In an analysis by Democrat staff of the House Committee on Appropriations, there is a succinct description of the pressure on HUD’s FY24 appropriations bill. “Note, however, that these [House Republican] proposals to cut discretionary programs do not account for other economic and technical issues that will have a significant effect on the FY 2024 appropriations process. For example, a technical budgetary issue related to the Congressional Budget Office’s baseline projections for housing receipts will likely make discretionary appropriations for nondefense programs appear as much as $9 billion higher than they were last year. Coupling that technical issue with the real economic costs of increasing rents, initial estimates show that merely maintaining the same level of housing services through the Department of Housing and Urban Development will cost an additional $13 billion—or more—in FY 2024 on top of last year’s levels. As noted, none of the proposals to indiscriminately slash funding take this reality—or issues like this—into account.,” the paper says.

The projected $9 billion decline in revenue from the Federal Housing Administration (FHA) compared to the amount of FHA receipts that appropriators could rely on for the FY23 cycle is due in large part to rising interest rates, which in turn caused a dramatic slowdown of new and refinanced FHA-insured mortgages—and, therefore, the loss of those FHA mortgage insurance fees.