of life. 

Decent public services and amenities, safe, clean 

streets, adequate infrastructure, and homes free 

from environmental hazards are among the many 

factors that influence quality of life for members 

of a community. A range of HUD programs 

target funds to address such quality-of-life issues 

in low-income communities and households. 

For example, local communities often use CDBG 

funds for roads, sewers, and other infrastructure 

investments, or for community centers, parks, and 

other assets that help to strengthen and revitalize 

their low-income neighborhoods. HUD also 

funds housing development and rehabilitation 

through CDBG, HOME, Youthbuild, and Lead 

Hazard Control grants, and provides FHA

mortgage insurance to make private capital more 

available for homeownership, affordable rental 

housing, and healthcare facilities. 

30 HUD Strategic Plan
Strengthen Communities

Objective C4: End chronic homelessness 

and move homeless families and 

individuals to permanent housing.

HUD is committed through its Continuum of 

Care to ending chronic homelessness. HUD’s 

working definition of a person experiencing 

chronic homelessness is an unaccompanied 

individual with a disabling condition who has been

continuously homeless for a year or more or has 

had recurring episodes of homelessness. 

Estimates of the number of persons experiencing 

chronic homelessness range from 150,000 to 

200,000. Even when housing is available, 

disabilities sometimes make it difficult for 

chronically homeless persons to remain in that 

housing for long periods unless they also have 

supportive services, including case management

and regular healthcare. 

While those experiencing chronic homelessness 

are often the most visible of the homeless 

population, there is also a substantial number of

families and individuals who experience a more 

temporary crisis, such as loss of employment or 

eviction, and become homeless. HUD’s approach

to replacing homelessness with housing stability 

relies on three coordinated efforts: 

• Preventing homelessness; 

• Developing permanent and transitional 

housing for both those persons experiencing 

chronic homelessness and the growing 

numbers of homeless families; 

• Coordinating housing assistance with

supportive services. 

Given the variety of individual needs and locally 

available resources, communities are in the best

position to design strategies to help each homeless 

person and family achieve permanent housing and 

self-sufficiency. HUD’s homeless assistance 

programs will continue to foster local initiatives by 

providing flexibility while providing incentives to 

meet important national objectives, including 

ending chronic homelessness. 

HUD allocates the federal government’s largest 

amount of targeted homeless assistance under the 

McKinney-Vento Homeless Assistance Act 

through its annual Continuum of Care (CoC) 

competition and by formula through the 

Emergency Shelter Grants program. 

Communities also address homeless needs 

through the use of CDBG, HOME, and HOPWA 

programs and through the use of HUD’s other 

mainstream housing programs, such as Housing 

Choice Vouchers and the public housing program. 

Objective C5: Address housing 

conditions that threaten health. 

A safe housing stock is a critical precondition for 

safe, livable communities. Along with its 

responsibility for HUD-assisted private housing 

and public housing, HUD addresses hazards in 

unassisted private housing. The Department 

regulates the construction and inspection of 

manufactured housing. HUD also remains 

committed to reducing mold and other residential 

health and safety hazards through a 

comprehensive, cost-effective Healthy Homes 

approach, and to eliminating the poisoning of 

children by lead-based paint in older homes. The 

Department makes housing, especially for lowincome families, safe from these residential 

environmental hazards through grants; in the case 

of lead hazards, HUD also does so by regulating 

the sale or lease of older housing, and by

regulating assistance to older housing. HUD’s 

research improves methods for detecting,

assessing, and controlling these residential

environmental hazards. HUD supports research 

and development of housing construction that

resists natural disasters, such as hurricanes, floods, 

earthquakes, tornados, and firestorms. 

In addition, for persons with HIV and other 

chronic health challenges, the risks of 

homelessness pose a direct threat to their health, 

stability, and relative wellness. The Department’s 

homeless assistance programs and the HOPWA 

program are vital tools in reducing the health 

consequences for persons who are homeless or at 

severe risk of homelessness. 

Means and Strategies 

Support community and economic

development. 

HUD funds a variety of programs that support the 

community and economic development efforts of 

state and local communities. HUD’s strategy 

focuses on providing and coordinating resources 

for neighborhood revitalization and other 

community development efforts by local partners. 

By employing these resources for building local 

economies and developing community assets, 

communities can leverage local contributions to

address their priority problems: 

HUD Strategic Plan 31
HUD’s Strategic Goals

• The CDBG program is HUD’s most

important community development program 

and is one of the most flexible grant programs 

provided to localities by the federal 

government. A significant proportion of 

CDBG funds supports improving conditions 

in lower income and distressed communities. 

Under a new rule, HUD is ensuring that 

CDBG-funded economic development 

creates new economic activity and new jobs 

rather than relocating (or “pirating”) jobs 

from other areas. 

• Under the Community Renewal Tax Relief 

Act,5 HUD has designated 40 areas of 

pervasive poverty, unemployment, and 

general distress as Renewal Communities. 

Businesses in Renewal Communities are 

eligible for federal tax incentives, as well as tax 

relief and regulatory streamlining provided by 

state and local jurisdictions. HUD also has 

designated a third round of Empowerment 

Zones (EZs), which will receive all the tax

benefits of current EZs even though grants 

will not be available. 

• HUD’s Multifamily Housing insurance has led 

the way for insuring housing investments in 

neighborhoods where the private sector is not 

ready to risk capital. This initial development 

has spillover benefits and helps communities 

attract further investment. 

• HUD’s multifamily Neighborhood Networks 

centers will continue to strengthen 

communities by: (1) providing services for 

adults, youth, and seniors; adults receive job 

training and placement, education, and 

supportive services; youth improve their 

academic achievement; seniors become 

connected to their community and on-line

services and information, and often youth in

the community become involved with seniors 

through the center; (2) helping to reduce 

property crime and vandalism, thereby 

producing safer communities; (3) providing 

local employers with skilled workers; 

(4) supporting service providers; and 

(5) benefiting taxpayers, as residents of HUD 

housing become more economically selfsufficient and rely less on government 

subsidies. 

 

5 Incorporated by reference in the Consolidated 

Appropriations Act of 2001 (P.L. 106–554). 

• Under the Section 242 program, HUD helps 

hospitals access affordable financing for 

capital projects. Uses for HUD hospital loans 

include new construction, modernization, and 

refinancing. Since the program began in 

1968, 341 hospital mortgages have been 

insured for approximately $11.9 billion. 

Clients range from small rural hospitals to 

major urban medical centers. These hospitals 

serve as community anchors, providing not 

only needed healthcare services, but also jobs 

that range from entry level to professional. 

Many of the hospitals are in distressed 

communities and in areas designated as 

medically underserved. Often, they are the 

largest employers in their communities. 

Without access to capital through HUDinsured loans, some hospitals would not have 

been able to afford the repairs, renovations, 

and equipment to remain open. HUD has a 

long-standing relationship with HHS to 

administer this program, in which HHS 

provides architectural and engineering 

services, helps evaluate applications, and 

supports monitoring of the hospitals. 

• By establishing suitable goals for the 

government-sponsored enterprises, Fannie 

Mae and Freddie Mac, HUD ensures that 

more housing capital is available to promote 

homeownership and affordable rental housing 

in underserved areas. 

• Through the Good Neighbor Next Door

program, HUD sells selected FHA homes at a 

discount directly to law enforcement officers, 

firefighters, emergency medical technicians, 

and teachers, thereby revitalizing designated 

neighborhoods. This initiative expands on

the success and increases the efficiency of

more narrowly targeted programs. The 

Department also encourages the use of FHAinsured loans in distressed neighborhoods to 

improve housing conditions, raise 

homeownership rates, and stabilize 

neighborhoods. 

• HUD encourages grantees to certify Section 3 

residents and businesses and provide more 

permanent job opportunities in fields other 

than construction. This is done through 

monitoring and compliance reviews and 

technical assistance, encouraging grantees to 

enter into training agreements with 

universities and state- and locally funded 

training agencies. HUD will require that 

Section 3-related grievances are processed and 

32 HUD Strategic Plan
Strengthen Communities

settlements are generated as a result of 

noncompliance. 

• HUD also supports the redevelopment of 

distressed communities through the HOME, 

University Partnership programs, and the 

Indian Community Block Grant program. 

Provide resources and information to 

make housing safer. 

HUD provides financial resources for 

communities to address their own lead paint 

hazards through the Lead Hazard Reduction 

Grant programs. The CDBG program also 

provides resources to communities for a wide 

range of community development and housing 

activities, including for lead hazard control 

separately or as part of housing rehabilitation, 

counseling, and health services. 

Along with the Environmental Protection Agency, 

HUD regulates the disclosure of lead paint when

homes are rented or sold, and takes legal action 

against housing providers who neglect to inform

new occupants of hazards. 

Through HUD’s Lead-Based Paint Hazard 

Reduction and Healthy Homes programs, local 

organizations receive funds to eliminate the 

residential lead-based paint hazards that threaten

low-income children. In 2003, HUD and the 

Centers for Disease Control and Prevention began 

requiring funded programs to develop formal 

plans to eliminate lead poisoning in their 

jurisdictions. The plans address coordination of

governmental and private-sector efforts, datadriven screening for elevated blood lead among 

high risk populations, and elimination of lead 

paint hazards in housing, particularly in homes 

with more than one child with elevated blood 

lead. 

HUD’s Healthy Homes Initiative funds 

organizations to address housing-related health 

and safety hazards that impact the health of lowincome residents, particularly children. Because of 

the increased prevalence of asthma in children, 

HUD’s commitment to creating healthier homes 

includes the reduction of allergens and asthma 

triggers, such as mold, moisture, and pests. As 

part of this Initiative, HUD works to develop and 

standardize cost-effective methods for identifying 

and controlling hazards in the home. 

HUD is responsible for regulating manufactured 

housing, which provides homes for approximately 

10 percent of the nation’s households. From the 

establishment of HUD’s standards in 1976 

through the most recent survey in 1998, the rate 

of annual fire deaths in manufactured housing 

declined by 54 percent. Through the 

Manufactured Housing Improvement Act of 

2000, HUD’s responsibilities for manufactured 

housing will by the end of FY 2006 encompass 

the following areas: 

• Update and enforce standards for 

construction and safety of manufactured

homes. 

• Develop a national installation program for 

states that do not establish their own

programs. 

• Develop a national dispute resolution 

program for states that do not establish their 

own programs. 

HUD also is advancing the safety of the nation’s 

housing through innovative research. The

Healthy Homes program supports research, 

demonstrations, and public education on housing 

conditions related to preventable children’s 

diseases and injuries, such as asthma and carbon 

monoxide poisoning. 

Through the Partnership for Advancing 

Technology in Housing, cooperative research with 

federal and private partners is advancing 

knowledge of building technologies that are more

durable and safer in natural disasters, as well as 

more affordable and energy efficient. The 

program is accelerating transfer of these advanced 

technologies and techniques to builders. 

HUD’s objective of fostering a suitable living 

environment includes ensuring program 

compliance with the 1969 National 

Environmental Policy Act and related laws, such

as those for flood plains, wetlands, and historic 

preservation. 

CDBG Reform. 

The Administration proposes to reform the 

CDBG program to more effectively contribute to 

local community and economic progress. This 

effort comprises both legislative and 

administrative reforms. 

HUD continues to work with local stakeholders to 

identify performance measures that make the 

CPD programs more result-oriented and useful to 

communities in assessing their own progress 

toward addressing the problems of low-income

areas. 

HUD Strategic Plan 33
HUD’s Strategic Goals

After extensive consultation with grantees and 

other stakeholders, HUD published a final notice 

in 2006 that establishes a new performance 

framework for CPD formula programs. HUD is 

updating its data systems to facilitate reporting 

based on the new standardized performance 

measures. This framework improves HUD’s 

ability to capture program outcomes and will 

better inform budget and policy decisions. 

The CDBG Reform proposal includes changes to 

the funding formula to target resources to

communities that need them most, such as those 

with high poverty and unemployment rates. It 

also includes bonus funds for communities that 

demonstrate the greatest progress in expanding 

homeownership and opportunity for residents. 

CDBG and all other federal community and 

economic development programs will operate 

within a new, broader framework of clear goals, 

crosscutting community progress indicators, and 

common standards for the award of bonus 

funding. 

Assist communities in recovering from 

disasters. 

HUD played a crucial role in the federal 

government’s short-term response to the Gulf 

Coast hurricanes. For a summary of HUD’s 

broad array of disaster recovery efforts in the 

aftermath, see the Appendix. 

In December 2005, HUD received a supplemental 

appropriation of $11.5 billion for CDBG disaster 

relief grants to support hurricane recovery in the 

Gulf Coast. Through grants to affected areas, 

these funds will provide for a wide range of 

recovery activities, such as rebuilding 

infrastructure and housing, delivery of essential 

public services, and economic development. 

The Gulf disaster is unique because of its scale. 

HUD hurricane recovery programs funded in 

FY 2006 complement the provisions of the Gulf 

Opportunity (GO) Zone Act of 2005, which 

President Bush signed into law on December 21, 

2005. The law promotes reinvestment by 

businesses affected by Hurricane Katrina. As 

businesses rebuild or purchase new equipment, 

the GO Zone Act and related legislation will help 

in important ways: 

• Increase expensing allowances for capital

investment by small businesses, and for 

demolition and cleanup expenses for all 

businesses. 

• Accelerate “bonus” depreciation for property 

and equipment, and allow uninsured losses to 

be carried back five years as a tax deduction. 

• Make people affected by Hurricane Katrina 

eligible for the Work Opportunity Tax Credit. 

• Exclude the value of employer-provided 

housing up to $600 per month from each 

employee’s taxable income, and give 

employers a tax credit for providing such 

housing. 

End chronic homelessness and move 

homeless families and individuals to 

permanent housing. 

The primary focus of HUD’s efforts to end 

chronic homelessness and address the needs of 

other homeless households is to provide both

flexible and targeted resources to communities, as 

well as to encourage planning and coordination to 

maximize the impact of these resources. 

• HUD annually allocates over $1.1 billion in 

McKinney-Vento Act funds through 450 local 

Continuum of Care (CoC) planning 

jurisdictions. A Continuum of Care is a 

broadly representative public-private planning 

process that assesses local needs, determines 

local priorities for funding within national 

goals, and assesses local performance in 

ending chronic homelessness and moving

homeless families and individuals to 

permanent housing. In order to target funds 

to serve the chronic homeless, HUD has 

developed a “Samaritan Initiative” that 

provides bonus funding for CoCs submitting 

a permanent housing project dedicated to

serving chronically homeless persons. In the 

2005 national competition, HUD funded 

4,940 projects totaling $1.1 billion in 452 

CoCs. Of these, 611 were new projects. 

There were 233 “Samaritan bonus” projects 

that received a total of over $100 million in

funding. 

• HUD will continue to seek tighter 

coordination and integration of its 10-year

planning efforts to end chronic homelessness 

through standardizing homeless and chronic 

homeless planning components contained in 

its two resource-driven local planning 

structures: (1) the Consolidated Plan with 

homeless and chronic homeless elements that 

are submitted by states and 1,128 jurisdictions 

that receive over $5.8 billion in CDBG, 

HOME, HOPWA, and ESG program 

34 HUD Strategic Plan
Strengthen Communities

funding; and (2) the annual plan for 

addressing homelessness and ending chronic 

homelessness submitted by over 452 CoC 

planning jurisdictions. HUD is actively 

seeking to coordinate these jurisdictional CoC 

and Consolidated Plans with other 10-year

plans. 

• HUD will continue to work directly with 

other federal agencies, and through the U.S. 

Interagency Council on Homelessness, on

collaborative efforts to address homeless 

needs and to end chronic homelessness. One 

tangible result of this effort is the $35 million 

Chronic Homeless Initiative between HUD 

and the Departments of HHS and Veterans

Affairs that weaves together housing and 

social services for homeless people with 

addictions, mental illness, prisons histories, 

and other root causes of persistent

homelessness. Another is the jointly funded 

initiative between HUD and Department of 

Labor for $13 million focusing on the housing 

and employment needs of chronically 

homeless persons. 

• HUD also recently funded a new initiative, 

“Housing for Persons Who Are Homeless

and Addicted to Alcohol,” to assist 

chronically homeless individuals who have a 

long-term addiction to alcohol. The initiative 

funds 12 pilot programs in 11 cities that serve 

approximately 555 persons. These programs 

received two-year grants totaling $10 million 

in funding, and were developed in 

collaboration with the U.S Interagency 

Council on Homelessness. 

• As homeless families and individuals obtain 

better access to the mainstream services they 

need, and as the coordination between HUD 

and other federal agencies coalesces, HUD is 

working to reduce the proportion of HUD 

homeless funds used for the provision of

social services and to increase the proportion 

used for housing. 

• A key tool for ending chronic homelessness 

will be to provide permanent supportive 

housing – housing combined with services. 

The Department will continue to ensure that 

at least 30 percent of all available homeless 

funding is awarded for permanent housing. 

