FY 2013 Annual Performance Report FY 2015 Annual Performance Plan U.S. Department of Housing and Urban Development Our mission is to create strong, sustainable, inclusive communities July 2014 and quality, affordable homes for all. This combined report and plan is intended to provide readers with a clear sense of HUD’s progress toward hud.gov achieving its mission over the past @HUDgov year, as well as its plan for making facebook.com/hud progress in Fiscal Year 2015. youtube.com/HUDchannel FY 2013 Annual Performance Report FY 2015 Annual Performance Plan U.S. Department of Housing and Urban Development July 2014 About This Report This Fiscal Year (FY) 2013 Annual Performance Report (APR) and FY 2015 Annual Performance Plan (APP) for the U.S. Department of Housing and Urban Development (HUD) provides detailed performance-related information to the President, the Congress, and the American people. The report allows readers to assess HUD’s FY 2013 performance, revisions to FY 2014 goals, and plans for FY 2015 relative to its mission and stewardship of public resources. This report consists of several important sections: Agency and Mission This section contains HUD’s mission statements, its vision, organizational structure, and scope of responsibilities, as well as an introductory message from the HUD Secretary, Shaun Donovan, in which he highlights key FY 2013 program accomplishments and policy priorities going forward. Strategic Goals and Strategic Objectives Figure 1 This sample strategic flow demonstrates how the strategic This section contains HUD’s strategic framework, as goals, strategic objectives, performance goals, and Agency Priority established in the new HUD Strategic Plan FY 2014- Goals should cascade from the Department's mission. 2018. It is comprised of four overarching strategic goals and 12 strategic objectives which help frame HUD’s discussion of its performance targets and associated priorities. The majority of this APP-APR is organized by strategic objective. Strategic objectives are intended to reflect the outcome or management impact an agency is trying to achieve. Each objective will be tracked annually through a specific set of performance indicators. In addition, HUD’s strategic framework contains eight management objectives that are intended to improve departmental operations. Please note that Agency Priority Goals (or APGs) are denoted by a  throughout this document. Each agency is responsible for identifying a limited number of performance goals that are high priorities over a two-year period. These APGs support improvements in near-term outcomes, customer service, or efficiencies, and advance progress toward longer-term, outcome-focused strategic goals and objectives in an agency’s Strategic Plan. Thus, while strategic objectives are evaluated annually and focus on longer-term performance goals, Agency Priority Goals are evaluated quarterly and focus on near-term results. For each strategic goal, we have included its associated strategic objectives, an overview of the problem(s) HUD is attempting to address through these objectives, strategies for achieving the objectives, goal leaders, major milestones, and performance indicators to track our progress. HUD’s APGs were established in FY 2012 to cover a two-year performance period (FY 2012-2013). Thus, in this consolidated FY 2013 APR and FY 2015 APP, we present to readers a synopsis of both final outcomes on the FY 2012-2013 APGs, and plans and targets for the FY 2014-2105 APGs. For most metrics, HUD has committed targets for FY14 and FY15 which will enable us to track our performance in the next two years. For some metrics, we are still gathering data to establish baselines and preparing to set targets in future years. These metrics are indicated with the phrases “Establish Baseline” and “Target TBD” in the relevant tables. A third category of metrics, marked as “Tracking Only”, provide information about program operations or external conditions but will not have targets. For these metrics, targets would be difficult to establish, would not provide meaningful indications of agency performance expectations, and/or could create unintended incentives for program staff and our partners. Additional Information This final section includes required supporting information, including a description of HUD’s data-driven management review process, a summary of both completed and upcoming evaluations and research to inform progress on our strategic goals, and a section on data validation and verification. Table of Contents About This Report ....................................................................................................................................................................... i Introductory Message from the Secretary ................................................................................................................................ 2 Introduction ................................................................................................................................................................................ 4 Strategic Goal 1: Strengthen the Nation’s Housing Market to Bolster the Economy and Protect Consumers ............... 13 Strategic Objective 1A: Housing Market ............................................................................................................... 14 Strategic Objective 1B: Credit Access .................................................................................................................. 16 Strategic Objective 1C: FHA’s Financial Health ................................................................................................... 19 Strategic Goal 2: Meet the Need for Quality Affordable Rental Homes ............................................................................... 29 Strategic Objective 2A: Rental Investment ........................................................................................................... 30 Strategic Objective 2B: Rental Alignment ............................................................................................................ 32 Strategic Goal 3: Use housing as a platform for improving quality of life .......................................................................... 40 Strategic Objective 3A: Homelessness ................................................................................................................ 41 Strategic Objective 3B: Economic Prosperity ....................................................................................................... 50 Strategic Objective 3C: Health and Housing Stability .......................................................................................... 53 Goal 4: Build Strong, Resilient, and Inclusive Communities ............................................................................................... 56 Strategic Objective 4A: Fair Housing ................................................................................................................... 57 Strategic Objective 4B: Green and Healthy Homes ............................................................................................. 59 Strategic Objective 4C: Disaster Resilience ......................................................................................................... 66 Strategic Objective 4D: Community Development ............................................................................................... 68 Achieving Operational Excellence: Management Challenges and Objectives .................................................................. 71 Management Objective: Acquisitions ................................................................................................................... 72 Management Objective: Departmental Clearance ............................................................................................... 75 Management Objective: Equal Employment Opportunity .................................................................................... 