HAC News, August 29, 2024

HAC News: August 29, 2024

/in ,

TOP STORIES

Party platforms pledge to reduce housing costs

The Democratic and Republican party platforms both recognize the issues of housing affordability and homelessness, but address them differently. (This summary does not cover proposals from Mandate for Leadership: The Conservative Promise 2025, produced by Project 2025. The book has received media attention as indicative of policies a second Trump administration would endorse, but it is not an official party document.)

The Republican platform’s statement on housing affordability focuses on homeowners: “To help new home buyers, Republicans will reduce mortgage rates by slashing Inflation, open limited portions of Federal Lands to allow for new home construction, promote homeownership through Tax Incentives and support for first-time buyers, and cut unnecessary Regulations that raise housing costs.” The document also supports “Policies that help Seniors remain in their homes,” pledges to “compassionately address homelessness to restore order to our streets,” and asserts that “Republicans will end luxury housing and Taxpayer benefits for Illegal Immigrants and use those savings to shelter and treat homeless Veterans.” The document provides no further details on any of these topics. It makes no specific references to rural or Tribal concerns.

The Democratic platform offers more details, with sections on topics such as housing, poverty, Tribal Nations, racial equity, the climate crisis, and environmental justice. It refers repeatedly to rural and Tribal needs, including the Biden-Harris administration’s efforts in “tackling persistent poverty and building economic prosperity in rural communities.” There is one specific mention of housing and rural together: “We’ll keep working to expand other programs that reduce home heating, cooling, and water bills as well, especially in rural areas.” Specific housing pledges reflect the administration’s previously announced housing plan, including expanding rental assistance, providing tax credits and down payment assistance for homebuyers, expanding the Low-Income Housing Tax Credit, creating a homeownership tax credit, using the housing first model to address homelessness, and eliminating landlord junk fees, fair housing violations, and biased home appraisals. The platform mentions housing needs for people leaving the criminal justice system, domestic abuse survivors, Native Americans, residents of U.S. territories, migrants, veterans, and LGBTQI+ people. Many of its pledges are repeated in a Harris-Walz economic plan that calls for the construction of three million new housing units.

New rule for H-2A farmworkers halted in some states

New protections for farmworkers with H-2A visas, provided in a Department of Labor rule published in April, have been blocked by a preliminary injunction issued in a lawsuit that claims the rule illegally provided collective bargaining rights to these workers. The injunction applies only in the 17 states that joined with growers to file the suit. Court proceedings in the case will continue.

September is National Preparedness Month

FEMA explains that the observance is to raise awareness about the importance of preparing for disasters and emergencies that could happen at any time. HAC’s Rural Resilience website offers tools for readiness, response, and recovery, including HAC’s detailed guide, Prepare Your Organization to Respond and Recover from Natural and Man-Made Disasters.

September is National Recovery Month

This annual national observation is meant to highlight the resources needed to make recovery from substance use possible. The Substance Abuse and Mental Health Services Administration has a range of resources and events for the month.

RuralSTAT

Approximately 20% of rural households do not have broadband internet connections, compared to 11% in suburbs and 13% in cities: Source: HAC tabulations of the U.S. Census Bureau’s 2017-2021 American Community Survey.

REGULATIONS AND FEDERAL AGENCIES

Buy America expands to more HUD activities, new resources posted

HUD has added two new Build America, Buy America Act online resources for recipients of Community Planning and Development (CPD) funding such as HOME and CDBG. An optional Buy America Preference (BAP) checklist is intended to help determine whether the preference applies to a specific project. An optional BAP certification can be used by grantees to assist with subrecipient recordkeeping for procurement of BABA-compliant materials. HUD’s notice also reminds recipients that as of August 23, for FY24 CDBG and Recovery Housing Program grants, BAP will apply to specifically listed construction materials, in addition to iron and steel. For projects with other FY24 CPD funds, BAP will apply to iron and steel, construction materials, and manufactured products.

Fannie Mae and Freddie Mac announce tenant protections

Fannie Mae and Freddie Mac have jointly released a policy framework and FAQs for their implementation of new protections for tenants in properties with mortgages they back. As the Federal Housing Finance Agency announced in July, tenants will be entitled to 30-day notices before rent increases, 30-day notices on lease expirations, and five-day grace periods before imposing late fees on rental payments. The provisions will take effect for new loans signed after February 28, 2025.

Housing goals proposed for Fannie Mae and Freddie Mac

The Federal Housing Finance Agency has proposed housing goals for Fannie Mae and Freddie Mac for 2025 through 2027. The goals and subgoals cover a number of categories, including separate categories for single-family and multifamily mortgages on housing affordable to low-income and very low-income families. FHFA is also proposing new criteria for requiring a housing plan if Fannie Mae or Freddie Mac does not meet a goal. Comments are due October 28.

