Bridging the Wealth Gap expands HUD’s work to help renters achieve financial well-being and homeownership through saving, credit building, and banking
HUD also announces $113 million to help HUD-assisted families increase earned income and improve financial stability
The U.S. Department of Housing and Urban Development (HUD) today released an agenda for economic justice that describes actions the department will take to help low-income renters build assets, along with a Notice of Funding Opportunity (NOFO) for $113 million for the Family Self-Sufficiency (FSS) program to help HUD-assisted families increase earned income and improve financial stability.
HUD’s agenda, Bridging the Wealth Gap: An Agenda for Economic Justice and Asset Building for Renters, focuses on asset building through increased savings, access to mainstream banking, and credit score improvement. By integrating asset building, anti-poverty policies can more directly facilitate economic stability for millions of Americans.
HUD Secretary Marcia L. Fudge announced Bridging the Wealth Gap and the $113 million funding opportunity during a conversation today with Axios on affordable and fair housing. Watch Secretary Fudge’s conversation with Axios here.
“With Bridging the Wealth Gap and this historic funding opportunity, we’re trying to make sure that every single person in this country can get their piece of the American dream,” said Secretary Fudge. “We’re looking at everything through a lens of equity and how we address systemic racism. We’re giving people who have historically been left out and underserved the resources to take a chance on their futures – to improve their credit, save resources for homeownership and other needs, and build wealth. That’s what this is all about.”
Unequal access to savings, positive credit history, and banking is a national problem that especially impacts renters and contributes to the racial wealth gap. This leaves renters with a minimal safety net to draw from in times of unemployment or unanticipated expenses such as car repair or medical emergencies. For example, less than half of American households have three months of savings. In 2019, the median cash savings of renter households was $1,400 compared to homeowner cash savings of $10,100.
Bridging the Wealth Gap focuses on helping low-income families safely access financial institutions and tools, which federal programs have not typically focused on. Bridging the Wealth Gap expands HUD’s work to build a critical continuum between federal rental assistance and homeownership programs by helping renters in HUD programs take the necessary first steps toward financial well-being and potential homeownership through saving, credit building, and banking. This agenda outlines the expansion of asset building practices for renters as a reparative tool for economic justice.
Specifically, Bridging the Wealth Gap announces the following current and future actions HUD is taking to promote asset building:
Current Asset Building Actions
- Launch the Asset Building Moving to Work (MTW) Demonstration
- Expand Asset Building Programs like the Family Self-Sufficiency Program
- Move from Annual to Triennial Income Recertification
- Support Renters with Credit and Financial Counseling
- Help HUD-Assisted Young Adults Save
- Partner with Other Federal Agencies and Stakeholders
Future Asset Building Actions
- Build Credit History Through Rent Reporting
- Integrate Financial Well-Being and Supportive Services into PHA Standard Practice
- Improve Homeownership Programs and Supports for HUD-Assisted Renters
The $113 million-dollar Family Self-Sufficiency (FSS) NOFO released today is a historic expansion of the program and central to HUD’s agenda for economic justice. The FSS program is the nation’s largest asset-building program for low-income families. The program currently serves around 65,000 participants at over 700 Public Housing Authorities (PHAs). FSS is a voluntary program that uses a combination of coordination of services and supports from community partners and an escrow savings account to help participants grow their earned income and savings and increase their financial well-being overall. Upon graduation from the program, the average family participating in FSS in 2021 had about $9,500 in savings.
On May 17, 2022, HUD published a new FSS rule, a critical step towards making FSS available to even more families. Among its changes, the rule permits any adult household member, not only the official head of household, to enroll in the program and eliminates regulations that were potential barriers to program graduation. The rule also eliminates a cap on savings that had been in place for higher-income families.
HUD anticipates being able to fund new FSS programs, in addition to renewals, through the $113 million funding opportunity announced today. For the first time, owners of Multifamily properties participating in the Section 8 assisted housing program are eligible to apply for funding under this grant opportunity. The FY22 FSS NOFO competition was posted to Grants.gov and HUD.gov on August 4, 2022, with an application deadline of October 3, 2022.