Providing permanent supportive housing will 

significantly reduce the cost of medical, 

mental health, and criminal justice resources 

that are used for persons experiencing chronic 

homelessness. In fact, recent research has 

demonstrated that providing permanent 

supportive housing costs about the same as 

leaving an individual on the streets and having 

him or her cycle through the various 

disconnected healthcare, correctional, mental 

health, and substance abuse treatment 

institutions. 

• HUD will scrutinize the policies of its 

mainstream housing programs to determine 

whether additional mainstream housing 

resources can be brought to bear on the 

problem of homelessness, including both 

persons experiencing chronic homelessness

and homelessness among families. 

• HUD is also collaborating with other federal 

agencies in efforts to better connect HUD

program recipients with resources made 

available to address health, human services, 

job development, education, and other 

services that are needed by persons with 

special needs. The results of these efforts

should help ensure that HUD recipients 

achieve their housing mission with improved 

access to the related social services provided 

by other federal programs. 

Finally, HUD will continue to: 

• Assist communities in developing 

congressionally mandated Homeless 

Management Information Systems (HMISs) 

to track homeless persons moving through 

emergency shelter, transitional housing, and 

into permanent housing. HMISs will identify 

the characteristics of homeless persons and 

track milestones, including access to benefits, 

educational opportunities, and employment. 

In doing so, HUD will take steps to ensure 

adequate legal protections for privacy and

confidentiality of homeless clienteles, 

particularly victims of domestic violence. 

• Encourage states and communities to 

improve discharge planning from their 

healthcare, foster care, youth facilities and

criminal justice programs, so that, upon 

discharge, people move to stable permanent 

housing rather than becoming homeless. 

• Provide extensive technical assistance to 

applicants and potential applicants for the 

Department’s homeless assistance programs. 

In addition to a continuation of the local, 

regional, and national technical assistance 

resources already in place, HUD will 

inaugurate targeted technical assistance 

specifically tailored to faith-based 

HUD Strategic Plan 35
HUD’s Strategic Goals

organizations. Existing targeted technical 

assistance efforts under way to veteran service 

organizations will also be expanded. 

• Research methods to measure and optimize 

the cost of achieving housing stability for 

various populations. 

International exchanges on housing and 

urban issues. 

In coordination with the White House and the 

State Department, HUD’s Office of International 

Affairs supports the diverse international interests 

of the Department, implements cooperative 

exchange programs with other governments and 

international organizations, and promotes

multinational research collaboration. These 

activities include arranging HUD briefings for 

visiting foreign government officials on American 

research and experience on housing and urban 

regions and organizing U.S. involvement in 

international conferences. 

HUD’s international activities are carried out from

within the Office of Policy Development and 

Research and generally focus on topics in housing 

finance, building technology and regulatory

reform, urban economic development, postdisaster reconstruction strategies, and urban

planning, particularly GIS applications. The 

Department’s authority for this work is found in 

the Housing Act of 1957 which gives broad 

latitude to the Secretary of Housing and Urban 

Development to “...exchange data relating to 

housing and urban planning and development 

with other nations and assemble such data from 

other nations, through participation in 

international conferences and other means, where 

such exchange or assembly is deemed by him to 

be beneficial....” 

As international exchanges serve to expand the 

knowledge base available to all concerned with 

these complex socio-economic issues, they 

support the development of new policies designed 

to strengthen communities both here and abroad. 

The Department will continue its bilateral and 

multilateral cooperative programs with other 

governments based on common policy research

interests. 

36 HUD Strategic Plan
Strengthen Communities

Performance Measures for Strategic Goal C 

HUD employs an integrated performance management approach that uses long-term goals in parallel 

with tracking indicators and annual performance goals that are published in the Annual Performance Plan 

and reported in the annual Performance and Accountability Report. 

Annual goals are supported by HUD’s internal Management Plan, which establishes program and 

operational management goals that are specific to program offices, as well as field offices. HUD will 

assess its long-term success in achieving this strategic goal by measuring the outcomes discussed below. 

Performance Measures 

• HUD will assist Louisiana, Mississippi, Alabama, Texas, and Florida in planning and implementing 

programs to aid in community and economic recovery of the areas destroyed by the hurricanes. 

HUD will expeditiously review and approve disaster recovery plans submitted by these states. 

(Metrics will be developed over FY 2007 to measure progress in recovery.) 

• By 2011, median home loan values as reported by Home Mortgage Disclosure Act (HMDA) data 

will increase in 60 percent of the CDBG Neighborhood Revitalization Strategy Areas that have 

concentrated community development investments. (Baseline studies, if available, will guide 

further refinement of this measure.) 

• Eliminate the blighting influence of 25,000 vacant, boarded up, or abandoned properties by 2011. 

• By 2011, 322,486 (2006-2011) jobs will be created or retained through CDBG. 

• Increase economic opportunity through use of CDBG funds in communities that are above the 

national unemployment rates. 

• The share of CDBG entitlement funds that benefit low- and moderate-income persons remains at

or exceeds 92 percent. 

• The share of state CDBG funds that benefit low- and moderate-income persons remains at or 

exceeds 96 percent. 

• Support the availability of decent, affordable rental housing by endorsing at least 33 percent of 

FHA-insured multifamily mortgages in underserved areas annually through 2011. 

• Increase and maintain the number of Neighborhood Networks Centers in FHA-insured and 

assisted multifamily housing properties. 

• The percentage of formerly homeless persons who remain housed in HUD permanent housing

projects for more than 6 months will be 75 percent by 2011. 

• By 2011, HUD will create 40,000 new units of permanent housing for chronically homeless 

individuals. 

• By 2011, 65 percent of households leaving transitional housing will directly move to permanent 

housing. 

• By 2011, 25 percent of homeless persons will be employed upon exiting HUD homeless assistance 

projects. 

• HUD will work with other federal partners to eliminate lead poisoning in children nationwide by 

2010. 

• By 2011, the Healthy Homes Initiative will reduce allergen levels in 5,000 homes and consequently 

decrease asthmatic episodes in at least 3,000 children. 

HUD Strategic Plan 37
HUD’s Strategic Goals

External Factors 

Community and economic development 

The success of distressed communities in 

improving their economic conditions depends 

heavily on broad macro-economic trends in their 

region and the nation. Regional economic

adjustments may result in periods of higher 

unemployment rates, reduced revenues, and lower 

spending on public services by states and 

localities. A rapidly changing global economy has 

made it challenging for Americans to compete 

when capital is highly mobile, markets for goods 

and services are widely dispersed, and wages for 

low-skilled employment are much lower in many 

locations abroad. 

Local shortages of low-skilled jobs may be 

compounded by mismatches between the 

locations of available jobs and the residences of 

the unemployed. Many older urban communities 

have adopted aggressive strategies to alleviate 

these mismatches, but they face numerous

barriers, including tax rates, scarcity of land, 

scattered and/or absentee ownership, large 

concentrations of poor residents, blighted/vacant 

properties, and schools with fewer resources. 

Rural communities often face additional 

challenges because of the changing structure of 

the farming industry, underinvestment, weak 

infrastructure, limited services, and few 

community institutions. 

CDBG, HUD’s primary source of community and 

economic development funding, helps ensure that 

greater resources continue to flow toward poorer, 

slow-growing, distressed areas. While HUD can 

encourage certain uses of funds, and while funds 

are targeted to low- and moderate-income 

residents as the primary beneficiaries, each 

jurisdiction makes its own decision about how to 

use CDBG funds. 

Although deteriorated lead-based paint in older 

housing remains the most common source of lead 

exposure for children, the Centers for Disease 

Control report that other lead sources increasingly

are recognized, particularly among certain racial or 

ethnic populations. 

Homelessness 

Success in helping the homeless achieve housing 

stability is affected by a variety of factors beyond 

HUD’s control. The incidence of homelessness is 

driven by macroeconomic forces, such as 

unemployment levels, the supply of low-skilled 

jobs, and the availability of low-cost housing. 

Personal factors, such as domestic violence, 

mental illness, substance abuse, disabilities, 

HIV/AIDS, other chronic health issues, and the 

extent of a person’s educational or job skills, also 

contribute to homelessness. Discrimination 

against persons with disabilities can also lead to 

homelessness. The Department’s success in 

achieving this objective also depends critically on 

the efforts of a wide variety of community

partners. 

38 HUD Strategic Plan
Strategic Goal D: 

Ensure Equal Opportunity In Housing 

“The very fabric of our nation is the rich diversity of our people. At HUD we are 

more committed than ever to ensuring that everyone has the opportunity 

to live where they choose, free from discrimination.” 

—Secretary Alphonso Jackson 

Strategic Objectives Supporting Goal D 

Ensure Equal Opportunity

in Housing

D1—Ensure access to 

a fair and effective administrative 

process to investigate and resolve 

complaints of discrimination D2—Improve public awareness

of rights and responsibilities under 

fair housing laws 

D4—Ensure that HUDfunded entities comply with 

fair housing and other civil 

rights laws D3—Improve housing 

accessibility for persons with 

disabilities 

Overview

Battling housing discrimination remains a core 

element of HUD’s mission. In order for all 

Americans to have an equal opportunity to buy or 

rent housing that matches their individual needs, 

discrimination against minorities and persons with

disabilities must be eliminated in all our 

communities. Architectural barriers, refusals to 

rent or sell, denials of financing, and steering 

buyers away from certain neighborhoods are some

of the forms discrimination now takes. These 

discriminatory actions exclude people from the 

diverse housing opportunities that should be 

available to them. 

HUD is committed to ending the practice of 

discrimination. To do this, HUD enforces fair 

housing laws and educates lenders, housing 

providers, developers, architects, homeseekers, 

landlords, and tenants about rights and obligations 

in complying with the laws. Working with state 

and local partners – as well as the private sector – 

the Department is involved in a cooperative effort 

to increase access to the nation’s housing stock so

HUD Strategic Plan 39
HUD’s Strategic Goals

that more Americans can obtain housing of their 

choice. 

Since 2000, HUD has conducted several key 

studies to determine the frequency of 

discrimination in the housing market and the 

public’s level of fair housing awareness. 

HUD’s multi-year Housing Discrimination Study 

2000 (HDS 2000) found that while housing 

discrimination has decreased overall during the 

preceding decade – notably, by 12 percentage 

points for African American homebuyers – it 

continues to affect the lives of millions of 

Americans. All major minority groups – including 

African Americans, Hispanics, Native Americans, 

Asians and Pacific Islanders – were found to 

experience high levels of consistent adverse 

treatment in at least 21 percent of rental settings. 

In July 2005, HUD released its first study of 

housing discrimination against persons with 

disabilities. The study, “Discrimination Against 

Persons with Disabilities: Barriers at Every Step,” 

examined the Chicago-area rental market and 

found that hearing-impaired people experienced 

consistent adverse treatment 50 percent of the 

time when using a telephone-operator relay to

search for rental housing. Persons in wheelchairs 

experienced consistent adverse treatment 

32 percent of the time when they visited rental 

properties. 

HUD’s 2002 Housing Awareness Study “How 

Much Do We Know?” indicated that fair housing 

education and enforcement had greatly increased 

awareness, but also found that many Americans 

still do not recognize unlawful discrimination 

when it occurs. For example, 46 percent of 

people surveyed did not know that it is illegal for 

real estate agents to limit a home search to certain 

neighborhoods based on the race of the home 

seeker and the racial composition of the 

neighborhood. When asked about differential 

treatment of families with children, an alarming 

62 percent of those surveyed were not aware that

such different treatment was illegal. 

In 2001, HUD studied pre-application lending 

discrimination in two major metropolitan areas. 

“All Other Things Being Equal” found that while 

minorities and whites receive equal treatment in

the majority of cases, there were patterns of 

unequal treatment that systematically favor whites. 

For example, African Americans received less 

information about the loans and less follow-up 

than white homebuyers with similar economic 

histories. In one city, Hispanic borrowers were 

quoted a loan amount that was on average $10,000 

less than the amount quoted to whites with

identical economic profiles. These differences in

treatment, even at the pre-application stage, 

influence a family’s decision about what home to 

choose and the amount of the loan and type of 

loan they can afford. 

These studies provide HUD with important 

information to fulfill its mission and ensure equal 

opportunity in housing. 

Objective D1: Ensure access to a fair 

and effective administrative process to 

investigate and resolve complaints of 

discrimination. 

HUD is responsible for enforcement of the Fair 

Housing Act and for ensuring that HUD 

programs promote fair housing and comply with 

civil rights laws. The Fair Housing Act makes it 

unlawful to discriminate in housing against 

persons based on race, color, religion, sex, 

national origin, disability, or familial status. The 

Department investigates all complaints filed by 

individuals who believe they have experienced 

discrimination in housing. Resolving these 

complaints on a timely basis reflects HUD’s 

commitment to continuing and improving this 

important aspect of its work. 

In recent years, HUD has made significant strides 

in reducing its inventory of “aged cases” and is 

now focused on increasing the number of cases 

processed within 100 days, the statutory threshold 

for timeliness. 

Objective D2: Improve public awareness 

of rights and responsibilities under fair 

housing laws. 

HUD views enforcement of fair housing laws as 

going hand-in-hand with increasing public 

awareness of those laws and the avenues for 

reporting violations. Many people remain

unaware of protections provided by the law, and 

according to “How Much Do We Know?” only 

5 percent of the people who believe they 

experienced housing discrimination contact a 

government agency, a fair housing organization, 

or a lawyer. To address these findings, HUD 

launched an award-winning multi-media campaign 

in 2003 to expand awareness of fair housing laws 

and methods for filing complaints. These efforts 

contributed greatly to a 14 percent increase in the 

number of discrimination complaints reported to 

40 HUD Strategic Plan
Ensure Equal Opportunity in Housing 

HUD and substantially equivalent fair housing 

agencies between 2003 and 2005. 

HUD will continue to work in cooperative effort 

with tenants, builders, landlords, and other 

stakeholders to improve understanding and 

compliance with Fair Housing laws. 

Objective D3: Improve housing 

accessibility for persons with disabilities. 

This strategic objective reflects a concerted effort 

by HUD to reduce barriers that limit the housing 

options for persons with disabilities and create 

more accessible units. In addition to the Fair 

Housing Act, HUD enforces Section 504 of the 

Rehabilitation Act of 1973, which prohibits 

discrimination in federally assisted programs or 

activities; Title II of the Americans with

Disabilities Act of 1990; and the Architectural 

Barriers Act of 1968. 

HUD’s 2005 study “Discrimination Against 

Persons with Disabilities: Barriers at Every Step” 

revealed high levels of discrimination against 

persons with disabilities. The study found that at 

least one-third of the advertised rental properties 

in the Chicago area were not accessible to

wheelchair users. In other words, a person who 

uses a wheelchair is limited to about two-thirds of 

the Chicago-area rental market from the outset. 

As a result of enforcement done in tandem with 

ongoing educational efforts to acquaint the public 

and building community with rules regarding 

accessibility, HUD anticipates a continued 

increase in the number of accessible units. HUD 

also will provide more homeownership 

opportunities to persons with disabilities through 

enforcement of the Fair Housing Act and Section 

504 of the Rehabilitation Act of 1973. 

Objective D4: Ensure that HUD-funded 

entities comply with fair housing and 

other civil rights laws. 

Title VI of the Fair Housing Act requires federal 

agencies to ensure that their programs provide 

equal opportunity in housing. This new strategic 

objective focuses on the cross-cutting nature of 

fair housing issues and invigorates the 

Department’s compliance enforcement activities, 

including accessibility of housing for persons with 

disabilities under Section 504. 

Means and Strategies 

HUD and its Office of Fair Housing and Equal 

Opportunity (FHEO) will promote fair housing 

through a number of continuing and expanded 

programs, activities, and strategies. 

Provide for efficient and effective 

enforcement of fair housing laws. 

FHEO will investigate and resolve (as 

appropriate) housing discrimination complaints 

under the Fair Housing Act, Title VI of the Civil 

Rights Act of 1964, Section 504 of the 

Rehabilitation Act of 1973, the Americans with 

Disabilities Act, and Section 109 of Title I of the 

Housing and Community Development Act of

1974. 

FHEO also administers two primary grant 

programs that help to reduce the incidence of 

housing discrimination – the Fair Housing 

Assistance Program (FHAP) and the Fair Housing 

Initiatives Program (FHIP). 

• FHAP provides grants to state and local 

agencies to enforce laws that are substantially 

equivalent to the federal Fair Housing Act. 

• FHIP provides funds to public and private

fair housing organizations to educate the 

public and housing industry about fair 

housing laws and investigate allegations of

discrimination. 

FHEO will encourage, support, and expand the 

network of state and local agencies that work as 

HUD’s partners through these programs. FHEO 

seeks to build this capacity in unserved and 

underserved areas, such as those not already 

served by substantially equivalent agencies. 

FHEO is taking steps to improve the efficiency 

and quality of case processing and investigation. 

• HUD provides advanced training for HUD 

and grantee staff in theory and techniques of 

fair housing investigation. The National Fair 

Housing Training Academy, launched in 2004, 

was established to ensure quality 

investigations and consistent case processing. 