USDA explains upcoming changes to tenant calculations

USDA Rural Development has released an overview of tenant income and asset calculation changes due to the Housing Opportunity Through Modernization Act as well as a schedule for updates. This information adds to previous USDA guidance on the subject.

HUD adds flexibilities to vouchers for people with disabilities

Guidance from HUD creates new alternative requirements and waivers for Mainstream Vouchers, which provide housing assistance to people with disabilities between 18 and 62 years old who are transitioning out of institutional or other isolated settings, at serious risk of institutionalization, homeless, or at risk of becoming homeless. Changes include lengthening the initial search term, prohibiting residency preferences for these vouchers, and allowing PHAs to create separate waiting lists.

Quality control standards required for automated appraisals

A final rule will implement quality control standards for the use of automated valuation models (AVMs) by lenders, Fannie Mae, and Freddie Mac in appraising the values of homes that secure mortgage loans. The regulation was issued jointly by several agencies involved in regulating housing finance and will take effect on October 1, 2025. It requires adoption of policies, practices, procedures, and control systems to ensure that AVMs used to determine the value of mortgage collateral adhere to quality control standards designed to ensure a high level of confidence in the estimates produced by AVMs, protect against the manipulation of data, seek to avoid conflicts of interest, require random sample testing and reviews, and comply with applicable nondiscrimination laws.

USDA has new deputy for single-family housing

Cathy Glover, the long-time Deputy Administrator for Single-Family Housing at the Rural Housing Service, retired on July 31. Christine Mechtley now holds the position.

EVENTS

Multifamily housing transfer listening session set

USDA Rural Development will hold a September 5 online listening session on the multifamily housing transfer process. Stakeholders are invited to share their experiences with the transfer process, including the simple transfer pilot. Preregistration is required.

Discussion to explore rural migration and displacement

A virtual discussion on Exploring Migration and Displacement in Rural Communities is scheduled for September 10. Hosted by the Aspen Institute’s Community Strategies Group, the conversation will consider what it will take for rural communities to balance new residents, retain longtime residents and cultural traditions, and develop more equitable local economies. It will also examine the mechanisms and trends driving migration and displacement in rural communities.

PUBLICATIONS AND MEDIA

Property insurance changes and alternatives examined

In a report titled Climate Change, Disaster Risk, and Homeowner’s Insurance, the Congressional Budget Office analyzes recent changes in property insurance markets along with possible solutions. Suggestions include alternative insurance products as well as policy approaches to increase the availability and affordability of insurance for homeowners and renters. First Street will offer a webinar about this report on September 5.

Reports cover broadband’s importance and innovations in rural and Native communities

Expanding America’s Bandwidth: Gaps in Rural and Underserved Communities, a brief paper from the Federal Reserve Board, summarizes research on the importance of broadband and how the lack of access disproportionately impacts rural and low-income communities. Practitioners’ expertise is offered in a recent publication from the Aspen Institute’s Community Strategies Group, Making Broadband Work for Rural Communities and Native Nations, which covers lessons learned, gaps in resources, and innovative approaches. A set of case studies from Cornell University, Innovative State Strategies for Rural Broadband: Case Studies from Colorado, Minnesota and Maine, is summarized in a blog post by the Pew Charitable Trusts, which supported the research.

HAC

HAC supports rural provisions in Capital Magnet Fund interim rule

HAC submitted comments on an interim rule for the CDFI Fund’s CMF program, broadly supporting the rule and focusing on several rural elements. We support adding a national Rural Service Area, which will make it easier to use CMF in rural areas; aligning CMF income targeting with other federal programs and prioritizing applications that propose deeper income targeting; and using the Duty to Serve definition for rural areas.

HAC is hiring

HAC job listings and application links are available on our website.

Need capital for your affordable housing project?

HAC’s loan fund provides low interest rate loans to support single- and multifamily affordable housing projects for low-income rural residents throughout the U.S. and territories. Capital is available for all types of affordable and mixed-income housing projects, including preservation, new development, farmworker, senior and veteran housing. HAC loan funds can be used for pre-development, site acquisition, site development, construction/rehabilitation and permanent financing. Contact HAC’s loan fund staff at hacloanfund@ruralhome.org, 202-842-8600.

Please note: HAC is not able to offer loans to individuals or families. Borrowers must be nonprofit or for-profit organizations or government entities (including Tribes).

Want to reprint a HAC News item?

Please credit the HAC News and provide a link to HAC’s website. Thank you!

