	Introduction

The federal government has played a role in subsidizing housing construction and providing homeownership and rental assistance for lower-income households since the 1930s. The modern housing assistance programs include both relatively flexible grants to state and local governments to serve homeless people, build affordable housing, provide assistance to first-time homebuyers, and promote community development; and more structured, direct assistance programs that provide low-cost apartments and rental vouchers to poor families, administered through local public, quasi-public, and private intermediaries. History and Evolution of Federal Housing Assistance Policy

		The Beginning of Federal Housing Assistance: FHA and Public Housing

The federal government's first major housing policy was formulated in response to trouble in the mortgage market resulting from the Great Depression. The act created the Federal Housing Administration (FHA). The act (1) established a federal urban redevelopment and slum clearance program, authorizing federal loans of $1 billion over a five-year period to help local redevelopment agencies acquire slum properties and assemble sites for redevelopment; (2) reactivated the public housing program for low-income families (which had been on hold during World War II), authorizing subsidies to local housing authorities sufficient to build 810,000 units over six years; (3) expanded the FHA's mortgage insurance program to promote home building and homeownership; (4) created within the U.S. Department of Agriculture a program of financial assistance and subsidies to improve housing conditions on farms and in rural areas; and (5) authorized federal grants for research, primarily to improve the productivity of the housing industry. Another development during the 1960s was an income-based rent structure. 101-625 ) authorized the HOME Investment Partnerships program. Today's Housing Assistance Programs

Today's system for providing housing assistance to low-income families is made up of programs that fall into three main categories: rental housing assistance, federal assistance to state and local governments, and housing finance and homeownership assistance. Rental Housing Assistance

			Section 8 Housing Choice Vouchers

Section 8 Housing Choice Vouchers (vouchers) are a form of tenant-based rental assistance funded by the federal government, administered locally by quasi-governmental PHAs, and provided to private landlords on behalf of low-income families. Section 202 Supportive Housing for the Elderly Program and the Section 811 Supportive Housing for Persons with Disabilities Program

Through the Section 202 Supportive Housing for the Elderly program, HUD provides funds to nonprofit organizations that in turn build rental properties for low-income elderly households (those where one or more persons are age 62 or older). The tax credits are disbursed to state housing finance agencies (HFAs) based on population. Community Development Block Grants

The Community Development Block Grant (CDBG) program was enacted as part of the Housing and Community Development Act of 1974 ( P.L. 78-346) established the home loan guaranty program, which is administered by the Department of Veterans Affairs (VA). One of the largest tax benefits for homeowners is the mortgage interest deduction. It is not targeted to lower-income households. Issues and Trends in Housing Assistance Programs

		Incidence of Housing Problems

When the federal housing assistance programs began in the 1930s, the nation was considered to be ill-housed. Housing is considered "affordable" if it costs no more than 30% of a household's income. First, state and local governments have taken on an increased role in providing affordable housing and establishing priorities in their communities. The shift from project-based assistance to tenant-based assistance has several implications for families. In recent decades, federal efforts related to homeownership have also included a focus on reducing disparities in homeownership rates.
The federal government has been involved in providing housing assistance to lower-income households since the 1930s. In the beginning, the federal government played a role in supporting the mortgage market (through establishment of the Federal Housing Administration [FHA] and the government-sponsored enterprises) and in promoting construction of low-rent public housing for lower-income families through local public housing authorities (PHAs). Over time, the federal government has shifted away from providing construction-based subsidies toward providing rental subsidies, and private developers and property owners have been playing a larger role.
Today's federal housing assistance programs fall into three main categories: rental housing assistance, assistance to state and local governments, and assistance for homeowners. Most of these programs are administered by the Department of Housing and Urban Development (HUD). Current housing assistance programs include Section 8 vouchers and project-based rental assistance, public housing, housing for the elderly (Section 202), housing for persons with disabilities (Section 811), rural rental assistance (the United States Department of Agriculture's Section 521 program), Community Development Block Grants (CDBG), HOME Investment Partnerships Block Grants, Low-Income Housing Tax Credits (LIHTC), homeless assistance programs, Federal Housing Authority (FHA) and Department of Veterans Affairs mortgage insurance, and the mortgage interest deduction in the tax code.
Most federal housing assistance programs are aimed at making housing affordable for low-income families. Affordability—defined as housing that costs no more than 30% of a family's income—is considered to be the largest housing problem today. Rental assistance programs, which are the largest source of direct housing assistance for low-income families, all allow families to pay affordable, income-based rents; however, different forms of assistance target different types of households, including the elderly, persons with disabilities, and families with children. Several trends in federal housing policy have emerged in recent decades. As the focus of federal housing assistance has shifted away from construction-based subsidies to rental assistance, block grants, and LIHTC, state and local governments have had greater access to federal resources to fund local housing and community development priorities. This shift in federal funding has also led affordable housing developers to pursue mixed financing: the use of multiple streams of federal, state, and local funding, or private financing. In the past, lagging homeownership rates among low-income and minority households have prompted several Presidents to promote homeownership-based housing policies. However, given the severe downturn in U.S. housing markets that began in 2007 and the resulting high foreclosure rate, it is unclear to what degree federal policy will continue to focus on increasing access to homeownership.