In the coming years, the Academy will 

continue to offer quality-standardized 

instruction, expanding the skill and capacity of 

fair housing organizations. 

• Through a partnership with the Offices of

General Counsel (OGC) and Policy 

Development and Research, FHEO is pilottesting a new case processing protocol 

involving early and continued investigation 

HUD Strategic Plan 41
HUD’s Strategic Goals

coordination between FHEO and OGC. 

Evidence from other fair housing agencies 

suggests the new protocol may result in more 

effective and efficient management, leading to 

shorter processing times and higher quality

investigations. The study involves three of 

HUD’s ten regions, and over the course of 

one year will affect approximately 1,600 fair 

housing complaints. 

• HUD will continue its partnership with the 

Department of Justice to aggressively handle 

criminal acts of housing discrimination and 

cases that involve either a pattern and practice

of discrimination or discriminatory zoning

and land use activities. 

• HUD has established an Office of Systemic 

Investigations to address complex, systemic, 

and secretary-initiated complaints more 

effectively. 

HUD also will monitor the governmentsponsored enterprises’ compliance with fair 

housing requirements, as well as with the Federal 

Housing Enterprises Financial Safety and 

Soundness Act (FHEFSSA).

Raise awareness o fair housing laws

among housing industry professionals and 

the general public. 

f

By sponsoring public outreach events and 

multimedia campaigns, HUD educates the public, 

homeowners, renters, housing industry 

professionals, lenders, and HUD grantees about 

the Fair Housing Act’s prohibitions against 

discrimination and the assistance available to them

if they experience discrimination. 

Improve the accessibility of housing to 

persons with disabilities. 

The Department supports building industry 

compliance with fair housing laws by continuing 

the Fair Housing Accessibility FIRST program, 

which provides training and technical assistance 

for industry professionals on meeting accessibility 

requirement. 

HUD will provide more homeownership 

opportunities to persons with disabilities through 

enforcement of the Fair Housing Act and Section 

504 of the Rehabilitation Act of 1973. 

HUD administers housing programs for the 

disabled, including the Section 811 rental housing 

program, Housing Opportunities for Persons with 

AIDS, Mainstream Housing Opportunities for 

Persons with Disabilities, and other rental 

assistance for persons with disabilities. 

Ensure that HUD-funded entities comply 

with fair housing and other civil rights 

laws. 

The Department regularly monitors a variety of 

housing programs. HUD provides training and 

technical assistance to funded entities, conducts 

front-end reviews of documents (such as 

affirmative fair housing marketing plans), enforces 

civil rights related program requirements (such as 

site and neighborhood standards), and reviews 

applications to the SuperNOFA programs to 

ensure that the applicants meet affirmative fair 

housing, nondiscrimination, and Section 504 

requirements in their programs and activities. 

Further, HUD’s Office of Fair Housing and Equal 

Opportunity designed a checklist to assist other 

program offices in determining an agency’s 

compliance with applicable laws. HUD program 

offices work together to determine the 

appropriate corrective measures to take when an 

entity does not comply with its civil rights

requirements. FHEO will utilize the information 

collected to provide outreach to entities to ensure 

full compliance with fair housing laws. 

42 HUD Strategic Plan
Ensure Equal Opportunity in Housing 

Performance Measures for Strategic Goal D 

HUD employs an integrated performance management approach that uses long-term goals in parallel 

with tracking indicators and annual performance goals that are published in the Annual Performance Plan 

and reported in the annual Performance and Accountability Report. 

Annual goals are supported by HUD’s internal Management Plan, which establishes program and 

operational management goals that are specific to program offices, as well as field offices. HUD will 

assess its long-term success in achieving this strategic goal by measuring the outcomes discussed below. 

Performance Measures 

• By the end of FY 2011, at least 85 percent of open HUD fair housing complaints will be 

completed within 100 days, excluding recommended cause, pattern and practice, and systemic 

complaints, increasing by 5 percentage points annually from the FY 2006 baseline of 60 percent. 

• By the end of FY 2011, at least 65 percent of open FHAP fair housing complaints will be 

completed within 100 days, excluding recommended cause, pattern and practice, and systemic 

complaints, increasing by 2 percentage points in FY 2006, and thereafter by 3 percentage points 

annually, from the FY 2005 baseline of 48 percent. 

• To improve the quality and rigor of investigations, increase the proportion of complaints that use 

testing as evidence by 6 percentage points from the FY 2006 baseline by FY 2011. 

• Decrease the percentage of minorities that were found to experience consistent adverse treatment 

in the rental market by 2 percentage points by 2011. (This performance measure is contingent 

upon the availability of funds to measure results by conducting a Housing Discrimination Study.) 

• By 2011, HUD will increase public awareness of the Fair Housing Act’s prohibitions of 

discrimination against families with children by 6 percentage points from the baseline of 

44 percent in 2005. 

• By 2011, HUD will increase public awareness of the Fair Housing Act’s prohibitions against racial

steering by 4 percentage points from the baseline of 58 percent in 2005. 

• Ensure that civil rights limited monitoring reviews are conducted during on-site monitoring 

reviews of HUD-funded recipients by responsible HUD program offices, with referral to FHEO

for review and appropriate action. 

• Through development of a national strategy, FHEO will conduct 280 compliance and monitoring 

reviews by 2011. 

• HUD will take corrective action on all findings resulting from civil rights limited monitoring 

reviews. 

• HUD-assisted units made accessible as a result of Voluntary Compliance Agreements will be 

verified by FHEO and a database of those accessible units will be maintained beginning 2007 

through 2011. 

External Factors 

Social, cultural, and economic conditions 

influence the acceptance of minorities and persons 

with disabilities. Local policies and practices 

affecting the development and construction of

housing will continue to have some influence on 

the levels of discrimination, income isolation, and 

disparate homeownership rates. 

HUD Strategic Plan 43
HUD’s Strategic Goals

44 HUD Strategic Plan
Strategic Goal E: 

Embrace High Standards of Ethics, 

Management, and Accountability 

“I’ve never measured an agency’s success by the number of programs it runs. 

Instead, I measure success by the number of people we serve, and the number 

of families that are living better, more fulfilling lives today because they were 

helped by the people of HUD at a critical time in their lives.” 

—Secretary Alphonso Jackson 

Strategic Objectives Supporting Goal E 

Embrace High Standards of

Ethics, Management,

and Accountability

E1—Strategically manage 

HUD’s human capital to increase 

employee satisfaction and 

improve HUD performance 

E2—Improve HUD’s

management and internal

controls to ensure program 

compliance and resolve 

audit issues

E4—Capitalize on 

modernized technology to

improve the delivery of 

HUD’s core business 

functions E3—Improve accountability, 

service delivery and customer

service of HUD and 

its partners

Overview

To achieve the Department’s other strategic goals 

effectively, it is essential that HUD employees and 

HUD’s partners embrace high standards of ethics, 

management, and accountability. Because HUD 

manages public programs using public resources, 

HUD is accountable for ensuring that government

funds are handled properly and achieve the 

purposes for which they were provided. The 

Secretary has made stronger ethics, effective 

management, and accountability a top priority 

throughout the Department’s operations. This 

goal guides the planning, investment, and 

management of human and other resources to 

achieve performance improvements in financial 

management, information technology, and

program operations. 

The President’s Management Agenda (PMA) is 

designed to improve the efficiency and 

HUD Strategic Plan 45
HUD’s Strategic Goals

effectiveness of the federal government and to 

address significant management deficiencies at 

individual agencies. Building on the PMA and 

feedback from the Government Accountability 

Office (GAO), HUD has made significant 

progress in its financial systems and rental 

assistance program management. In the years to 

come, the Department will sustain its 

commitment to these areas while improving 

performance and maintaining the highest

standards of ethics, management, and 

accountability. 

The PMA provides the framework for this

strategic goal’s means and strategies, as it 

addresses HUD’s management challenges and 

high-risk programs through five initiatives to 

improve government-wide performance. The five 

areas of focus are human capital, expanded

electronic government, improved financial

management, competitive sourcing, and budget 

and performance integration. The PMA also 

includes two HUD-specific initiatives to correct 

long-standing management control weaknesses 

and improper payment issues. Under an eighth

initiative, HUD will improve program delivery by 

enabling increased participation by faith-based and 

community organizations. 

Four objectives under Goal E articulate the 

Department’s long-term efforts to address 

management challenges and to become an

increasingly high-performing agency. 

Objective E1: Strategically manage 

HUD’s human capital to increase 

employee satisfaction and improve HUD 

performance. 

This strategic objective stresses the importance 

HUD places on its most valuable resources, its 

employees, recognizing that it is only through 

their efforts that HUD’s mission will be carried 

out. HUD’s goals are to recruit, develop, and 

retain a workforce of employees renowned for 

professional leadership, management, and 

technical competency, while ensuring that they

have opportunity to gain the widest possible 

ranges of skills and experiences. 

The eligibility of over half of HUD’s workforce 

for retirement over the next several years poses a 

significant challenge for HUD’s operations. As 

GAO has recognized, this retirement issue is a 

government-wide problem. HUD, however, 

views it as an opportunity to attract and develop a 

new cadre of employees to take on the future 

challenges of housing and community 

development. In the future, all employees of 

HUD will have the knowledge and skills to 

manage information effectively. The continued 

implementation of HUD’s Strategic Human 

Capital Management plan remains critical to the 

Department’s success in managing this invaluable

resource and continuing to strengthen internal

communications. 

Objective E2: Improve HUD’s 

management and internal controls to 

ensure program compliance and resolve 

audit issues. 

HUD will remain focused on the continuous 

improvement of the organization and functions, 

and respond as effectively to the needs of its 

partners as the private sector responds to its 

customers. As a large organization with multiple 

responsibilities, HUD must maintain strong 

internal controls to ensure that HUD effectively 

meets its responsibilities, including the elimination 

of fraud, waste, and abuse of federal resources. 

As discussed in more detail below, HUD’s most 

significant management challenges are the 

following: 

• Improve financial management systems; 

• Ensure adequate and sufficiently trained 

HUD staff; 

• Improve origination of FHA single-family 

mortgage insurance and oversight of real 

estate owned property; 

• Improve the effectiveness and efficiency of 

public and assisted housing program 

administration; 

• Ensure grantee compliance with relevant 

regulations and statues. 

Objective E3: Improve accountability, 

service delivery, and customer service of 

HUD and its partners. 

HUD’s extensive use of the partnership model is a 

fundamental aspect of the Department’s 

operations. This objective highlights the HUD 

and PMA goal of improving the performance of 

HUD partners or intermediaries. HUD’s partners 

include state and local governments, nonprofit 

organizations, for-profit organizations, and even 

other federal agencies. HUD has a legal and 

financial relationship with 4,500 PHAs and 

numerous private housing providers. 

46 HUD Strategic Plan
Embrace High Standards of Ethics, Management, and Accountability 

Approximately 4,000 localities and service 

providers administer HUD’s community 

development programs. Private partners also 

participate in housing finance programs that 

insure mortgages and guarantee mortgage-backed 

securities totaling over a half trillion dollars. 

Objective E4: Capitalize on modernized 

technology to improve the delivery of 

HUD’s core business functions. 

As technology continues to reshape our world, the 

Department must transform business using 

information technology innovations and solutions 

that meet and exceed the rising expectations of 

our business partners and the citizens we serve. 

HUD is already recognized as a technology leader, 

delivering secure, reliable, and well-managed 

information technology (IT) solutions that

increase the accessibility and availability of 

services, funding opportunities, and programrelated information to our business partners and 

the general public. 

Using HUD’s new Enterprise Architecture and its 

IT Strategic Plan as a foundation for decisionmaking, the Department will modernize HUD’s 

business processes and IT through its five-year 

Vision 2010 initiative. Vision 2010 will focus on 

core business and enterprise IT investments to 

optimize HUD business practices and improve 

internal efficiency and decisionmaking. The key 

approach is to provide integrated web-based 

solutions to enhance HUD’s ability to meet 

Departmental goals and “just in time” customer 

demand for HUD’s programs. 

Means and Strategies 

Use human capital effectively. 

According to the PMA, “human capital strategies 

are linked to organizational mission, core values, 

goals and objectives and result in building,

sustaining, and effectively deploying the skilled, 

knowledgeable, diverse, and high performing 

workforce needed to meet the current and 

emerging needs of government and its citizens.” 

Human resources are the indispensable key to 

management accountability. Thus, HUD’s three 

strategic priorities for human capital are: (1) a 

mission-focused agency, (2) a high-quality 

workforce, and (3) an effective succession plan. 

Effective succession planning will ensure that the 

Department’s employees have the skills and 

knowledge they need to achieve HUD’s mission 

and that institutional knowledge is sustained. As a 

result, customer service will not suffer due to 

retirements, and clear lines of succession will help 

the Department retain high-performing mid- and 

entry-level employees. 

The following means and strategies will be applied 

to effectively utilize human capital: 

• The Human Capital Steering Committee, 

which is chaired by the Assistant Secretary for 

Administration and comprises executives 

from the major program areas, will continue 

to monitor implementation of the Strategic 

Human Capital Management Plan and provide 

leadership and guidance on associated issues. 

• The Department completed a comprehensive 

workforce analysis that resulted in workforce 

plans for each of its core business program 

offices that include 65 percent of the agency’s 

workforce. These workforce plans address 

mission-critical skill gaps. HUD will continue 

to implement these workforce plans. 

• HUD implemented a departmental resource 

management process, called Resource

Estimation and Allocation Process (REAP), 

which allows HUD to allocate resources 

efficiently to improve performance and 

coordinate policy, performance, and staffingrelated budget resources. The Total 

Estimation and Allocation Mechanism 

(TEAM) is an automated information system 

that validates REAP data by capturing actual

information on workload accomplishments 

and time usage by HUD employees. Program 

managers will continue to use this information 

in developing budget requests and as part of 

the process of assessing hiring needs and 

making hiring decisions. 

• HUD continues to take steps to improve 

internal communications and employee 

involvement so that HUD will be a more 

cohesive organization that exhibits greater

comprehension of, commitment to, and 

capacity for achieving departmental goals. 

Another Organizational Assessment Survey 

was conducted during FY 2005 to measure 

employee satisfaction with HUD’s work 

environment. HUD will implement action 

plans to address areas in need of 

improvement. 

• HUD will continue to support the workforce 

through expanded opportunities for 

professional development. The Department 

identified mission-critical occupational series 

HUD Strategic Plan 47
HUD’s Strategic Goals

that will be affected significantly by projected 

retirements. HUD implemented training and 

development strategies to meet the needs of 

HUD’s core business functions and develop 

talented leadership from within the 

organization. These initiatives included the 

creation of a comprehensive training 

curriculum using the HUD Virtual University, 

the Emerging Leaders program, and 

Operation Brain Trust – a program that

captures the critical knowledge of experienced 

HUD professionals before they retire and 

transfers it to new or less experienced 

employees. 

Improve financial management. 

Recent substantial improvements in financial 

management systems and controls have enabled 

HUD to receive clean financial statement audit 

opinions from the Inspector General (IG) for the 

last six years. Weaknesses in FHA information 

systems, which were a recurring source of audit 

deficiencies, have been significantly addressed to 

date and will be resolved completely by December 

2006. 

All systems that do not comply with the Federal 

Financial Management Improvement Act will be 

eliminated by the end of FY 2007. By the end of 

2005, non-compliant systems had been reduced to 

two, down from 17 in FY 2002. 

In addition, the Department is modernizing its 

core financial systems through the HUD 

Integrated Financial Management Improvement

Project. HUD’s goal is to provide a user-friendly 

system that improves the availability and use of 

financial information to better inform HUD’s 

business decisionmaking process. 

HUD also intends to eliminate the two remaining 

material weaknesses identified by the IG for 

FY 2005, dealing with the FHA Credit Reform 

estimation process, and risk analysis monitoring in 

FHA’s single-family insured mortgage program. 

The Department also has acted to ensure timely

management decisions on all audit 

recommendations made by the IG, and is taking 

steps during FY 2006 to cut in half the number of 

overdue final actions on these recommendations. 

The number of overdue actions has dropped from 

122 in 2001 to 16 in 2005. 

Manage information. 

Reliable information is critical for effective

management and accountability. HUD has a 

number of strategies to improve the use of data 

coming into the Department so that captured data 

elements become useful information to assist 

HUD in its decisionmaking. In recent years, the 

Department has greatly expanded the use of 

performance information to manage programs 

and operations, to guide budget decisions, to 

inform stakeholders about program results, and to 

strengthen enforcement actions against partners 

who fail to act with integrity. A number of the 

efforts described below are reflected and 

supported by performance goals in HUD’s 

Annual Performance Plan: 

• Continue to use the annual Management Plan 

process to specify operational goals that 

support the goals established in the Annual 

Performance Plan. The overall Management

Plan is integrated with Field Management 

Plans that reflect local resources, needs, and 

opportunities. 

• Maintain a strong research program focused 

on program evaluations to assess the 

effectiveness of HUD programs and develop 

recommendations for program improvements. 

• Apply principles of business process analysis 

and enterprise architecture to improve HUD’s 

management and internal controls, improve 

systems, resolve audit issues, and improve 

service delivery to all customers. 