Policy News town

HAC Supports Rural Provisions in Capital Magnet Fund Interim Rule

/in , , ,
The CDFI Fund has released for comment an interim rule for the Capital Magnet Fund (CMF) program. The Capital Magnet Fund offers competitively awarded grants to CDFIs and nonprofit affordable housing organizations to finance affordable housing solutions and community revitalization efforts that benefit individuals and families with low-incomes and low-income communities nationwide. HAC has received several CMF awards, most of which have been used for the preservation of USDA’s Section 515 multifamily properties amid the maturing mortgage crisis. HAC is broadly supportive of the CMF interim rule, and submitted comments on several rural elements, including:
  • Support for the addition of a national Rural Service Area. This change will make it easier to use CMF in rural areas, and will all organizations who serve rural areas across the country to be nimble and flexible with their CMF funds.
  • Support for aligning CMF income targeting with other federal programs, with the caveat that the application competition should prioritize applications that propose deeper income targeting. Not all CMF deals include LIHTCs, especially in rural places. We encourage the CDFI Fund to consider how to continue to encourage this deeper income targeting in the CMF application scoring process, since raising the Very Low-Income threshold could result in fewer households under 50 percent AMI being served.
  • Support for the use of the Duty to Serve definition for rural areas. HAC has done extensive research on the myriad of rural definitions, and feels that the Duty to Serve definition is the most precise rural definition available.
HAC CMF Rule Comments 08.26.24

HAC News: August 15, 2024

/in ,

TOP STORIES

Senate votes against considering tax bill

On August 1 the Senate failed to pass a procedural measure that would have advanced the Tax Relief for American Families and Workers Act. The bill, H.R. 7024, passed the House in January. It includes provisions that would strengthen the Low-Income Housing Tax Credit and expand the Child Tax Credit.

FEMA limits disaster spending to immediate needs

Because of a funding shortfall, FEMA implemented “Immediate Needs Funding” guidance on August 7. To maximize funds available for response and recovery, the agency will obligate funds only for essential needs. It will continue to accept applications for other funding but will not make those obligations until additional appropriations are available. Disaster Relief Fund State of Play: In Brief, published by the Congressional Research Service on August 13, examines FEMA’s Disaster Relief Fund and why it relies on supplemental appropriations.

Consumer protections apply to contracts for deed, CFPB confirms

The Consumer Financial Protection Bureau on August 13 released a consumer advisory, an advisory opinion, and a research report on contract for deed home purchases, a form of financing that requires a buyer to make all payments before receiving the deed to their home. Contracts for deed may lead to full homeownership, CFPB says, but the agency’s report identifies several ways in which these contracts can harm consumers, particularly low-income and BIPOC people. The advisory opinion affirms that federal home lending rules and laws cover contracts for deed and provide key consumer protections. The consumer advisory explains the potential problems and provides suggestions for homeowners needing assistance with contracts for deed.

RuralSTAT

USDA’s Economic Research Service has developed a new concept of enduring poverty to refer to places with poverty rates of 20% or higher for 40 years or longer. Of the 346 counties that were persistently poor from 1990 to 2019, 304 had enduring poverty from 1960 to 2019. Source: USDA Economic Research Service, The Poverty Area Measures Data Product.

OPPORTUNITIES

Funds available for removing barriers to affordable housing

Round 2 of HUD’s Pathways to Removing Obstacles to Housing (PRO Housing) competition has opened, with an October 15 deadline. State and local governments, metropolitan planning organizations, and multijurisdictional entities are eligible to apply for grants to identify and remove barriers to affordable housing production and preservation such as outdated zoning, land use policies, or regulations; inefficient procedures; gaps in available resources for development; and challenges to preserving existing housing stock such as increasing threats from natural hazards, redevelopment pressures, or expiration of affordability requirements.

HUD offers CDBG Section 108 “Legacy Challenge”

Jurisdictions that receive CDBG grants can borrow up to five times their CDBG allocation using a Section 108 loan guarantee. Under a new Legacy Challenge, HUD offers flexibilities, waivers, and resources to develop a housing fund or invest in a transformational project. A webinar for potential applicants will be held August 29. Expressions of interest are due November 1.

REGULATIONS AND FEDERAL AGENCIES

Federal agencies launch national heat strategy

A National Heat Strategy for 2024-2030 was released August 14 by  the interagency National Integrated Heat Health Information System, which includes USDA, HUD, and more than 20 other agencies. The strategy aims to promote proactive coordination related to heat planning, response, and resilience. HUD’s press release and a HUD web page on extreme heat focus on housing-related impacts and resources.