77 Management Objective: Financial Management .................................................................................................. 79 Management Objective: Grants Management ...................................................................................................... 81 Management Objective: Human Capital ............................................................................................................... 84 Management Objective: Information Management .............................................................................................. 86 Management Objective: Organizational Structure................................................................................................ 88 Section 3: Additional Information ........................................................................................................................................... 90 Evaluating Our Strategies and Measuring Our Progress ...................................................................................... 90 Data Sources, Limitations and Advantages, and Validation ................................................................................. 97 Section 1 Agency and Mission Introductory Message from the Secretary It is a pleasure to present the U.S. Department of Housing and Urban Development’s Fiscal Year 2013 Annual Performance Report (APR) and Fiscal Year 2015 Annual Performance Plan (APP). It has been another year of progress at HUD. As this report details, our work to expand opportunities for families and communities is making a profound difference on the ground. In Fiscal Year 2013, we assisted 493,985 families at risk of foreclosure. Working with our federal partners, through the Opening Doors plan, the number of persons experiencing homelessness dropped 4 percent since 2012. In total, HUD’s efforts has helped generate new hope and progress in communities across the country—critically important work as our nation fights its way back from an historic economic crisis. As a result, the housing market has made a comeback with sales, construction starts, home equity and other important measures all trending in the right direction. However, our work is not finished which is why this FY 2015 Annual Performance Plan outlines ambitious goals that will build on the gains already made. Among our priorities, we will continue to strengthen the Federal Housing Administration to preserve its decades-long mission of providing access to credit for families—of all income levels—who are ready to buy. We will also continue to push for housing finance reform to strengthen the housing market, give responsible households a fair chance to purchase a home and ensure a crisis of this magnitude never happens again. To give more families access to quality housing options, HUD is working with partners to preserve and produce affordable units. With our clean energy initiatives, we are also bringing more economic and environmental benefits to communities. Finally, through efforts like Choice Neighborhoods and Promise Zones, in partnership with leaders at the federal and local levels, we are using a comprehensive approach to revitalize areas that have been in distress for far too long. HUD has put forth these and the other initiatives outlined in this document with one goal in mind: building ladders of opportunity that reach all Americans. From children born into poverty, to veterans sleeping on the street, to seniors struggling to retire with comfort and dignity, HUD is committed to giving every person a fair chance to lift themselves up and better their lives. Ambitious goals? Yes, but we will not rest until we achieve them. We look forward to working with a wide-variety of partners on these efforts. Together, we can make this opportunity agenda a reality for generations to come. Lastly, the 2015 Cuts, Consolidations, and Savings (CCS) volume of the President’s Budget identifies lower- priority program activities, where applicable, as required under the GPRA Modernization Act, 31 U.S.C. 1115(b)(10). The public can access the volume at: http://www.whitehouse.gov/omb/budget. Shaun Donovan Secretary HUD’s mission is to create strong, sustainable, inclusive communities and quality, affordable homes for all. Our vision is to improve lives and strengthen communities to deliver on America’s dreams. Therefore, we pledge—  For our Residents: We will improve lives by creating affordable homes in safe, healthy communities of opportunity, and by protecting the rights and affirming the values of a diverse society.  For our Partners: We will be a flexible, reliable problem solver and source of innovation.  For our Employees: We will be a great place to work, where employees are valued, mission driven, results oriented, innovative, and collaborative.  For the Public: We will be a good neighbor, building inclusive and sustainable communities that create value and investing public money responsibly to deliver results that matter. Introduction HUD requested for Fiscal Year 2015 $46.7 billion in gross discretionary budget authority. Eighty five percent of this amount is needed solely to renew rental assistance to almost 5 million residents of HUD-subsidized housing, including 2.16 million households assisted with Housing Choice Vouchers, and to renew existing HUD grants to homeless assistance programs. Detailed data on over 4.3 million tenants reveals that: 56 percent are elderly or disabled, 75 percent are extremely low-income (below 30 percent of area median income) and an additional 20 percent are very low-income (below 50 percent of area median income). The Department’s programs are critical to addressing the structural gap between household incomes and housing prices and the persistent unaffordability of housing. HUD plays an important role in making housing affordable through its investments in rental vouchers, public and assisted housing, and HUD-funded efforts led by states and localities. These efforts recognize that ensuring a stable supply of affordable housing in safe and quality communities enables low-income families and individuals to live healthy and productive lives. HUD is also a vehicle for advancing sustainable and inclusive growth patterns, communities of choice, energy efficiency, and community and economic development, and enforcing fair housing, strengthening the nation’s mortgage market, as well as reducing homelessness.  Learn more about HUD’s major organizational units and program offices.  Learn more about HUD’s regions and field offices. In carrying out its work on each of its strategic goals, HUD is committed to the following core values:  Accountability: We individually and collectively take responsibility for our performance and conduct.  Efficiency and Effectiveness: We will maximize our resources and efforts to continually improve the efficiency and effectiveness of our individual and collective performance. We strive for simplicity in our lines of authority and clarity in our lines of communication and to eliminate the red tape of bureaucracy. We support a productive work environment that balances high performance with the need for healthy personal and community life.  Fairness and Respect: We value each other, demonstrate compassion for those we serve, and treat others the way we would like to be treated. In respecting others, we conduct our work and administer our programs with fairness and justice, and with a commitment to civil rights, inclusion, and diversity.  Integrity: We approach each other, our stakeholders, and our work with honesty and the highest ethical standards  Teamwork: We work together in a spirit of camaraderie, trust, and collaboration. We believe that by contributing our individual strengths we can accomplish more together than separately. We are open-minded, ready to adapt, and willing to embrace innovation and creativity when confronting challenges in our workplace.