• Continue to improve quality and integrity of 

program data. Efforts managed by the Chief 

Information Officer include assessing and 

certifying data quality in mission-critical 

systems and employing performance-based 

system development practices. 

Modernize information technology. 

The HUD Information Technology

Modernization Strategy, Vision 2010, represents a 

significant shift in the way HUD designs, invests 

in, plans for, develops, and implements IT in 

support of its business. Action plans and 

performance measures help ensure successful 

implementation. The modernization plan 

identifies several core strategies: 

• Allocate increased Development, 

Modernization, and Enhancement (DME) 

funding to improve access and capabilities for 

HUD clients and staff, while furthering 

HUD’s IT modernization plan to streamline 

48 HUD Strategic Plan
Embrace High Standards of Ethics, Management, and Accountability 

business processes and support sharing of 

system capabilities in a service-oriented 

architecture. 

• Increase use of reusable components and

shared services. 

• Collaboratively define business needs, 

functional requirements, and architectures 

with business and IT stakeholders. 

• Develop and implement an enterprise 

information security program that meets all 

information security and privacy-related 

regulations, statutes, and federal laws. 

Advance E-Government capabilities. 

The federal Electronic Government 

(E-Government) initiatives are improving the 

efficiency of public sector business through the 

power of the Internet. As an active partner in 

these initiatives, HUD is capitalizing on efforts to 

introduce shared solutions, retire redundant or 

obsolete systems, and provide innovative

technological tools to increase access to programs, 

services, and information. The Department will 

continue to focus on key E-Government efforts, 

including: 

• Grants.gov. This federal portal allows partners 

to receive email notification of funding 

opportunities from every federal agency, find 

the opportunity, and apply on line using a 

single registered ID and password. In recent 

years, HUD has taken steps to make all of its 

competitive funding opportunities available 

on Grants.gov. In the future, all funding

opportunities will be available on Grants.gov. 

Over 5,000 applications were submitted via 

Grants.gov for HUD programs in FY 2005, 

and HUD is committed to working with our 

partners to increase the number of 

successfully submitted applications in

FY 2006 and beyond. 

• E-Rulemaking. With the public launch of 

Regulations.gov, citizens can easily access and 

participate in the rulemaking process. HUD 

is one of the first agencies to migrate to ERulemaking’s Federal Docket Management 

System, collaboratively designed to assist 

federal agencies in managing and organizing 

materials and comments associated with 

rulemakings. The system provides access to 

materials that previously were difficult to

review and cumbersome to handle, especially 

when large quantities of paper were involved. 

• GovBenefits.gov. This portal, devoted to 

informing citizens about their eligibility for 

public benefit programs, continues to increase 

awareness of available HUD benefit programs 

that support the Department’s strategic goals. 

• Business Gateway. This portal provides 

information to the business community about 

HUD housing and community development

compliance. HUD currently maintains 139 

forms or instruction documents in the Forms 

Catalog on Business Gateway to increase 

awareness and availability. 

• Geospatial One-Stop. HUD is a federal spatial 

data producer and distributor, and a 

contributor of metadata to the Geospatial 

One-Stop geographic information portal. 

Sharing geospatial data allows federal agencies 

to reduce costs and improve overall federal 

spatial readiness by making its large repository 

of current and historical data discoverable and 

accessible to the public. 

• E-Authentication. HUD is a member of the 

E-Authentication Federation and is working 

towards the implementation of an approved 

E-Authentication infrastructure for a 

common, interoperable authentication service. 

The service will provide authentication that is 

appropriate for the level of risk and business 

needs. 

Federal E-Government efforts related to standard 

“lines of business” are striving to develop 

integrated solutions to common administrative 

functions. The following government-wide 

initiatives represent a significant HUD investment

of budgetary and staff resources: 

• Financial Management Line of Business. HUD has 

been an active participant in this project team, 

and has developed the HUD Integrated 

Financial Management Improvement Project 

(HIFMIP) to reflect a Department-wide scope 

consistent with these principles. HIFMIP

integrates the Department’s currently 

independent efforts to modernize financial 

systems into a single core financial system 

with a qualified external service provider.

• Grants Management Line of Business. HUD is 

actively helping define requirements, 

streamline grant-related processes, and 

improve reporting. 

• Human Resources Management Line of Business. 

Under this initiative, HUD’s human resource 

functions have been moved to an approved 

human resources Shared Service Center 

HUD Strategic Plan 49
HUD’s Strategic Goals

provided by the Department of Treasury. 

The transition has significantly reduced 

investment risk, avoided millions of dollars in 

costs, and assured delivery of a mature, 

capable human resources system. Further

improvements to human resource functions 

will occur under this effort in support of 

HUD’s mission. 

• Information Systems Security Line of Business. 

HUD is actively participating in this effort to 

guide improvements in the effectiveness and 

consistency of information systems security

across the federal government. The effort will 

deliver government-wide security solutions, 

applied across the federal government, that 

meet current and future mission and security 

demands. 

HUD also is increasing citizen access to 

information on HUD’s programs through citizen 

participation in the Consolidated Plan and 

Continuum of Care programs. These programs 

related to community development and 

homelessness allow for citizen input and decisionmaking at the community level rather than a “topdown” federal government solution imposed on 

communities. 

Enhance monitoring and enforcement. 

A cornerstone of effective management and 

accountability consists of HUD’s program 

monitoring, enforcement, and regulatory oversight 

activities, as detailed below:

• Continue implementing the RHIIP to reduce 

improper payments of low-income rent

subsidies due to the incomplete reporting of 

tenant income, the improper calculation of

tenant rent contributions, and the failure to 

fully collect all outstanding rent and properly 

bill HUD subsidies. Efforts include 

developing and implementing an upfront

income verification tool for housing 

providers, institutionalizing a quality control 

program – including oversight and monitoring 

of program administrators’ performance, 

stronger performance incentives, and 

sanctions for tenants and housing providers – 

as well as exploring program simplification 

opportunities.

• Through the REAC, rate key partners – 

including PHAs and private owners of 

assisted housing – for financial management

and physical upkeep. Low performing PHAs 

are referred to the Recovery and Prevention 

Corps in the Office of Public and Indian 

Housing for remedial action. 

• Continue to refine and improve REAC 

physical inspection processes and financial

assessments of multifamily insured and 

subsidized properties. 

• Through REAC, rate the performance of

Independent Public Accountants that perform 

financial audits of PHA and multifamily 

assisted properties. Poor performers are 

referred to the Departmental Enforcement 

Center for debarment. 

• Through the Departmental Enforcement 

Center, review the physical and financial 

condition of multifamily housing properties 

for noncompliance with HUD regulatory and 

contractual requirements and take appropriate 

action to obtain compliance or sanctions. The 

DEC will continue to suspend and debar 

participants in any HUD program who are 

not responsible business partners. 

• Through Housing’s Office of Regulatory 

Affairs and Manufactured Housing and the 

Office of General Counsel, protect consumers 

through investigations and enforcement 

actions under the Real Estate Settlement

Procedures Act, the Interstate Land Sales Full 

Disclosure Act, and the Manufactured 

Housing Construction and Safety Standards 

Act. 

• Continue the monitoring and oversight of

privately owned properties with Section 8

assistance by using Performance-Based 

Contract Administrators to assure compliance 

with HUD’s occupancy and subsidy payment 

policies. 

• Through HUD’s Mortgagee Review Board, 

levy fines against lending institutions and 

restrict their dealings with the FHA when they 

violate federal lending policies. 

• Work with participants in the mortgage 

lending industry to reduce predatory lending. 

Continue FHA’s practice of sharing the 

Neighborhood Watch/Early Warning system 

with lenders so that they, as well as FHA staff, 

can monitor mortgage default rates. 

• Continue to hire, train, and retain a quality

program monitoring and enforcement 

workforce capable of ensuring greater 

accountability for results by program 

participants. 

50 HUD Strategic Plan
Embrace High Standards of Ethics, Management, and Accountability 

• Continue to ensure enhanced field office 

oversight of Neighborhood Networks Centers 

through continued support for the 

Neighborhood Networks Strategic Tracking 

and Reporting Tool. 

Work with partners to strengthen 

performance management. 

Much of the work and progress toward HUD’s 

mission is accomplished through the efforts of the 

Department’s partner organizations. HUD is 

taking a number of steps to improve our shared 

ability to demonstrate success resulting from these 

efforts. Such accountability has become 

increasingly important because of the rigorous 

evaluation of the Performance Assessment Rating 

Tool, which the Office of Management and 

Budget is applying to all federal programs. 

The Office of Community Planning and 

Development participated in an extensive process 

of planning and negotiation with OMB and 

community development stakeholders who 

administer CPD formula grants. The process 

resulted in a new outcome performance 

measurement system for CPD’s formula grant 

programs: Community Development Block 

Grants, HOME, Emergency Shelter Grants, and 

Housing Opportunities for Persons with AIDS. 

The implementation of the CPD outcome 

performance measurement system and its use by 

grantees will enable HUD to collect information 

on the outcomes of activities funded with CPD 

grants. HUD is developing enhancements to the 

Integrated Disbursement and Information System

(IDIS) that will enable grantees to report new 

performance data and will allow HUD to 

summarize national results and benefits of these 

programs. The IDIS enhancements will become 

available in 2006. 

HUD also has instituted performance 

management principles throughout competitive 

grant programs, which are funded at about 

$2.2 billion annually. This effort is integrating 

performance measurement and budgeting for 

these diverse programs. Since FY 2002, HUD has 

required grant applicants to submit a logic model 

when seeking funding. Developing a logic model 

creates a framework for program planning, 

performance measurement, and evaluation by 

requiring grantees to document several things: 

• Which of HUD’s strategic goals the grant 

activity will support; 

• Specific activities that are crucial to success; 

• Products or outputs generated as a result of 

the activity; 

• The outcomes expected to result; 

• How the data will be collected; 

• The methodology used to evaluate success; 

and 

• The evaluation of Return on Investments to 

assess the impact of their programs on the

community being served. 

HUD has compiled the data and evaluated 

grantees’ logic models for the first several years, 

which has highlighted opportunities to streamline 

and develop more consistent and useful 

performance measures at the Departmental level. 

HUD has developed an electronic reporting 

structure on the basis of the logic models, and will 

be implementing a performance reporting system

in the near future. 

HUD’s principal management and senior 

managers also are working closely with HUD’s 

partners to jointly improve management operation 

and controls and strengthen incentives: 

• Periodically survey HUD’s customers and 

partners to assess programs, policies, and 

monitoring, as well as the Department’s 

relationship with these stakeholders. These 

assessment efforts parallel and complement 

HUD’s internal employee surveys. 

• Consult with community development 

partners to finalize the new Consolidated Plan 

Management tool. 

• Support management improvements by

troubled housing providers. The Office of

Public and Indian Housing, through local field 

offices and the Recovery and Prevention 

Corps, helps troubled housing agencies 

improve management to achieve standard or 

high-performing status. The Office of 

Multifamily Housing and the Departmental 

Enforcement Center work similarly with 

private housing providers presenting 

management troubles. These efforts are 

discussed under Goal B.

HUD Strategic Plan 51
HUD’s Strategic Goals

Performance Measures for Strategic Goal E 

HUD employs an integrated performance management approach that uses long-term goals in parallel 

with tracking indicators and annual performance goals that are published in the Annual Performance Plan 

and reported in the annual Performance and Accountability Report. 

Annual goals are supported by HUD’s internal Management Plan, which establishes program and 

operational management goals that are specific to program offices, as well as field offices. HUD will 

assess its long-term success in achieving this strategic goal by measuring the outcomes discussed below. 

Performance Measures 

• By 2008, HUD will have implemented its human capital strategic plan and will have its workforce 

training, retention, and recruitment policies in place and determined acceptable by an independent 

review. 

• Once the process is completed for identifying all skill gaps in mission-critical positions, HUD will 

reduce by 80 percent all identified skill gaps by 2011, contingent upon adequate funding. 

• Employee satisfaction will increase by 5 percent from the 2005 baseline by 2011. 

• HUD will eliminate all remaining material weaknesses by FY 2008. 

• Continue the Rental Housing Integrity Improvement Program Initiative and institutionalize 

processes into PIH’s annual Management Plan. 

• Reduce gross improper payments to less than 2.5 percent of appropriated annual funds under the

tenant-based voucher, public housing, and project-based rental assistance programs. 

• Properly align PIH Headquarters and Field Office operations to facilitate the implementation of 

asset-based management in public housing. 

• Require PHAs to develop an emergency evacuation plan in coordination with local, state, and 

federal government. 

• Increase the number of performance assessments received from Neighborhood Networks Centers. 

• Ensure that IT investments better promote enterprise collaboration by 2008, as measured by the 

level of technical standardization and use of off-the-shelf systems, reusable components, and 

shared services. 

• Increase the percentage of customers and business partners who are satisfied with the security, 

rapidness, and reliability of HUD-provided data and information. 

• Certify and accredit all information systems prior to their operation; reduce the number of 

outstanding security vulnerabilities by 25 percent per quarter; and provide topical security 

awareness training to all HUD users annually. 

• Revise and implement standards for the timeliness and accuracy of critical PIH management data, 

with the goal of achieving 97 percent timeliness and accuracy of tenant characteristics data and 

99 percent of electronic financial statements for the public housing and voucher programs. 

52 HUD Strategic Plan
Embrace High Standards of Ethics, Management, and Accountability 

External Factors 

The large number of HUD agents and grantees 

implementing HUD’s programs in the field greatly 

complicates monitoring and performance 

measurement. For instance, the assumption 

underlying the distribution of grants by formula is 

that local decisionmakers are best positioned to 

respond to local housing needs and market

conditions, and that local choices of activities that

should be funded produce the most effective 

results. 

Emerging information technologies have proven

both a potent opportunity and an area of difficulty 

for HUD. Complexities arise from external 

factors, such as the pace of innovation, 

contradictory pressures for change, the need for 

information security, including security against 

hackers, and federal procurement requirements. 

Other factors include insufficient authority to 

mandate submission of quality data, as well as the 

large scale of some of HUD’s legacy systems and 

program operations. 

HUD Strategic Plan 53
HUD’s Strategic Goals

54 HUD Strategic Plan
Strategic Goal F: 

Promote Participation of Faith-Based and 

Community Organizations 

“HUD’s efforts build on the Administration’s commitment to place faith-based 

and community organizations on an equal footing with other organizations 

that serve low-income Americans and revitalize distressed neighborhoods.” 

—Secretary Alphonso Jackson 

Strategic Objectives Supporting Goal F 

Promote Participation of

Faith-Based and Community

Organizations

F1—Reduce barriers to faithbased and community 

organizations’ participation in 

HUD-sponsored programs 

F2—Conduct outreach and 

provide technical assistance to 

strengthen the capacity of faith-based 

and community organizations to 

attract partners and secure

resources 

F3—Encourage partnerships 

between faith-based/community 

organizations and HUD grantees 

and subgrantees 

Overview

In January 2001, President Bush created the White 

House Office of Faith-Based and Community 

Initiatives and charged it with lifting up this 

nation’s charitable service organizations and 

encouraging their good works. Roadblocks – 

including outright bias, arbitrary and burdensome 

regulations, and general confusion over the way 

the federal government has addressed the 

separation of church and state – often have 

prevented HUD and other federal agencies from 

expanding federal partnerships with America’s 

faith-based groups. HUD’s goal is to break down 

the barriers and substantially strengthen and 

expand its partnerships with faith-based and 

community groups, taking full advantage of their 

capacity to provide quality services to 

communities and families. 

HUD Strategic Plan 55
HUD’s Strategic Goals

Objective F1: Reduce barriers to faithbased and community organizations’ 

participation in HUD-sponsored 

programs. 

HUD’s activities under this objective will help to 

maximize full participation by faith-based and 

community organizations, by identifying barriers 

that inhibit participation and by assessing

procurement and other internal policies and 

practices. Building on regulatory reforms put in 

place in 2003 and 2004, HUD will pursue 

remediation to any additional barriers, regulatory

or otherwise, that emerge. 

Although HUD enjoys a long history of 

partnering with faith-based and community 

groups, many have been at a disadvantage. Some 

have been required to strip themselves of their 

religious identity and to separate their faith from

their good works. Additionally, some smaller 

faith-based and community groups lack 

knowledge about the more technical aspects of 

identifying, applying for, and administering 

government funds. 

Objective F2: Conduct outreach and 

provide technical assistance to strengthen 

the capacity of faith-based and 

community organizations to attract 

partners and secure resources. 

Faith-based and community organizations, large 

and small, can play a significant role in helping 

HUD to achieve its core mission. Among other 

assets, many of these organizations have a detailed 

knowledge of the needs of low-income 

communities and have the trust of low-income 

residents. However, some smaller grassroots and 

faith-based institutions have lacked access to 

information and critical networking contacts, and 

lack complete capacity to make themselves eligible 

to receive federal funding. In response, HUD’s 

Center for Faith-Based and Community Initiatives 

(CFBCI) will reach out to groups – especially the 

smaller grassroots organizations that tend to be

excluded – and help them with educational 

seminars, technical assistance, and other services. 