HUD-VASH voucher program revised

A new HUD notice provides updated policies and procedures for the administration of tenant-based and project-based Section 8 Housing Choice Vouchers under the HUD-VA Supportive Housing program. The notice includes new waivers and program flexibilities as well as additional general guidance, and it also incorporates updated policy based on further implementation of the Housing Opportunity Through Modernization Act of 2016.

FY25 Fair Market Rents posted

HUD has released the Fair Market Rents that will be used in fiscal year 2025 – which begins October 1, 2024 – for the Housing Choice Voucher Program and other programs. October 1 is also the deadline for public comments and for public housing agencies to request reevaluations of FMRs.

HUD asks how to expand Choice Neighborhoods program’s reach

HUD requests comments on opportunities and barriers to applying for and subsequently managing Choice Neighborhoods Planning and Implementation Grants. The department expresses particular interest in expanding the program’s reach to communities of all sizes, including large urban areas, mid-sized cities, small towns, rural areas, and tribal jurisdictions. Comments are due October 11.

More flexible servicing options now available for Section 502 guaranteed lenders

A final rule is intended to benefit borrowers and lenders and reduce the program risk of the Section 502 guaranteed loan portfolio. It gives lenders more flexibility in their servicing options for non-performing loans and offers a revised Mortgage Recovery Advance process.

FEMA allows more time to apply for Hazard Mitigation Grants

A new final rule extends the time period for applicants to request funds from FEMA’s Hazard Mitigation Grant Program and allows FEMA to reopen application periods under some circumstances. HMGP funding goes to state, local, Tribal, and territorial governments (nonprofits are eligible to be subrecipients) to include mitigation measures for future disasters while recovering from a disaster. Applicants will now have 15 months from the date of a disaster declaration, rather than the previous 12 months, to apply for HMGP support.

HUD may extend manufactured housing code to multi-unit buildings

HUD hopes to amend its manufactured housing regulations to allow the Manufactured Home Construction and Safety Standards (better known as the HUD Code) to cover duplexes, triplexes, and fourplexes, according to an August 13 fact sheet from the White House. The document does not provide details on this future regulation.

EVENTS

HAC to offer Section 502 direct loan packaging course in Alabama

HAC will hold an in-person USDA Section 502 Direct Certified Loan Packaging Course in Montgomery, AL on September 24-26. This three-day advanced course prepares participants to become certified Section 502 loan packagers. It is designed for those experienced in using Section 502. A laptop is required for the class for each participant. Following the course, participants are encouraged to take the online certification exam. The registration fee is $750. For more information, contact HAC, registration@ruralhome.org, 202-842-8600.

PUBLICATIONS AND MEDIA

Study identifies challenges in addressing farmworkers’ vulnerability to disasters

Farmworkers are vulnerable to disasters and not well served by disaster recovery programs, but existing public health tools cannot clearly identify their locations and needs, researchers from the University of Florida found after Hurricane Idalia. The social vulnerability indicators currently in use do not include factors such as legal status that make farmworkers particularly challenging to serve. The Social Vulnerability of Farmworker Communities in North Central Florida: Challenges and Opportunities for Mapping Vulnerable Populations, published by the Natural Hazards Center at the University of Colorado Boulder, reports on social vulnerability indicators developed by collecting qualitative data as well as quantitative, and on the empirical and ethical challenges of mapping populations that are often targeted by public authorities. The study is also examined in “‘A Matter of Life and Death’: How Disaster Response Endangers US Farmworkers,” an article published by Grist and the Daily Yonder.

Low-income renters face choices between housing, food, and energy costs

An analysis of the Census Bureau’s Household Pulse Survey results by Harvard’s Joint Center for Housing Studies shows that in the first half of 2024, well over half (59%) of renters with incomes below $25,000 had difficulty meeting all their expenses. The data, reported in a blog post titled Renters Struggle with Competing Costs of Food, Energy, and Housing, shows the difficulty renters face in balancing the costs of necessities. The figures are not broken down by rural, urban, suburban, or metropolitan geography.

2023 National Survey on Drug Use and Health released

The Substance Abuse and Mental Health Services Administration’s 2023 National Survey on Drug Use and Health found that 19.1% of people 12 years of age or older in the U.S. (54.2 million people) needed substance use treatment in the past year, but only 4.5% of people (12.8 million) received needed treatment. The survey measures use of various drugs and alcohol, substance use disorders, treatment, recovery, and other key indicators.

HAC

HAC comments on proposed Duty to Serve plans for 2025-2027

HAC has submitted comments to the Federal Housing Finance Agency regarding Fannie Mae’s and Freddie Mac’s proposed plans for 2025-2027 activities to meet their Duty to Serve three historically underserved markets: rural housing, affordable housing preservation, and manufactured housing. HAC’s comments, which are available on our website, covered many different topics and applauded many of the proposed goals while arguing that, broadly, the plans are not ambitious enough when compared to rural needs. HAC recommends permitting Fannie Mae and Freddie Mac to make targeted equity investments in CDFIs, maintaining the preservation of Section 515 multifamily properties as a core Duty to Serve goal, and increasing the proposed goals related to heirs’ property, colonias, Native American housing finance, and manufactured housing, as well as adding goals specifically for farmworker communities.

HAC is hiring

HAC job listings and application links are available on our website.

Need capital for your affordable housing project?

HAC’s loan fund provides low interest rate loans to support single- and multifamily affordable housing projects for low-income rural residents throughout the U.S. and territories. Capital is available for all types of affordable and mixed-income housing projects, including preservation, new development, farmworker, senior and veteran housing. HAC loan funds can be used for pre-development, site acquisition, site development, construction/rehabilitation and permanent financing. Contact HAC’s loan fund staff at hacloanfund@ruralhome.org, 202-842-8600.

Please note: HAC is not able to offer loans to individuals or families. Borrowers must be nonprofit or for-profit organizations or government entities (including Tribes).

Want to reprint a HAC News item?

Please credit the HAC News and provide a link to HAC’s website. Thank you!

Policy News town

HAC Comments on Proposed GSE Duty to Serve Plans for 2025-2027

/in , , ,

As part of the Duty to Serve program, Fannie Mae and Freddie Mac (the Enterprises) have submitted for comment their proposed 2025-2027 Underserved Markets Plans. Duty to Serve requires the Enterprises to proactively serve three historically underserved markets: rural housing, affordable housing preservation, and manufactured housing. The rule requires each Enterprise to develop three-year Underserved Markets Plans, and these 2025-2027 Plans represent the next upcoming cycle of Duty to Serve activity.

HAC has submitted comments on all three underserved markets. While our comments covered many different topics and aspects of the proposed Plans, some highlights include:

  • Duty to Serve goals that rely on low baselines and/or do not scale up year-over-year do not send a message of proactive commitment from the Enterprises. A great deal of work has clearly gone into these Plans, and HAC applauds many of the goals laid forth. However, we continue to feel that, broadly, the Plans are not ambitious enough when compared to the need on the ground in rural areas. The true, yet-untapped potential of Duty to Serve requires the Enterprises to set and stick to ambitious goals, and we encourage that in the 2025-2027 Plans.
  • Permitting targeted equity investments in CDFIs is, in HAC’s opinion, the single most impactful action that the FHFA could currently take to improve Duty to Serve outcomes. It would allow community-based nonprofit lenders to bring the power of the Enterprises to markets in which little to no mortgage activity currently occurs, growing new markets for future activity by the Enterprises. We continue to encourage the FHFA to take this opportunity to approve the use of the equity investment tool for CDFIs.
  • The preservation of USDA Section 515 multifamily properties must remain a core Duty to Serve goal. Section 515 preservation deals are complex and time consuming, and HAC appreciates the time that both Enterprises have invested in exploring avenues for engagement with the preservation of this important rural rental housing stock. But more ambitious Section 515 preservation goals are needed from both Entreprises, especially Freddie Mac.
  • The focus in the proposed Plans on heirs’ property and colonias is welcome. We encourage even more robust goals in these areas, as well as goals specifically for farmworker communities.
  • Much more ambitious goals are needed for loan purchases and other activities in Native communities. Housing finance in Native American communities has been a stunning example of both racial and geographic inequity at both the policy and private market levels. Many lenders have all too often chosen to simply not serve these investment-worthy markets. The Enterprises need to set significantly higher loan purchase goals for Native families living in Indian areas.
  • Renewed commitment to the purchase of manufactured housing loans titled as personal property is needed. The majority of manufactured homes are financed with personal property, or “chattel,” loans. The Enterprises could play a positive role by bringing chattel loans into their secondary market and encouraging more favorable terms for borrowers who rely on these loans.
HAC DTS 2025-2027 Plan Comments FINAL

HAC News: August 1, 2024

/in ,

TOP STORIES

Senate committee rejects House’s HUD funding cuts

The full Senate Appropriations Committee approved its proposed Transportation-HUD spending bill for FY25 on July 25, rejecting the 60% HOME program cut proposed in the bill that passed its House counterpart on July 10. The Senate bill would also increase funding above FY24 levels for other HUD programs, including SHOP, Rural Capacity Building, Native American housing, Homeless Assistance Grants, and the Choice Neighborhoods Initiative. Details are posted on HAC’s website. The next step will be for the full House and full Senate to vote. Congress is not expected to be able to finalize FY25 appropriations by the beginning of the fiscal year on October 1. It is likely that legislators will adopt a continuing resolution to temporarily maintain federal funding; the alternative would be a government shutdown.