By increasing the involvement of faith-based and 

community organizations in HUD’s programs, the 

Department intends to provide higher quality 

services to the nation’s communities. 

Objective F3: Encourage partnerships 

between faith-based/community 

organizations and HUD grantees and 

subgrantees. 

The goal of utilizing faith-based and community 

grassroots organizations to advance the mission of

HUD ultimately hinges on the extent to which

these organizations are able to access resources at 

the local level. HUD annually awards on the 

order of $2 billion in competitive grants for which 

nonprofit organizations are eligible. By 

comparison, $6 billion is potentially available 

through the CDBG and HOME programs – and 

more still through PHAs. Some local government 

entities may have limited experience in working 

with nonprofit, community-based service 

providers. Therefore, the CFBCI will work to 

bring together local government and community 

organizations to discuss the unmet needs of the 

community and the capacity of faith communities 

to respond to those needs. 

Additionally, the CFBCI seeks to encourage 

access to local funds by creating a greater 

transparency of the grant making processes. To 

this end, HUD will publicize the local grant 

opportunities, the points of contact, and examples 

of recent grants to faith-based and community 

grassroots organizations. 

Means and Strategies 

A number of specific strategies have potential to 

help match some of the vast resources of the 

federal government with the vision, commitment, 

and expertise of community-based religious and 

voluntary organizations that are on the frontlines. 

Planned activities include the following: 

• Eliminating or modifying requirements that 

are not mandated by statute or regulation and 

act as impediments; 

• Expanding technical assistance to faith-based 

and community groups, many of which are 

served through HUD’s capacity building 

grants; 

• Expanding outreach and field development; 

• Publicizing successful programs of faith-based 

service delivery relevant to HUD’s mission, 

with the aim of encouraging other groups to

use these programs as a model; 

• Facilitating the formation of partnerships

between formula grantees of HUD 

(community development and public housing 

56 HUD Strategic Plan
Promote Participation of Faith-based and Community Organizations 

officials) and local faith-based and community 

grassroots organizations; 

similar centers in other federal agencies to advance 

the Initiative, including those at the Departments 

of Education, Justice, Labor, Commerce, Veterans 

Affairs, Agriculture, and Health and Human 

Services. The Center’s activities in support of 

federal partnerships include the following: 

• Creating pilot programs for the purpose of

demonstrating the potential of faith-based and 

community grassroots organizations to 

advance the mission of HUD; 

• Plan and conduct interagency events and 

conferences designed to educate and train 

faith-based and community organizations on 

equal access issues and partnership 

opportunities;

• Maintaining faith-based liaison officers at the 

regional and field offices to advance the 

President’s Initiative within a local context; 

• Building partnerships between the federal 

government and corporations, foundations, 

and nonprofit organizations, including the

Corporation for National Community Service. 

• Continue pilot and demonstration projects

that bring program resources and other 

resources of these agencies together to serve 

faith-based and community organizations.

HUD established the CFBCI in compliance with 

Executive Order 13198. CFBCI is partnering with 

Performance Measures for Strategic Goal F 

HUD employs an integrated performance management approach that uses long-term goals in parallel 

with tracking indicators and annual performance goals, which are published in the Annual Performance 

Plan and reported in the annual Performance and Accountability Report. 

Annual goals are supported by program and operational management goals in an internal Management

Plan, which are specific to program offices, as well as field offices. HUD will assess its long-term success 

in achieving this strategic goal by measuring the outcomes discussed below. 

Performance Measures 

• Participation of faith-based and community-based organizations in HUD programs continues to 

increase, as evidenced by the number of grant applications for and partnerships in HUD 

programs. 

• Evaluate the number of applications by faith-based and community grantees against the previous

year’s baseline. 

• Identify and eliminate the barriers to participation by faith-based and community organizations in

HUD-sponsored programs.

• Implement and monitor the recording mechanisms for analyzing competitive grant applications 

for faith-based groups. 

• Implement and monitor the recording mechanisms for analyzing formula grant applications for 

faith-based groups. 

• Provide technical assistance and/or training to a significant number of potential faith-based and 

community-based applicants for HUD-sponsored programs. 

• Encourage HUD’s block grant recipients to create partnerships with faith-based and community 

organizations.

• Encourage faith-based and community organizations to enter into local and regional consolidated 

planning processes so as to participate in block-grant funding opportunities. 

HUD Strategic Plan 57
HUD’s Strategic Goals

External Factors 

More than 85 percent of HUD funds are 

distributed to local governments and PHAs via 

block grants, contract renewals, and vouchers. 

Faith-based and community organizations are 

typically eligible as sub-recipients for some of 

these HUD funds, but must apply through their 

respective local governments. While HUD can 

encourage certain uses of funds, and while funds 

are targeted to low- and moderate-income 

residents as the primary beneficiaries, each 

jurisdiction makes its own decision about how to 

use block grant funds. 

58 HUD Strategic Plan
ALIGNING RESOURCES WITH RESULTS

This section provides in-depth background information on three key aspects of HUD’s implementation 

of this plan: the budget and staff resources that are aligned with each Strategic Goal; the interagency 

partnerships that contribute additional resources and strategies; and the program evaluations and 

performance information that are crucial to budgeting for results. 

Budget and Staff 

The Department’s ability to achieve the targets set 

forth in this Strategic Plan depends on the level 

and allocation of budgetary and human resources. 

HUD strives to allocate resources efficiently by 

evaluating programs, consulting with stakeholders, 

and measuring performance. 

HUD has instituted a series of measures to 

increase accountability and performance. One 

such measure is the adoption of resource

management methodology. HUD has 

implemented the Total Estimation and Allocation

Mechanism (TEAM), an online tool for measuring 

the allocation of staff resources. TEAM provides 

several benefits for the Department: 

• Estimating resources for budget formulation, 

execution, and analysis; 

• Linking resources to performance measures 

specified in the Annual Performance Plan 

under the Government Performance and 

Results Act; and 

• Validating and monitoring actual resource

utilization. 

The allocation of HUD’s resources toward each of 

the strategic goals in FY 2005 is summarized in 

the table below. The strategic goals are not being 

revised in this Strategic Plan. However, some 

shifts in congressional resource allocation will 

occur in connection with hurricane recovery 

during FY 2006–2011. For FY 2006, Congress 

passed a $11.5 billion supplemental appropriation 

for the Community Development fund in support 

of Gulf Coast recovery. In the absence of the 

Gulf recovery funding, the majority of HUD’s 

budget authority is designated for affordable 

housing and strengthening communities, reflecting 

the resource-intensive nature of rental assistance 

and CDBG funding for communities. This 

distribution also reflects the self-financing nature

of much of FHA’s homeownership activity. 

Allocation of HUD Resources in FY 2005 by Strategic Goal 

Budget Authority 

(BA; $1,000) 

Salaries and 

Expenses 

 (S&E; $1,000) 

Full-Time 

Equivalent Staff 

(FTE; paid positions)

Goal A: Increase Homeownership 

Opportunities 

$2,542,592 $105,434 1,035

Goal B: Promote Decent Affordable 

Housing 

25,749,684 326,856 3,176

Goal C: Strengthen Communities 5,486,392 82,396 782

Goal D: Ensure Equal Opportunity in

Housing 

170,085 62,184 610

Goal E: Embrace High Standards of

Ethics, Management, and Accountability 

2,097,017 526,603 3,131

Goal F: Promote Participation of FaithBased and Community Organizations 129,595 7,567 66

Total Resources $36,175,365 $1,111,040 8,800

HUD Strategic Plan 59
Aligning Resources with Results 

Interagency Partnerships 

HUD relies extensively on partnerships to

accomplish its mission. While such partnerships 

may not be commonly recognized as resources 

supporting HUD’s mission, they are in fact 

resources, and many of HUD’s goals could not be 

met without the active participation of partners. 

HUD’s partners include numerous organizations 

in the private sector, including both for-profit and 

nonprofit organizations, as well as state and local 

governments. Other federal agencies also are 

critical to HUD’s success, while HUD likewise 

supports the missions of other agencies. The 

interagency cooperation that is planned during the 

period covered by this Strategic Plan is 

summarized for each strategic goal below.

Strategic Goal A: Increase 

homeownership opportunities 

• Ginnie Mae will continue to guarantee 

mortgage-backed securities backed by pools 

of mortgages that are insured by the FHA and 

the Department of Agriculture’s Rural 

Housing Service (RHS) or guaranteed by the 

Department of Veterans Affairs (VA). 

• To implement and enforce the Real Estate

Settlement Procedures Act (RESPA) 

effectively, HUD will enhance coordination 

with the major banking regulators including 

the Federal Deposit Insurance Corporation 

(FDIC), the Comptroller of the Currency, the 

Office of Thrift Supervision, and the Federal 

Reserve Board. In addition, HUD will work 

with the Department of Justice, the Federal 

Trade Commission, and state attorneys 

general, and regulators on joint enforcement 

actions. 

• HUD also will continue to work cooperatively 

with the above regulatory agencies to collect 

data under the Home Mortgage Disclosure

Act (HMDA). The Federal Financial 

Institutions Examination Council is the 

governing board that is responsible for 

collecting and disseminating this information. 

HMDA data show how mortgage credit is 

provided across the country and are 

invaluable in assessing disparities in lending 

practices among mortgage lenders that affect

underserved groups. 

• HUD will continue to work with agencies, 

such as the Department of the Treasury to 

address predatory lending. The Interagency 

Task Force on Predatory Lending consists of 

federal law enforcement and banking 

supervisory agencies jointly seeking solutions 

to the problem of predatory lending. In 2005, 

the Office of Federal Housing Enterprise 

Oversight required GSEs to begin reporting 

cases of mortgage fraud. These data will 

greatly enhance understanding of the scope 

and nature of mortgage fraud. 

• HUD cooperates with the Department of

Justice to enforce fair housing laws that 

prohibit discrimination on the basis of 

minority status or disability. HUD also serves 

on the Interagency Task Force on Fair 

Lending, whose members include the 

Departments of Justice and the Treasury, 

FDIC, Federal Housing Finance Board, 

Federal Reserve Board, Federal Trade 

Commission, National Credit Union 

Administration, Office of Federal Housing 

Enterprise Oversight, Office of the 

Comptroller of the Currency, and Office of 

Thrift Supervision. The Task Force 

coordinates fair lending activities across all 

federal agencies. 

• Under a plan approved by the Federal 

Housing Finance Board, HUD formed a new 

partnership with the Federal Home Loan

Bank (FHLB) of Seattle to buy up to

$100 million in loans guaranteed by HUD 

under Title VI of the Native American 

Housing Assistance and Self Determination

Act. HUD guarantees of principal and 

interest will help create an incentive for other 

financial institutions to extend financing to

Native American communities. 

Strategic Goal B: Promote decent 

affordable housing 

• HUD has a cooperative agreement with the 

Department of Health and Human Services 

(HHS) to implement the National Directory 

of New Hires (NDNH) database. This allows 

HUD to conduct quarterly data matching of 

HHS employment information with HUD 

public housing and Housing Choice Voucher 

60 HUD Strategic Plan
Interagency Partnerships 

(HCV) program participants nationally. The 

data matching is projected to minimize the 

$1.2 billion in improper payments stemming 

from tenant underreporting of income. 

Access to the NDNH database provides 

public housing agencies that administer HUD 

programs in local communities the 

information they need to validate tenantreported income of individuals participating in 

HUD’s public housing and HCV programs. 

• In 2005 and 2006, the Federal Emergency 

Management Agency (FEMA) contracted with 

HUD to operate the Katrina Disaster 

Housing Assistance Program (KDHAP). 

Under the program, HUD-assisted renters

and homeless individuals displaced by the 

Gulf Coast hurricanes can receive housing 

assistance for up to 18 months. In 2006, 

HUD continued to operate the program 

under 2006 supplemental funding. 

• HUD will continue to work with the 

Department of the Treasury to ensure 

efficient use of the Low-Income Housing Tax 

Credit (LIHTC). HUD has done significant 

research on the tax credit program to inform 

LIHTC policy. HUD sets the maximum 

LIHTC rents by publishing estimates of 

60 percent of area median income, and 

identifies Difficult Development Areas and 

Qualified Census Tracts – areas where tax

credits can be taken on a higher percentage of 

a project’s “qualified basis.” HUD’s Office of 

Housing continues to work with Treasury to 

make the LIHTC program work better with 

FHA insurance. HUD also works closely 

with Treasury on tax-exempt bond regulations 

and other tax policy rulings that affect the

continued provision of quality multifamily 

housing with affordable rents. 

• HUD recently signed a memorandum of

understanding (MOU) with the USDA Rural 

Housing Service. The purpose of this MOU 

is to ensure an ongoing working relationship 

between HUD and the RHS in preserving

affordable rental housing in rural America. 

The MOU will facilitate the processing of 

Multifamily Housing Assistance Payment 

contract renewals for RHS-financed projects. 

• HUD is continuing a pilot program in 

11 states called Project Access, a joint effort 

between HUD and HHS, designed to ease the 

transition of nonelderly persons with 

disabilities from nursing homes into 

community living. 

• HUD will work with the Environmental 

Protection Agency (EPA) and the 

Department of Energy in a partnership that 

supports the goals of the President’s National 

Energy Policy and the Energy Policy Act of 

2005 by promoting more widespread 

construction to meet Energy Star 

qualifications and use of Energy Star products 

in HUD’s inventory of public, assisted, and 

insured housing, and by CDBG and HOME 

grantees. 

• HUD and the Federal Housing Finance Board 

signed a MOU in 1999 that sets forth the 

policy for approving the use of FHLB

Affordable Housing Program (AHP) funds 

for subordinate financing of Section 202 and 

Section 811 projects. The need for a policy 

was prompted because sponsors of these 

properties were increasingly approaching 

FHLBs for AHP subordinate financing, for a

variety of reasons. The MOU streamlined the 

approval process and decreased the time it

takes for financing to become available for 

these projects, which house elderly and 

disabled persons. 

• HUD will continue to work closely with a 

number of federal agencies, including the 

Departments of Health and Human Services 

and Labor, to ensure the successful 

implementation of welfare reform policies

designed to help low-income families make

progress toward self-sufficiency. HUD serves 

on the Interagency Committee on Supports

for Low-Income Workers, promotes the HHS 

Assets for Independence competitive grant 

program through HUD’s communications 

mechanisms, and assists HHS in its technical 

assistance program for state welfare agencies, 

including through technical assistance 

conferences and broadcasts. HUD also 

encourages HUD-funded employment and 

training programs, as well as subsidized 

housing providers to: (1) establish and 

maintain Neighborhood Networks Centers 

for the implementation of such programs, and 

(2) coordinate and partner with the 

Department of Labor’s national system of 

One-Stop Employment Centers. 

• HUD has worked with HHS to develop 

guidance and a model cooperative agreement 

for PHAs and local welfare agencies. PHAs 

are encouraged to enter into cooperative

agreements with local welfare agencies to 

target services and assistance to welfare 

HUD Strategic Plan 61
Aligning Resources with Results 

families who receive housing assistance, as 

well as to reduce fraud and noncompliance

with program requirements. 

• HUD and HHS work collaboratively to 

increase the availability of assisted living 

facilities for low-income seniors, especially

through coordination with states that have

Medicaid waivers and can spend Medicaid 

funds on assisted living services. 

• HUD signed a MOU with the FDIC to 

establish a national partnership to promote 

financial education using Money Smart, 

FDIC’s financial education curriculum. FDIC 

and HUD continue to educate over 4,000

PHAs to support Welfare to Work vouchers. 

• HUD works with the Department of 

Education to inform residents through 

Neighborhood Networks Centers of the 

financial aid opportunities available to them to 

further their education. 

• HUD works with the National Aeronautics 

and Space Administration (NASA) through 

Neighborhood Networks Centers to provide 

opportunities for residents of FHA-insured 

and assisted multifamily housing properties to

be exposed to career possibilities in the areas 

of science and math. 

Strategic Goal C: Strengthen 

communities 

• HUD is a member of the U.S. Interagency 

Council on the Homeless. The other federal 

departments represented on the Council 

include the Departments of Agriculture, 

Commerce, Defense, Education, Energy, 

HHS, Justice, Labor, Interior, Transportation, 

and VA, the Social Security Administration, 

the Federal Emergency Management Agency, 

the General Services Administration, the 

Office of Management and Budget, the 

National Corporation for National 

Community Services, and the U.S. Postal

Service. The Council coordinates federal 

programs supporting homeless families and 

individuals to minimize duplication and 

improve overall results. 

• Through a MOU with the Internal Revenue 

Service (IRS), HUD is helping link lowincome individuals and families to free tax 

preparation, electronic filing, and asset 

building assistance. The partnership 

promotes a national tax assistance program 

using the IRS Volunteer Income Tax 

Assistance program. 

• HUD will continue to work with the 

Departments of HHS and VA to better 

integrate HUD housing for homeless persons 

with HHS and VA service resources. The 

three agencies will continue to sponsor policy 

academies with state agencies to bring senior 

state and local policymakers together to 

discuss how to improve access to mainstream 

federal service programs by persons who are 

homeless. 

• HUD is collaborating with HHS and the 

White House Office of National AIDS Policy 

in assisting our community partners in 

addressing the challenges from the HIV 

epidemic. These efforts involve the 

coordination of training and technical 

assistance for providers of housing, 

healthcare, and other social services for 

persons with HIV/AIDS, including 

participation by grassroots and faith-based 

community organizations. In addition, HUD 

is collaborating with the Centers for Disease 

Control and Prevention (CDC) on a study of 

the connections of homelessness or stable 

housing to HIV transmission and the 

progression of HIV disease, to assist CDC in 

gaining understanding in addressing the 

special needs associated with HIV and in 

helping prevent HIV transmission. 

• HUD works with the Department of Justice 

and the EPA to enforce the Lead Disclosure 

Rule of the Residential Lead-Based Paint 

Hazard Reduction Act of 1992, which 

requires that landlords and sellers of housing 

constructed prior to 1978 provide each 

purchaser or tenant with information about 

lead hazards. 

• HUD is working on the Healthy Homes 

Initiative with the CDC, the EPA, the 

National Institute for Occupational Safety and 

Health, the National Institute of Standards 

and Technology, and the National Institute of

Environmental Health Sciences. Under the 

initiative, HUD awards grants to public and 

private organizations and makes agreements 

with other federal agencies for evaluation 

studies and demonstration projects to address 

housing conditions responsible for diseases

and injuries. 

62 HUD Strategic Plan
Interagency Partnerships 

• HUD is continuing joint research with FEMA 

that will help reduce the risk and economic 

impacts of floods. 

• As part of HUD’s commitment to the 

environment, the Department works with the 

Council on Environmental Quality to enhance 

environmental compliance and with the 

Department of Energy to foster energy 

savings and innovation. HUD also is a 

member of the Advisory Council on Historic 

Preservation and actively supports the 

integration of historic preservation in the 

administration of its programs. 

• In a partnership that has lasted 37 years, HHS 

assists HUD in administering its program of 

mortgage insurance for hospitals. HHS 

provides architectural and engineering 

services, helps HUD evaluate applications,

and supports HUD’s monitoring of the 

hospitals in the portfolio. The departments 

recently signed a new Interagency Agreement 

that extends this partnership for another five 

years. 

Strategic Goal D: Ensure equal 

opportunity in housing 

• HUD chairs the President’s Council on Fair 

Housing, which is an interagency group 

committed to promoting equal opportunity in 

mortgage lending, and serves on the 

Interagency Task Force on Fair Lending, 

which coordinates enforcement of fair lending 

laws across the federal government. Through

the Interagency Task Force on Fair Lending, 

HUD works with the Departments of Justice 

and the Treasury, the FDIC, Federal Housing 

Finance Board, Federal Reserve Board, 

Federal Trade Commission, National Credit 

Union Administration, Office of Federal 

Housing Enterprise Oversight, Office of the 

Comptroller of the Currency, and Office of 

Thrift Supervision to provide guidance to

lenders consistent with the Fair Housing Act 

and the Equal Credit Opportunity Act and

their implementing regulations. 

• The Interagency Working Group on Limited 

English Proficiency (LEP), chaired by the 

Office of the Assistant Attorney General Civil 

Rights Division of the Department of Justice, 

consists of representatives from all federal 

civil rights offices. The group is working to 

ensure effective and efficient implementation 

of Executive Order 13166 and Title VI of the 

Civil Rights Act of 1964 as it relates to LEP 

issues. The Group will ensure that persons 

with limited English proficiency will have

meaningful access to funded and federally 

conducted programs and activities. 

• HUD and the Department of Justice continue 

to coordinate their fair housing enforcement 

activities, especially with respect to

responding quickly and effectively to Fair 

Housing Act complaints that involve criminal 

activity (e.g., hate crimes), a pattern and 

practice of housing discrimination, or the 

legality of state and local zoning or other land 

use laws or ordinances. 

• HUD will continue to work with the 

Departments of Justice and Treasury to 

ensure that LIHTC projects are in compliance 

with the Fair Housing Act. Under a MOU, 

the three agencies formalized a monitoring

and compliance process to ensure that lowincome housing tax credit properties meet the 

requirements of the Fair Housing Act. 

• HUD is partnering with HHS to help states 

and communities comply with Olmstead v. L.C.

by providing community living options for

persons with disabilities. In the pilot 

initiative, HUD is supplying vouchers and

technical assistance, while HHS, working 

through state Medicaid agencies, is providing 

Nursing Home Transition Grants, Medicaid 

funds, and other resources to facilitate the 

transition to community living. 

• As part of the Presidential Task Force on 

Employment of Adults with Disabilities, 

HUD proposed and designed a national pilot 

project implemented in 1999 to learn how

federally supported service programs might 

better lead to employing adults with 

disabilities, especially adults who are members 

of racial, ethnic, or language minority 

communities.

Strategic Goal E: Embrace high 

standards o ethics, management, and 

accountability 

f

• HUD will continue to rely on the Department 

of Justice to accept civil referrals of 

multifamily development owners who have

troubled management. Criminal referrals are 

sent to HUD’s Inspector General. 

• HUD will continue to show leadership in 

housing and community development policy 

by supporting cooperative research efforts. 

These include the National Survey of 

HUD Strategic Plan 63
Aligning Resources with Results 

Homeless Assistance Providers and Clients 

(involving HHS, along with a number of other 

agencies); an Interagency Agreement with the 

Department of Justice’s National Institute of 

Justice to evaluate drug elimination strategies; 

and coordination with the Department of

State to enter into MOUs to facilitate 

information exchange with counterpart

housing officials from other countries. 

• HUD continues to participate in the 

interagency FedStats task force to facilitate 

electronic data dissemination. FedStats is

intended to provide an interagency 

clearinghouse for statistical data that will 

transform existing information searches from 

a fragmented, agency-focused process to a 

more unified and customer-oriented one.

Strategic Goal F: Promote participation of 

faith-based and community organizations 

• HUD’s CFBCI will partner with the Centers 

for Faith-Based and Community Initiatives at 

the Departments of Education, HHS, Justice, 

and Labor to plan and conduct interagency 

events and conferences. The conferences are 

designed to educate and train faith-based and 

community organizations on partnership 

opportunities, launch pilot and demonstration 

projects, and build partnerships between 

corporations, foundations, and nonprofit 

organizations. The Corporation for National 

Community Service will also play a role, and 

the Department of Agriculture will also be 

invited to participate. The effort will 

strengthen the capacity of faith-based and 

other community organizations to better meet

the social and economic needs in America’s 

communities.

64 HUD Strategic Plan
Policy Development, Program Evaluations, and Related Research

Policy Development, Program Evaluations, 

and Related Research 

Research and Evaluation 

HUD’s Office of Policy Development and 

Research (PD&R) has a long-term research

planning process designed to provide a solid 

foundation for future policy development. The 

process results in the identification of a large 

number of research and evaluation projects with 

high technical merit, and the selection of the most

necessary and timely of those projects within the 

limited resources available in any given year. 

Pursuant to HUD’s FY 2006 appropriations act, 

the National Research Council will conduct an 

evaluation of the research plan of the Department

and provide recommendations about the future 

course of needed research. 

PD&R’s research mandate is not limited to HUD

programs. Since its inception, PD&R has 

committed significant resources to measure and 

understand America’s housing and neighborhood 

circumstances. PD&R-supported surveys cover 

two basic aspects of housing – the stock of 

existing housing and the flow (or construction) of 

new housing units. 

PD&R has sponsored the American Housing 

Survey, a comprehensive survey of housing units 

and neighborhoods, for over 35 years. The survey 

collects information on all aspects of America’s 

housing: physical condition, size, age, quality, type 

of structures, features and equipment, heating, 

plumbing, kitchens, tenure, rents and values, 

financing, and mortgages. To support comparison 

of the housing stock with the housing needs of

the American people, it also collects information 

about the size of households, and the age, race, 

sex, immigration status, education, and marital 

status of their members, the financing of their 

housing units, and the amounts and sources of 

their incomes. This information supports 

assessments of the degree to which Americans are 

able to find affordable housing, the level of unmet 

housing needs, and the variation of unmet needs 

among different types of families. 

The production of new housing is an important 

form of investment in the U.S. economy. The 

flow of new housing units supports this country’s 

ability to provide safe and sanitary housing at 

reasonable costs to all Americans. To measure the 

size of this flow, HUD sponsors the Survey of 

Construction (Starts, Completions, and Sales), the 

Survey of Placement of New Manufactured 

(Mobile) Housing Units, and the Survey of

Absorption of New Apartments. 

How Evaluation Has Influenced 

This Strategic Plan 

Since HUD’s largest housing assistance program, 

the Housing Choice Vouchers (HCV) program,

got its start in 1974 with a carefully-designed 

experiment and evaluation, the Department has 

sought to ground policy decisions in objective 

research. A number of strategic objectives and 

specific strategies identified in this strategic plan 

have been similarly shaped by research: 

• HUD’s promotion of minority 

homeownership is influenced by studies, such 

as “The Importance of Wealth and Income in 

the Transition to Homeownership” (2004). 

This study shows that both household wealth 

and current income are important factors in 

achieving homeownership, while wealth is

even more critical for successful minority 

transitions. There is some evidence that 

wealth may be diminishing in importance as a 

prerequisite for achieving homeownership. 

• Flexibility for PHAs to establish term limits, 

and graduation bonuses to create incentives 

for transitions to self-sufficiency – these 

policies reflect the broader implementation of 

concepts examined in “Housing Agency 

Responses to Federal Deregulation: An 

Assessment of HUD’s ‘Moving To Work’ 

Demonstration” (2004). 

• A 2004 study of the costs of operating public 

housing led to negotiated rule-making with

PHAs and has enabled HUD’s transition to 

asset-based management of individual 

developments rather than providing operating

subsidies for entire PHAs. 

• Quality control studies, which measure the 

accuracy of tenant rent determinations for

assisted housing programs, have played a 

critical role in HUD’s successful progress in

reducing erroneous payments in connection 

HUD Strategic Plan 65
Aligning Resources with Results 

with the President’s Management Agenda. 

Also arising from this work is proposed 

legislation to simplify the calculation of tenant

rents. 

• HUD’s strategic objective to improve public 

awareness of rights and responsibilities under 

fair housing laws grows out of a 2001 study 

that revealed limitations in public 

understanding of what types of conduct 

constitute illegal housing discrimination. 

HUD is conducting follow-up research on

this topic. 

Evaluation Strategy 

PD&R is in the process of substantially increasing 

program evaluation activity to support an

Executive branch effort to carefully evaluate the 

performance and impacts of government 

programs, including HUD programs. PD&R’s 

ability to carry out this expanded level of program 

evaluation activity will depend on the availability 

of adequate appropriations. Based on input from 

the Secretary and program offices within HUD, 

PD&R is developing a program evaluation plan to

ensure that evaluations advance key policy

objectives and that major HUD programs are 

reassessed at regular intervals. 

While PD&R regularly evaluates each of HUD’s 

principal programs, there currently is no fixed 

timetable that dictates specific intervals for

evaluating a particular program. Rather, decisions 

about when to evaluate programs are made on the 

basis of input from the Secretary, program offices, 

and PD&R, in light of current policy needs, recent 

program experience, and budget constraints. 

While early implementation evaluations and 

impact evaluations are generally conducted for 

significant new programs, most evaluations of 

mature programs focus in depth on particular 

issues that need research. 

Forthcoming Evaluation and Research 

PD&R currently has an active docket of program 

evaluations and related research designed to help

improve program performance and inform the 

Department’s policy development process. 

This section describes, by strategic goal, HUD’s 

recent and ongoing program evaluations and 

related research. This section also summarizes the 

impact that certain prior research projects have 

had on HUD policy. 

These efforts consist primarily of the work of 

PD&R, although several evaluations being 

conducted by other organizations also are 

included. Additional information on HUD 

program evaluations and research, including 

copies of recently issued reports, may be found on 

the website for PD&R: www.huduser.org. 

Strategic Goal A: Increase 

homeownership opportunities 

• Increasing minority homeownership. The 

President has established an ambitious goal to 

create 5.5 million more minority homeowners 

by 2010. In support of this objective, PD&R 

has initiated studies of the reasons for the 

racial and income gaps in homeownership and 

the early homeownership experiences of lowincome families. Work in this area is being 

expanded to include topics, such as the extent 

of any supply-side constraints on lower 

income homeownership opportunities and the 

effectiveness of policies and programs aimed 

specifically at boosting minority 

homeownership and helping low-income and 

minority families to remain homeowners. In 

2007, PD&R expects to begin an evaluation 

of the effect of homeownership counseling. 

• Affordable housing goals for GSEs. Past

PD&R analyses have provided a foundation 

for establishing the GSE housing goals to

ensure that the institutions do their utmost to 

help make housing affordable. In 2006 

PD&R will analyze the 2005 performance of 

the GSEs, Fannie Mae and Freddie Mac, 

against the affordable housing goals and 

subgoals that became effective in 2005. These 

goals are intended to ensure that the GSEs do 

their part to expand affordable housing 

opportunities, especially homeownership, for 

low-income and minority families and families 

living in underserved areas. PD&R will also 

analyze the GSEs’ performance relative to 

that of other institutions in the mortgage

market. 

• Evaluations of HUD homeownership 

programs. To better understand the impact 

of HUD homeownership programs and 

determine how they can be improved, PD&R 

will initiate or continue work on a number of 

program evaluations, including evaluations of 

Housing Choice Voucher homeownership, 

homeownership activity under HOME, FHA 

single-family insurance, and programs that 

66 HUD Strategic Plan
Policy Development, Program Evaluations, and Related Research

concentrate homeownership investments in 

particular neighborhoods. Past research in

this area has led to significant improvements 

in HUD’s homeownership programs. For 

example, an evaluation of the FHA 

assignment program led to termination of that

program and institution of new FHA loss 

mitigation tools. PD&R analysis also has 

contributed to the development of mortgage 

scorecards for use in FHA’s automated 

underwriting and to the restructuring of FHA 

mortgage insurance premiums. An evaluation 

of the Accelerated Claims Disposition 

Demonstration, which involves FHA payment 

of certain claims prior to foreclosure and 

immediate transfer of the property to a joint 

venture in which FHA retains an interest, is 

well under way. 

In 2006, PD&R expects to begin an 

evaluation of the duration of homeownership 

of families assisted by HOME. In 2008, 

PD&R will begin a similar study of 

homeownership supported by CDBG. This 

year, the Office of Public and Indian Housing 

plans to evaluate PIH homeownership 

programs, including Section 32 public housing 

homeownership and lessons learned from 

Section 5(h). 

• Providing essential data on 

homeownership and other housing issues. 

A significant portion of PD&R’s budget is

dedicated to funding major ongoing housing 

market surveys that provide critical data on 

the state of the nation’s housing stock and 

markets. These surveys include the American 

Housing Survey, the Residential Finance 

Survey, the Survey of New Home Sales and 

Completions, the Survey of Market 

Absorption, and the Survey of New 

Manufactured Homes Placements. 

• Building technology. PD&R will undertake 

research to explore new approaches for 

production, rehabilitation, and maintenance of 

housing to enhance safety, durability, 

affordability, and energy efficiency. The longterm research and evaluation strategy of the 

Partnership for Advancing Technology in

Housing (PATH) will be posted by late spring 

of 2006.6 Other areas of needed research 

include expanded research in support of 

modernization of the Manufactured Housing 

 

6 See http://www.pathnet.org/sp.asp?mc=about_path. 

Construction and Safety Standards Act, 

research on the needs of special users, 

including the disabled and the elderly, energy 

research, and technological research to 

support HUD’s own assisted housing 

programs. 

• Real Estate Settlement Procedures Act 

(RESPA) analysis. Since the passage of

RESPA in 1974, PD&R has helped to shape 

its implementation and enforcement. PD&R

economists have worked to help the 

Department simplify and improve the 

mortgage origination process so that

consumers can benefit from lower settlement

service prices. PD&R will consumer-test new 

Good Faith Estimate forms, estimate savings 

from RESPA reform, and assess any impacts 

of RESPA reform. 

• Reducing closing costs. Closing costs 

contribute to the upfront cost of buying a 

home, but there is little empirical work in this 

area because of the lack of a useful database. 

PD&R is currently analyzing a database of

FHA mortgages that can provide reliable 

information on closing costs for the nation as 

a whole, for each of the 50 states, and for

certain cities and metropolitan areas. Analysis 

of this database will help to guide 

policymaking on strategies for reducing 

closing costs. 

• Predatory lending. PD&R will continue its 

analysis of the subprime lending market to 

help policymakers distinguish between 

legitimate subprime lending activity that helps 

to expand homeownership opportunities for 

low-income and minority families, and 

predatory lending that takes advantage of

these families. One basis for PD&R’s analysis 

will be the new Home Mortgage Disclosure 

Act data on high-cost lending. 