Senate expected to vote August 1 on tax bill

Senate Majority Leader Charles Schumer (D-NY) has moved to hold a floor vote August 1 on the Tax Relief for American Families and Workers Act. This bipartisan bill, H.R. 7024, passed the House in January. It includes provisions that would strengthen the Low-Income Housing Tax Credit and expand the Child Tax Credit. The August 1 action, which requires a 60-vote majority to pass, is procedural and will determine whether the Senate can debate and vote on the bill after its August recess.

RuralSTAT

According to the most recent estimates from the U.S. Bureau of Labor Statistics, an estimated 908,000 workers outside of metropolitan areas were unemployed in June 2024, resulting in a 4.3% rural unemployment rate (not seasonally adjusted). Consistent with national and metropolitan trends, the unemployment rate for outside metropolitan workers increased by 0.8% between May and June of 2024. Source: Housing Assistance Council Tabulations of the U.S. Bureau of Labor Statistics Local Area Unemployment Statistics data.

OPPORTUNITIES

HUD opens two more lead and healthy homes programs

The Lead Hazard Reduction Capacity Building Grant Program will help states, Tribes, and local governments with developing and expanding the infrastructure necessary to undertake comprehensive programs to identify and control lead-based paint hazards in privately owned rental or owner-occupied housing. The deadline is September 4.

The Healthy Homes Production Grant Program is for nonprofits, states, Tribes, and local governments. The program takes a comprehensive approach to addressing multiple childhood diseases and injuries in the home by focusing on housing-related hazards in a coordinated fashion, rather than addressing a single hazard at a time. The deadline is September 3.

These are in addition to the Lead and Healthy Homes Technical Studies Grant Program, the Healthy Homes and Weatherization Cooperation Demonstration, and the Lead Hazard Reduction Grant Program covered in the 7/3/24 HAC News, all of which have deadlines in August.

Homeless funding notice posted

HUD has issued a notice of funding opportunity offering FY24 and FY25 Continuum of Care funds and renewal or replacement of Youth Homeless Demonstration Program Grants. CoCs can apply for funding for both years by October 30, 2024, or for FY25 by August 29, 2025.

Community Facilities disaster grants offered

Public bodies, community-based nonprofits, and federally recognized Tribes are eligible for these funds, which can be used to repair essential community facilities damaged by presidentially declared disasters in calendar year 2022 or to repair or replace essential community facilities damaged by presidentially declared disasters or other disasters in calendar year 2023. Grants may cover up to 75% of total project cost.

Permanent supportive housing funds available for Continuums of Care

HUD’s new Continuums of Care Builds program offers funds to CoCs, including newly forming CoCs, for new construction, acquisition, or rehabilitation of permanent supportive housing. To support Tribal communities, CoCBuilds offers incentives for funding projects in partnership with Indian Tribes and Tribally Designated Housing Entities. Of the $175 million available, HUD is setting aside $65 million for CoCs that are located in states with populations of fewer than 2.5 million people. The deadline is November 21.

REGULATIONS AND FEDERAL AGENCIES

New loss mitigation option to be tested for USDA guaranteed mortgage holders

A demonstration program will assist borrowers with Section 502 guaranteed mortgages who experience hardship and are unable to make monthly mortgage payments. Through the Payment Supplement Account demonstration, USDA will pay a partial claim to the mortgage servicer, enabling the servicer to advance funds on behalf of the borrower to satisfy the borrower’s arrearage and cover costs. The demonstration will be in effect from July 24, 2024 to July 24, 2026, at which time the agency may extend, modify, or terminate it. For more information or to express interest in participating in the demo, contact the Loan Servicing Branch, SFHGLPServicing@usda.gov, 202-720-1452.

Mortgage servicer regulatory update proposed

To help avert avoidable foreclosures, the Consumer Financial Protection Bureau suggests amendments to its regulations regarding the responsibilities of mortgage servicers. CFPB says the proposed changes would streamline existing requirements when distressed borrowers seek payment assistance and would add safeguards. They would also require servicers to provide some communications in languages other than English. Small servicers – generally, those that service 5,000 or fewer mortgage loans that they or their affiliates own or originated – would be exempt from all new requirements. Comments are due September 9.

Guidance added for Housing Choice Voucher mobility demonstration

A new notice supplements the documents that currently govern HUD’s Community Choice Demonstration, a Housing Choice Voucher mobility pilot.