Strategic Goal B: Promote decent 

affordable housing 

• Regulatory barriers to the production of 

multifamily and single-family housing. 

State and local regulations operate as a 

significant barrier to the production of 

affordable housing. Various studies estimate 

that construction and development costs can 

be reduced as much as 35 percent through 

new regulatory tools and processes. PD&R 

research will help policymakers better 

understand the nature and effects of these

barriers and options for overcoming them. 

HUD Strategic Plan 67
Aligning Resources with Results 

Among other impacts, past research has 

identified opportunities for streamlining 

rehabilitation codes to stimulate greater rehab 

activity to preserve existing housing. 

Additional research topics under 

consideration include regulatory barriers in

the form of land use, building code, and other 

regulatory impediments, and opportunities to 

reduce the cost of land and infrastructure – 

the fastest rising component of housing costs. 

• Development and evaluation of new 

strategies for expanding access to 

affordable housing. These include strategies 

for facilitating access to financing for 

construction and land acquisition and 

expanding access to information on the 

availability of land suitable for the 

development of affordable housing. 

• Improving the quality and management 

accountability of public and assisted 

housing. PD&R is working to help improve 

management of public and assisted housing, 

including a cross-cutting analysis of housing 

quality in HUD’s various rental housing 

programs – public housing, Housing Choice 

Vouchers, and the project-based Section 8 

program. 

• Strengthening the Housing Choice 

Voucher Program. PD&R has a longstanding research program focused on 

evaluating and improving the voucher 

program, which is HUD’s largest affordable 

rental housing program. Among other things, 

PD&R plans to mine the wealth of research

on the HCV program to distill lessons for 

states in implementing the new Housing 

Assistance for Needy Families program. In

2006, PD&R will begin a study to try to 

develop alternative methods for developing

the Fair Market Rents necessary for the 

operation of the HCV program, as well as

other housing assistance programs. In 

coming years, PD&R expects to begin an 

assessment of rent reasonableness in the 

voucher program (2008) and an assessment of 

the geographic patterns in how voucher 

holders access affordable units (2009). 

• Helping HUD-assisted renters make 

progress toward housing self-sufficiency. 

PD&R has several evaluations under way 

designed to advance this objective, including: 

the Family Self-Sufficiency program 

assessment; the Effects of Housing Vouchers 

study; and the Moving to Opportunity for

Fair Housing evaluation. PD&R is also 

closely analyzing HUD administrative data to 

establish a benchmark for assessing the 

efficacy of future efforts to increase the 

incomes of families in public and assisted 

housing. Work on these priorities will 

continue in future years. Also underway, is a 

PIH evaluation of its programs that promote 

homeownership, including Section 32, 

Section 24/9 and ROSS Homeownership 

Supportive Services. In 2009, PD&R is 

planning an evaluation of Employee

Assistance Programs for homeownership. 

• Other affordable housing topics under

consideration. Other program evaluations 

under consideration for FY 2006 and beyond 

include: an evaluation of assisted living 

conversions and other initiatives to

appropriately house the aging elderly; a study 

of the HCV administrative fee structure; a 

study of landlord relations in the HCV 

program; a study of the outcomes for people 

leaving housing assistance; and a study of 

both the factors leading owners to opt out of 

the project-based Section 8 program, and the 

effectiveness of policies to preserve this 

housing stock. Some specific projects that are 

planned for future years are an assessment of 

LIHTC projects that are at least 15 years old 

and an evaluation of the reasons people leave 

assisted housing. 

Strategic Goal C: Strengthen 

communities 

• Ending chronic homelessness. PD&R is 

actively engaged in research designed to 

support the Secretary’s goal of ending chronic 

homelessness. Projects include researching 

effective strategies for meeting the needs of 

on-the-street homeless individuals and 

evaluating the effectiveness of HUD-funded 

permanent supportive housing for persons

with disabilities, including serious mental 

illness. In FY 2008, PD&R expects to begin 

an evaluation of the effectiveness of the 

Shelter Plus Care program. 

• Preventing homelessness. To effectively 

address the challenge of homelessness, it is 

essential to focus on preventing families and 

individuals from becoming homeless in the 

first place. To help develop more effective 

policies for preventing homelessness, PD&R 

68 HUD Strategic Plan
Policy Development, Program Evaluations, and Related Research

will be researching the causes of 

homelessness, with a focus on procedures for 

discharging individuals from various publicly 

funded institutions, including jails and mental 

health institutions. PD&R is continuing work

to assess the cost-effectiveness of different 

approaches toward dealing with the 

homelessness problem. Additionally, during 

FY 2006, PD&R and CPD plan to begin a 

major evaluation of the outcomes associated 

with the Supportive Housing program. 

• Evaluating outcomes of the Healthy 

Homes Initiative. The Office of Healthy 

Homes and Lead Hazard Control is evaluating

the effectiveness of its Healthy Homes 

Initiative grants in assessing and mitigating

mold, allergens, lead, carbon monoxide, and 

other environmental health and safety 

hazards. 7

• Disaster recovery in the Gulf Coast region. 

PD&R will support reconstruction following 

the 2005 hurricanes and improved response 

capacity for future emergencies. In 2006, 

PD&R will assess the post-disaster housing 

markets in the region and may be able to offer 

technical help to state and local planners. 

In 2007, PD&R hopes to provide technical 

assistance to devastated Gulf communities

that will lead to the acceptance and integration 

of improved housing designs into local 

building codes and community plans for areas 

vulnerable to storm and flood. HUD will also 

try to help jurisdictions to harmonize the 

building codes in the region. PD&R plans to 

encourage the use of innovative housing 

technologies in reconstructed housing by

2008. This effort will include information and 

technology transfer, technical assistance to 

state and local governments, and outreach to 

the design and construction industry so that 

the appropriate use of innovative technologies 

is understood. 

By 2009, PD&R intends to create Internetbased tools and imputation methodologies so 

that damage estimates will be more precise 

and more quickly available after emergencies. 

PD&R will develop designs for rapid 

recovery, permanent housing that can be

constructed affordably and quickly following a 

 

7 Information about Healthy Homes Initiative grants may be

found at: http://www.hud.gov/offices/lead. 

disaster by 2010, for use by agencies that have 

mandates to build such housing. 

• State of the Cities Data Base. PD&R 

maintains and updates the State of the Cities 

Data System, which provides community and 

economic development practitioners with a 

centralized source of a variety of economic, 

demographic, and housing data. Practitioners 

and researchers use the data system to track 

local conditions in cities and suburbs across 

the nation. 

Strategic Goal D: Ensure equal 

opportunity in housing 

• Housing discrimination. PD&R has an 

active research program designed to better 

understand the extent and nature of housing 

discrimination. Activities include a major 

study of the extent of housing discrimination 

in 2000 in the rental and homeownership 

markets (funded through the Fair Housing 

Initiatives Program, or FHIP). This study 

updated the major study conducted in 1989 

that found a substantial amount of differential 

treatment of minorities seeking to buy or rent 

housing and led to the authorization for the 

FHIP. PD&R expanded this research by 

developing testing methods for detecting 

housing discrimination against persons with 

disabilities and by conducting the first-ever 

assessment of housing discrimination against 

Native Americans. Other recent studies have 

assessed the level of public awareness, rights, 

and responsibilities under the fair housing 

laws. PD&R will continue to support the 

efforts of the Office of Fair Housing and 

Equal Opportunity in this area in coming 

years. 

• Housing accessibility. PD&R research 

helps to assess compliance with accessibility 

standards and to develop strategies for 

making the marketplace more aware of those 

standards. A recent study found that most 

new multifamily properties comply with some 

of the accessibility standards, but few comply 

with all of them. PD&R has under way a 

study to assess how conformance with 

multifamily building guidelines has changed in 

recent years. 

• Other fair housing topics under 

consideration. Among the studies that are 

being considered for the future are: (1) an 

engineering study to improve cross-slopes on 

accessibility ramps, (2) an evaluation of the 

HUD Strategic Plan 69
Aligning Resources with Results 

f

Fair Housing Training Academy, (3) a study 

to help improve Title VIII case processing, 

(4) data collection and analysis related to 

occupancy patterns in LIHTC units, and 

(5) an evaluation of HUD’s compliance with 

race and ethnicity data requirements. 

Strategic Goal E: Embrace high 

standards o ethics, management, and 

accountability 

• Program evaluation activity. In an effort to 

strengthen the accountability of HUD 

programs for results, PD&R plans to 

substantially increase funding for HUD 

program evaluations in FY 2007 and future 

years. Based on input from the Secretary and 

program offices within HUD, PD&R will 

develop a plan for program evaluation activity 

to ensure that it advances key policy 

objectives and leads to regular periodic 

evaluations of major HUD programs. 

• Research specific to performance 

management and the Government

Performance and Results Act. PD&R will 

continue its research program to improve 

HUD’s ability to measure the direct effects of 

HUD’s programs. The American Housing 

Survey, program evaluations, and specialpurpose research efforts provide and validate 

performance data about program impacts. 

• Reducing errors in income and rent 

determinations. HUD conducts periodic

evaluations of the income and rent

determinations of HUD’s rental assistance 

programs to gauge the magnitude of errors 

and develop recommendations for reducing 

them. 

Strategic Goal F: Promote participation of 

faith-based and community organizations 

• Building the capacity of faith-based and 

grassroots nonprofit organizations. Prior 

research by PD&R identified the lack of 

organizational capacity as a key obstacle to the 

funding (or expansion of funding) of many

smaller nonprofit groups active in the housing 

and community development areas, including 

faith-based groups. Future research in

coordination with HUD’s Center for FaithBased and Community Initiatives will assess 

effective strategies for strengthening these 

groups’ capacity and will identify improved 

criteria for assessing capacity among smaller 

groups. PIH and PD&R have underway a 

demonstration in which faith-based 

organizations provide mentoring to 

HOPE VI residents. In 2007, PD&R will 

evaluate this initiative. In 2010, PD&R plans 

to study the unique contribution faith-based 

organizations make to the programs they 

administer. 

70 HUD Strategic Plan
APPENDIX

The appendix provides a broader, contextual view of four areas affecting HUD’s strategies and 

performance: (a) a description of performance management at HUD and the development of this

Strategic Plan; (b) an assessment of major economic, social, demographic, or other trends that have 

potential to affect achievement of HUD’s goals; (c) a background summary of HUD’s response to the 

Gulf Coast disaster; and (d) the key statutes that define HUD’s mission and operations. 

Strategic Planning and Performance 

Management at HUD 

The Performance Management Cycle 

This section briefly describes how HUD uses the 

Strategic Plan. The diagram shows the integrated 

set of strategic planning and performance 

management tools that HUD uses to produce 

results. Together, the tools ensure better planning 

and accountability for results consistent with 

HUD’s mission. 

The Strategic Plan, the initial step in this 

performance management cycle, defines the 

strategic goals and objectives for the Department’s 

work and establishes a vision of what HUD seeks 

to achieve during the next six years. The 

Government Performance and Results Act 

requires agencies to submit a new Strategic Plan to 

Congress at least once every three years. HUD 

last submitted a Strategic Plan in March 2003. 

Each year HUD also develops and submits an 

Annual Performance Plan (APP) to Congress in 

conjunction with the President’s Budget. The 

APP identifies the performance goals and results 

HUD intends to accomplish during the year with

the resources in its budget request. The APP also 

establishes the specific performance measures that 

will help HUD gauge progress in achieving the 

strategic goals and objectives articulated in the 

Strategic Plan. The FY 2007 APP will be 

submitted to Congress in early 2006. 

After Congress acts on HUD’s budget proposal 

for a fiscal year, all HUD organizations, both in 

Headquarters and the field, establish annual 

Management Plans to ensure that day-to-day 

management processes and program operations 

support the achievement of the measurable results 

contained in the APP. The field office plans 

identify the coordinated strategies and actions 

each field office will implement to respond to 

local needs and to contribute to the achievement 

of the goals and objectives articulated in the APP. 

In addition to the internal HUD Management

Plans each year, the President prepares a 

Management Agenda with HUD that includes 

specific action items. Progress in achieving 

 

HUD’s Strategic Planning and

Performance Management Cycle

Strategic Plan 

Annual Performance & 

Accountability Report 

Management Plans & 

Program Delivery

Systems

Annual Budget

Performance Plan

Results 

Review of

Key Indicators 

HUD Strategic Plan 71
Appendix

milestones in both the internal Management Plans 

and the PMA is tracked on an ongoing basis and 

reviewed at executive management meetings held 

monthly by the Deputy Secretary with principal 

staff. These progress reviews and the results of 

ongoing oversight of field operations provide 

essential information for appropriate corrective 

actions and policy adjustments to ensure that 

HUD achieves its performance goals. 

At the end of each fiscal year, HUD prepares a 

Performance and Accountability Report (PAR) 

that reports on HUD’s performance in the prior 

fiscal year and the extent to which HUD achieved 

the goals of the APP. The FY 2006 PAR will be 

submitted to Congress in November 2006. 

The annual process of planning, budgeting,

managing, and reporting on performance will go 

through several cycles during the life of this 

Strategic Plan. The longer Strategic Plan cycle is 

completed when information about results, 

including program evaluations, is combined with 

stakeholder input to inform and shape 

departmental strategies for a revision of the 

Strategic Plan. 

How HUD Developed this Strategic Plan 

HUD began the active development of this 

Strategic Plan in 2005 with an internal review and 

brainstorming process under the leadership and 

direction from the Secretary and the principal 

staff. As in the Department’s previous efforts, 

internal discussions were followed by a period of 

structured consultation. HUD informed 

congressional staff and the Office of Management

and Budget about the Department’s plans for 

updating the Strategic Plan. 

In a related and concurrent effort, the Office of 

Community Planning and Development 

conducted five regional sessions during the 

summer of 2005 to obtain public comment on the 

proposed performance measurement system

(published in the Federal Register, June 10, 2005). 

These sessions were held in San Francisco, 

Philadelphia, Detroit, Atlanta, and Austin. The 

1,100 attendees were primarily CPD formula 

program grantees and nonprofit organizations that

use these grant funds. Attendees discussed the 

need to have performance measures that captured 

and documented the breath and depth of their 

work, spanning community and economic

development, housing, and homelessness efforts. 

As a result of this process, CPD designed a 

performance system to address the feedback they 

received, and also brought the feedback to bear on 

HUD’s strategic plan development. 

During December 2005, HUD developed a draft 

strategic framework, which defines the 

Department’s mission, strategic goals, and 

strategic objectives. Staff from PD&R and the 

CFO office facilitated an intensive series of 

meetings with senior officials from every program 

office to propose, discuss, and debate potential 

goals and objectives. Revisions were limited to 

the strategic objectives, reflecting strong 

continuity in the Department’s goals and 

strategies. 

HUD circulated the draft strategic framework to

an extensive list of stakeholders, who also were 

invited to a National Stakeholders Meeting in 

January 2006. This consultation meeting took 

place at HUD headquarters in Washington, DC, 

as well as at HUD field offices that were 

connected via satellite broadcast. Participating 

stakeholders totaled about 340. The numerous 

comments and suggestions they provided were 

documented by contract staff. During the same 

period, HUD’s strategic planning staff met with 

congressional staff to obtain their views. 

In response to concerns expressed by stakeholders 

at the National Stakeholders Meeting and 

congressional consultation meetings, HUD made 

a number of additional revisions to the strategic 

objectives. Most of the changes strengthened the 

wording of strategic objectives, but the most 

substantive change was the addition of 

Objective C1. The new objective reflects the 

evolving role that Congress outlined for HUD 

through a supplemental appropriation addressing 

the Gulf Coast recovery needs arising from

Hurricanes Katrina and Rita. This congressional 

action occurred after the first phase of HUD’s 

internal strategic planning was substantially 

completed. 

The draft Strategic Plan was posted on HUD.gov

for a 30-day public comment period and reviewed 

by the Office of Management and Budget. 

Approximately 200 pages of emailed comments 

were received, summarized, and analyzed by 

HUD’s strategic planning staff and program area 

staff. 

During and following the public comment period, 

HUD staff focused on developing performance 

indicators and goals that reflect a balance of each 

program’s statutory authority, constituent input, 

planned reforms, and measurable results. At each 

step along the way, principal staff provided

72 HUD Strategic Plan
Appendix 

valuable input to what will be the guiding 

document for all program offices for years to 

come. 

Two strategic objectives were further modified in 

response to stakeholder comments. Numerous 

additional improvements, clarifications, and 

changes in emphasis appear in this document as a 

result of this consultation and feedback process 

with HUD’s partners. The stakeholder comments 

also will be considered in other departmental 

processes, such as budget development and 

program management decisionmaking. 

Perspective and Outlook 

An essential element of a strategic overview of 

HUD’s role is an assessment of major economic, 

social, demographic, or other trends that have 

potential to affect achievement of the 

Department’s goals. Several aspects of the

nation’s economy and demography are worthy of

note because of their current or potential impact 

on HUD operations. 

Economy

The ability of families to afford their housing 

costs is strongly influenced by the economy, and 

in particular, by interest rates and unemployment

levels. 