Regulators set final guidance on appraisal reconsiderations

The Federal Reserve Board, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency have issued final guidance for financial institutions highlighting risks associated with deficient appraisals of residential real estate. The agencies describe how lenders can incorporate reconsiderations of value processes and controls into established risk management functions, and provide examples of relevant policies and procedures.

Comments requested on Affordable Housing Program application process

The Federal Housing Finance Agency seeks input on ways to improve the application processes for competitive Affordable Housing Program funding from the regional Federal Home Loan Banks. Comments are due August 19.

HUD considers direct rental assistance

HUD seeks public input on the concept of “direct rental assistance” – providing a rental housing subsidy directly to the renter rather than to the landlord as the Housing Choice Voucher program does. A National Low Income Housing Coalition article describes questions and concerns raised by the proposal. Comments are due August 30.

USDA distributes discrimination-based aid to farmers, closes program

The Discrimination Financial Assistance Program (Section 22007) was created by the Inflation Reduction Act to provide one-time financial assistance to farmers, ranchers, and forest landowners who experienced discrimination prior to January 2021. USDA announced on July 31 that it has distributed the funds to over 43,000 recipients in all 50 states, D.C, Puerto Rico, the U.S. Virgin Islands, and American Samoa. The decisions are final and cannot be appealed.

PUBLICATIONS AND MEDIA

Rural left-behind counties see economic recovery but are still falling behind

“Left-behind counties,” most of which are outside metropolitan areas, have experienced a vigorous economic recovery since 2020, but the economic gap between these counties and the rest of the country continues to grow, according to a study by the Economic Innovation Group. Economic Renaissance or Fleeting Recovery? Left-Behind Counties See Boom in Jobs and Businesses Amid Widening Divides identifies 972 counties as left-behind because their population and median household income growth rates lagged far behind national rates from 2000 to 2016. EIG defines 90% of these counties (largely those outside metro areas) as rural. As a group, the rural left-behind counties are seeing a faster post-pandemic employment recovery and are now closest to regaining pre-COVID employment levels. They are still making up lost ground from decades of stagnation, however, and fewer workers are employed in these counties now than almost a quarter-century ago.

Property insurance crisis examined

Rising Property Insurance Costs: The Threat to Affordable Housing, a video and several related articles published by Shelterforce, explore the increasing tension between the need for insurance in a changing climate and its rising cost or unavailability. More articles may be added to the series.

HUD convened a summit on the topic and issued a fact sheet covering the issues and HUD’s efforts to address them.

Court decision may signal trouble for California farmworker unionizing law

A lawsuit brought by agricultural employers in Kern County, CA argues that a California law allowing farmworkers to unionize more easily undermines the rights of employers. A state court judge recently issued an injunction to stop union organizing at one company while the litigation proceeds, indicating that the unionization law “is likely unconstitutional.” The outcome of this case could have far-reaching consequences for farmworker unions and their ability to organize and advocate for better working conditions. Details are available from a number of news sources including the Fresno Bee, Los Angeles Times, Cal Matters, and Ag Daily. To learn more about farmworkers and recent housing trends, check out HAC’s latest publication on farmworkers.

Oregon affordable rentals get solar power

An article in Solar Power World entitled Rural Oregon Solar Installer Finds Niche in Multifamily Housing describes a company that has connected affordable rental housing with renewable energy. Enterprise Electric, based in a rural, sparsely populated county, has become a major residential solar contractor, working with another business that develops subsidized affordable housing with renewable energy sources.

HAC

HAC comments on proposed rule for HOME program

HAC recently submitted comments on a HUD proposal that would make a variety of revisions and updates to the regulations governing the HOME program. The proposed rule would make changes across HOME, from homeownership to rental, and included a specific focus on improving Community Housing Development Organization availability and capacity in rural areas. HAC’s comments applauded many of the proposed changes and pushed for additional rural-focused priorities. Key points included the challenges posed by varying HOME program administration across Participating Jurisdictions, concerns about the proposal to allow for statewide CHDOs, and the need for statutory changes as well as regulatory actions.

HAC is hiring

HAC job listings, each with application instructions, are available on our website.

Need capital for your affordable housing project?

HAC’s loan fund provides low interest rate loans to support single- and multifamily affordable housing projects for low-income rural residents throughout the U.S. and territories. Capital is available for all types of affordable and mixed-income housing projects, including preservation, new development, farmworker, senior and veteran housing. HAC loan funds can be used for pre-development, site acquisition, site development, construction/rehabilitation and permanent financing. Contact HAC’s loan fund staff at hacloanfund@ruralhome.org, 202-842-8600.