In recent years, the employment situation has 

been steadily improving. The Bureau of Labor 

Statistics reports that by December 2005, 

3.6 million jobs had been added to non-farm 

payrolls since the business cycle trough in 

November 2001, and households reported an 

increase of 6.6 million employed persons over the 

same period. As a result, the unemployment rate 

was at a relatively low level of 5.1 percent during 

2005. 

Interest rates continue to remain near the low 

levels that have stimulated demand for 

homeownership in recent years. Low mortgage

interest rates help reduce the total cost of 

homeownership, making it more affordable for 

more families. To the extent that interest rates 

increase, growth in the homeownership rate is 

likely to slow.

Housing Markets 

During 2005, the volume of sales of new homes 

and existing homes again broke records. Several 

years of rapid appreciation of owner-occupied 

housing, combined with low mortgage interest

rates, have stimulated great demand for home 

purchases. 

Along with this activity has come innovation in 

the variety, and in some cases the risks, of 

mortgage products being offered. Risks are not 

fully known with respect either to potential 

stagnation or depreciation of home prices or to 

mortgage default. Housing counseling has 

emerged as an increasingly important tool for 

ensuring that homebuyers make wise choices. 

On a national basis, rental vacancy rates remained 

at or near record high levels of 10 percent during 

2005. Such high vacancy rates generally improve 

affordability of rents. Even so, affordable housing 

is less available in some markets, for a variety of 

reasons, including the additional burden of

compliance with state and local regulations. HUD 

research using the most recent available data 

shows that the incidence of worst case needs for 

affordable housing remains stable at about 

4.9 percent of U.S. households. These are very 

low-income renters who pay more than 50 percent 

of their incomes for rent or whose units have 

severe physical inadequacies. 

Demographics 

The U.S. Census Bureau projects that the elderly 

population (aged 65 and over) will increase by 

5.2 million between 2000 and 2010, and by an 

additional 14.4 million by 2020. This aging 

population will increase the demand for housing 

that is appropriate for elderly families, with special 

need for additional assisted living opportunities 

later on. 

There is a growing population of Hispanic

households in the United States, including many

new immigrants. The ability of these households 

to access mainstream housing resources may be 

constrained by language barriers, discrimination, 

and, in some cases, lack of credit history. 

Disasters 

In recent years, the nation has been reminded of

the potential for natural or other disasters to cause 

acute problems related to housing and urban 

development. The existing national scope of 

HUD’s programs gives them flexibility and 

HUD Strategic Plan 73
Appendix

capacity to respond to disaster-related needs in 

support of policy priorities without requiring 

major increases in administrative complexity and 

scale. 

Devolution and Local Control 

The Quality Housing and Work Responsibility Act 

of 1998 continued the trend toward devolution of 

responsibility for HUD’s housing programs, 

delegating more authority to state and local 

housing agencies. HUD’s ability to achieve its 

goals is heavily contingent on the performance of 

its partners. 

Local jurisdictions have local authority to create 

building codes and zoning requirements. Through 

this authority, jurisdictions often create regulatory 

barriers that prevent the development of 

affordable housing or lead to increased costs. 

Gulf Coast Disaster Response 

This section offers a brief background summary

of how HUD responded to Hurricanes Katrina, 

Rita, and Wilma. 

Coordinated Response to Disaster 

The key to effective response to emergencies is 

preparation and coordination. HUD established a 

working group in preparation for Hurricane 

Katrina’s landfall, and in response to the 

devastation, rapidly scaled it up to a new 

Hurricane Recovery and Response Center

(HRRC) – an emergency management center 

staffed with professionals from every program 

office. The HRRC has since become the HUD 

Assistance and Recovery Team (HART), 

comprising Senior Advisors to the Secretary and 

Deputy Secretary on matters related to the

Department’s hurricane response. 

HART continues to fulfill several vital roles in the 

federal disaster response: coordinating the 

response efforts of program offices, deploying 

HUD employees for disaster recovery work 

through FEMA mission assignments, providing 

timely information to FEMA about HUD housing

resources available for evacuees, and updating

interagency agreements with FEMA. 

HUD’s response efforts will evolve to meet any 

new responsibility assigned to the agency. Yet, the 

success of the HART “command center” 

approach offers valuable lessons for future

disasters, and sets HUD on a path of better 

preparedness and coordination, as demonstrated 

by activities highlighted throughout this Strategic 

Plan. 

Program office contributions to 

disaster recovery 

The response of HUD program offices to the 

Gulf Coast hurricanes illustrates the range of 

activities necessary to fulfill HUD’s mission in 

such emergencies. 

Office of Community Planning and 

Development. CPD programs – especially 

CDBG and HOME – are useful for addressing 

both the immediate and long-term recovery needs 

that arise from natural disasters. In the wake of 

disasters, CPD uses its waiver authority to 

streamline grant programs so grantees can 

reprogram their existing HUD funds for disaster 

relief. For example, waivers for the Gulf Coast 

disaster provided greater flexibility in the use of 

HOME and American Dream Downpayment 

Initiative funds to help low-income families 

receive tenant-based rental assistance, and 

rehabilitate and buy homes. CPD also is making 

the supplemental CDBG appropriation available 

swiftly for recovery efforts consistent with the 

comprehensive reconstruction plans each of the 

five states is developing. 

Office of Housing. FHA moved quickly to 

prevent stricken homeowners from experiencing 

needless default and foreclosure because of the 

hurricanes (see Goal A). FHA also identified 

approximately 42,000 HUD-affiliated multifamily 

units available nationwide as a resource for 

housing evacuees, and waived a number of

program rules to ensure that assistance would be 

timely. FHA is assisting numerous mortgagors of 

damaged multifamily properties in developing 

long-term restoration plans, including identifying 

funding sources, and similarly is consulting with 

hospital owners about the availability of FHA 

74 HUD Strategic Plan
Appendix 

mortgage insurance on the financing they need to 

repair or rebuild hospitals. 

Office of Public and Indian Housing. PIH 

continues to administer the Katrina Disaster 

Housing Assistance Program (discussed under 

Goal B) in coordination with FEMA, and soon 

after the hurricane identified 39,000 vacant public 

housing units and available vouchers nationwide 

that were available for evacuees. PIH assisted the 

Housing Authority of New Orleans in quickly 

setting up headquarters operations in Houston

and a satellite office in Dallas, enabling it to begin 

assisted residents within a week, and also worked 

closely with the Houston Housing Authority. 

HUD made available capital funds to repair and 

replace existing public housing that was directly

affected by Hurricane Katrina. The Office of 

Native American Programs consulted with every 

tribe affected by Hurricane Katrina and made 

Imminent Threat funds available to the tribes. 

Office of Fair Housing and Equal 

Opportunity. FHEO is working to ensure that 

housing discrimination does not become a barrier 

to repopulation of hurricane-affected areas. 

FHEO is providing training on fair housing issues 

in the disaster area both directly and through 

partner organizations. Immediately following the 

disaster, FHEO staff obtained immediate relief for 

evacuees facing discrimination before there was a 

need to file formal complaints. HUD also worked 

with FEMA to create new design specifications 

for fully accessible manufactured housing to 

ensure that temporary housing was available for 

people with disabilities. 

Support offices. HUD’s support offices also play 

important roles in a coordinated response. The 

Center for Faith-based and Community Initiatives 

is ensuring effective exchange of information 

about successful local public-private partnerships 

to assist evacuees. The Office of Policy 

Development and Research serves as a 

clearinghouse for housing and geographic data. 

As a federal authority on housing markets, PD&R

has provided analytical support for estimating

damage, developed payment standards for 

emergency rental vouchers, assessed housing 

availability nationwide, and identified strategies to 

accelerate the construction of housing in impacted 

areas. 

HUD Strategic Plan 75
Appendix

Key Statutes 

The Department of Housing and Urban 

Development is the Executive Branch Agency, 

established by Congress, whose chief 

responsibility is the implementation and 

enforcement of federal housing and community 

development statutes passed by Congress. 

Through the years, Congress has passed legislation 

that not only created the programs that HUD is 

responsible for administering, but also established 

HUD’s overall goals and mission. While there 

have been a multitude of programs established by 

Congress over the years, the goals and mission of 

the Department have generally focused on the 

need for innovative and comprehensive solutions 

to housing and community development 

problems, an emphasis on serving to

disadvantaged individuals and distressed 

neighborhoods, and a reliance on partnerships as a 

means to achieve results.

The following is a list of key statutes that define 

HUD’s mission: 

Key HUD-Related Statutes 

1934 National Housing Act: Created the 

Federal Housing Administration “to 

encourage improvements in housing 

standards and conditions (and) to provide 

a system of mutual mortgage insurance.” 

1937 United States Housing Act of 1937: 

Created the public housing program, 

through which local public housing 

authorities were given responsibility for 

constructing and operating housing 

projects, with program direction and 

financial support provided by the United 

States Housing Authority. 

1949 Housing Act of 1949: Established grant 

programs to assist state and local 

governments with community planning 

and urban renewal. It also established the 

national “...goal of a decent home and a 

suitable living environment for every 

American family.” 

1959 Housing Act of 1959: Established the 

Section 202 Supportive Housing for the 

Elderly program and FHA Mortgage 

Insurance for Nursing Homes program. 

1965 Department of Housing and Urban 

Development Act: Created the 

Department in order “...to achieve the 

best administration of the principal 

programs of the federal government

which provide assistance for housing and 

for the development of the Nation’s 

communities, to assist the President in

achieving maximum coordination of the 

various federal activities which have a 

major effect upon urban community, 

suburban, or metropolitan 

development...and to provide for full 

and appropriate consideration, at the 

national level, of the needs and interests 

of the Nation’s communities and of the 

people who live and work in them.” 

1968 Housing and Urban Development 

Act: Established rental and

homeownership programs for lower 

income families and created, within

HUD, the Government National

Mortgage Association (Ginnie Mae). 

1968 Civil Rights Act: Prohibited 

discrimination in housing and gave HUD 

responsibility for administering those 

provisions. 

1971 Lead-Based Paint Poisoning 

Prevention Act: Required the Secretary 

to establish procedures to eliminate as far 

as practicable the hazards of lead-based 

paint poisoning. 

1973 Rehabilitation Act of 1973: Section 504 

of this act prohibits discrimination on the 

basis of disability in any program or 

activity that receives financial assistance 

from any federal agency. 

1974 Housing and Community 

Development Act of 1974: Created 

Community Development Block Grants 

for state and local governments “to 

promote the development of viable urban 

communities” and also established 

Section 8 rent subsidies for low-income 

families.

76 HUD Strategic Plan
Appendix 

1974 Manufactured Housing Construction 

and Safety Standards Act of 1974: 

Provided for pre-emptive national 

construction and safety standards for 

design and construction of manufactured

homes. 

1974 Real Estate Settlement Procedures 

Act of 1974 (RESPA): Required that the 

costs of real estate settlement services be 

disclosed to the consumer and forbade 

the payment of referral fees, kickbacks, 

splits of fees, and unearned fees for these 

services. RESPA governs almost every 

individual residential mortgage 

transaction involving a mortgage loan in 

the United States. 

1983 Housing and Urban-Rural Recovery 

Act: Created the housing voucher 

program as an addition to Section 8 rent 

certificates and repealed authority to 

make new commitments under the 

Section 8 project-based program. 

1987-

1988 

Stewart B. McKinney Homeless 

Assistance Act and the Stewart B. 

McKinney Homeless Assistance 

Amendments Act of 1988: Created new

programs to assist the homeless, 

including the Continuum of Care 

programs: Supportive Housing, Shelter 

Plus Care, and Single Room Occupancy, 

as well as Emergency Shelter Grants. 

1988 Fair Housing Amendments Act: 

Expanded the scope of fair housing 

provisions of the 1968 Civil Rights Act 

and gave HUD additional enforcement 

responsibilities. 

1988 Housing and Community 

Development Act of 1988: Made 

housing vouchers a permanent program;

allowed sale of public housing to resident 

management corporations, giving 

residents the ability to manage and buy 

their developments; and authorized 

enterprise zones. 

1989 Department of Housing and Urban 

Development Reform Act: Enacted 

over 50 legislative reforms to help 

ensure ethical, financial, and

management integrity. 

1990 National Affordable Housing Act of 

1990 (a.k.a. Cranston-Gonzalez Act): 

Created programs to empower and 

help the most needy through a variety 

of economic incentives, low-income 

homeownership opportunities, and 

other housing and economic

development programs. Created the 

HOME Investment Partnership, 

Housing Opportunities for Persons 

with AIDS (HOPWA) and Shelter Plus 

Care programs. Also established the 

Section 811 Supportive Housing for 

Persons with Disabilities program and 

the HOPE programs. 

1992 Housing and Community 

Development Act of 1992: 

Established the Youthbuild and Low 

Income Housing Preservation and 

Homeownership programs. Also 

created a comprehensive lead paint 

hazards reduction program, HUD risksharing programs with housing finance 

agencies and GSEs, and the Indian 

housing loan guarantee program. 

1992 Federal Housing Enterprises 

Financial Safety and Soundness Act: 

Strengthened HUD’s regulatory 

authority over Fannie Mae and Freddie 

Mac, the two housing governmentsponsored enterprises regulated by 

HUD, to improve access to affordable 

housing for very low-, low-, and 

moderate-income families, and families 

living in underserved areas. The Act 

established the framework by which 

HUD establishes the level of three 

housing goals that the GSEs are 

required to achieve annually. The Act 

also expanded HUD’s new program 

approval and general regulatory 

authority over the GSEs. In addition, 

the Act established the Office of 

Federal Housing Enterprise Oversight 

as an independent office within HUD 

to examine the safety and soundness of 

the GSEs. 

1992 Lead-Based Paint Hazard 

Reduction Act: Addressed the need 

to control exposure of children under 

the age of 6 to lead-based paint 

hazards, such as deteriorated lead paint, 

lead dust, and lead in soil, in federally 

assisted and federally owned housing. 

HUD Strategic Plan 77
Appendix

1994 Multifamily Housing Property 

Disposition Reform Act of 1994: 

Amended disposition requirements for 

multifamily mortgages. Created the 

Economic Development Initiative 

program.

1996 Native American Housing 

Assistance and Self-Determination 

Act: Established Indian housing block 

grant and loan guarantee programs. 

1997 Multifamily Assisted Housing 

Reform and Affordability Act of 

1997: Established the Mark-to-Market

program (M2M) and the Office of

Multifamily Housing Assistance 

Restructuring (OMHAR) through the 

end of FY 2001. Under this program, 

individual projects in HUD’s 

multifamily portfolio of insured Section 

8 housing projects are restructured by 

resetting rents to market levels and 

reducing mortgage debt, if necessary, to 

permit a positive cash flow. In 2001, 

Congress extended M2M and OMHAR 

through 2004.

1998 Quality Housing and Work 

Responsibility Act of 1998 (a.k.a. 

Public Housing Reform Act): Made 

significant changes in the public 

housing and Section 8 tenant-based 

programs to deregulate highperforming public housing agencies, 

promote mixed-income communities, 

establish targets for allocation of units 

and vouchers, and create incentives for 

residents to become self-sufficient. 

1999 Preserving Affordable Housing for 

Senior Citizens and Families into 

the 21st Century Act: Enabled HUD 

to develop a broad range of housing 

options to meet the changing housing 

needs of senior citizens, and authorized 

Mark-up-to-Market, which protects 

low-income renters by minimizing the 

number of owners that choose to opt 

out of the project-based housing 

assistance program.

2000 American Homeownership and 

Economic Opportunity Act: 

Expanded homeownership 

opportunities for low-income

Americans, including the disabled, 

senior citizens, and Native Americans.

2000 Manufactured Housing 

Improvement Act of 2000: 

Established a federal advisory 

committee to recommend revisions to 

HUD’s construction and safety 

standards and regulations for 

manufactured homes, and to propose 

model installation standards. Also 

requires HUD to establish national 

installation and dispute resolution 

programs to operate in those states that 

do not have their own programs. 

2000 Community Renewal and New 

Markets Initiative of 2000: 

Encouraged economic development in 

low- and moderate-income rural and 

urban communities. Created the New 

Markets Tax Credit and the Renewal 

Communities program; expanded the 

Empowerment Zones program; and 

increased the supply of Low Income 

Housing Tax Credits and Private 

Activity Bonds. 

2003 American Dream Downpayment 

Act: Authorized up to $200 million 

annually for the American Dream 

Downpayment Initiative to provide 

downpayment assistance and home 

repair for low- income families to 

promote and increase homeownership.

2005 Gulf Opportunity Zone Act: 

Promoted reinvestment by businesses 

affected by Hurricane Katrina through 

tax provisions for business investment, 

hiring, and provision of employee 

housing. 

2005 Department of Defense 

Appropriations Act for FY 2006: 

Appropriated $11.5 billion for the 

Community Development Fund to 

support disaster relief, long-term 

recovery, and restoration of 

infrastructure in the Gulf Coast region

affected by the 2005 hurricanes.

78 HUD Strategic Plan