Please note: HAC is not able to offer loans to individuals or families. Borrowers must be nonprofit or for-profit organizations or government entities (including Tribes).

Want to reprint a HAC News item?

Please credit the HAC News and provide a link to HAC’s website. Thank you!

Policy News town

HAC Comments on Proposed New Rule for HOME Investment Partnerships Program

/in , , ,
In late May, HUD published a proposed rule which would enable much needed revisions and updates to the requirements governing the HOME Investment Partnerships program. The proposed rule would make changes across the HOME program, from homeownership to rental, and included a specific focus on improving Community Housing Development Organization (CHDO) availability and capacity in rural areas. In response, HAC submitted comments on the proposed rule, applauding many of the proposed changes and pushing for additional rural-focused priorities. Specifically, key takeaways in HAC’s comments included:
  • The reality of the rural landscape must be taken into consideration as this new rule is finalized. Affordability is the greatest issue facing rural communities, like it is for the country at large. But rural areas are also disproportionately impacted by persistent poverty, substandard and overcrowded housing, and a lack of local capacity and access to capital.
  • Varying HOME program administration across Participating Jurisdictions (PJs) has been the most significant barrier for the small rural communities we serve. Over the last decade, we have observed that rural organizations experience significant challenges in effectively accessing HOME funds. Primarily, these difficulties arise from how PJs have adapted their programs, largely as a response to the 2013 regulation changes and subsequent funding reductions. PJs will need significant training in the impacts of this new rule to ensure it is implemented effectively.
  • Regulatory change alone cannot solve all the challenges within the HOME program. Because of the highly prescriptive nature of the HOME statute, a variety of statutory changes are also needed to fully transform the program such that it more positively impacts rural America.
  • Rural Community Housing Development Organizations will benefit from the proposed changes, but more is needed to move the needle. HAC applauds changes to Board Member requirements, organizational capacity requirement, and capacity building funds. We do, however, have concerns around the proposal to allow for statewide CHDOs, intended to improve rural program outcomes. Statewide CHDOs could inadvertently further disadvantage small, rural groups who are hoping to access the CHDO set-aside by forcing them to potentially compete with high-capacity, statewide organizations.
  • Streamlining and improved flexibility across the program is welcome. Helpful changes are proposed with respect to homebuyer housing, rental housing, Community Land Trusts, tenant-based rental assistance, tenant protections, maximum per-unit subsidy limits, and green and resilient property standards. These changes will help small, lower capacity groups to access and see success with the HOME program.
HAC HOME Rule Comments 07.29.24 FINAL

Senate Committee Rejects HUD Funding Cuts Proposed by House

/in , , , , ,

The full Senate Appropriations Committee approved its proposed Transportation-HUD spending bill for the 2025 fiscal year on July 25, 2024, rejecting the 60 percent HOME program cut proposed in the bill that passed its House counterpart on July 10.

— HAC’s analysis of FY25 appropriations for USDA housing programs is available here. —

The Senate THUD bill is highlighted by a plethora of budgetary increases for different HUD programs, including increased funding for the Self-help Homeownership Opportunity Program and Rural Capacity Building program, $1.455 billion for the Native American Housing Block Grant program, and a $268 million increase in funding for Homeless Assistance Grants. The Senate would also increase funding for both the HOME program and the Choice Neighborhoods Initiative. The House bill proposes to cut the HOME Program’s funding from $1.25 billion in FY24 to $500 million and to eliminate funding entirely for the Choice Neighborhoods Initiative, which received $75 million this year. The Senate bill proposes funding levels of $1.425 billion and $100 million for these programs, respectively.

The next steps will be for the full House and full Senate to vote. The House is currently on its August recess and will not return until September 9. Congress is not expected to be able to finalize FY25 appropriations by the beginning of the fiscal year on October 1. It is likely that legislators will adopt a continuing resolution to temporarily maintain federal funding; the alternative would be a government shutdown.

 

Program
($ in millions)		 FY23 Final FY24 Final FY25 Budget FY25 House FY25 Senate FY25 Final*
CDBG $3,300 $3,300 $2,900 $3,300 $3,300
HOME 1,500 1,250 1,250 500 1,425
PRICE Manuf. Hsg. 225 10 0 10 10
Self-Help Hmownrshp (SHOP) 13.5 12 9 9 13
Veterans Home Rehab 1 0 0 0 0
Rural Cap’y Bldg (RCB) 6 6 5 5 10
Tenant-Based Rental Asst. 27,600 32,387 32,756 32,272 35,260
     VASH 50 15 0 0 15
     Tribal VASH 7.5 7.5 5 8 7.5
     Replacemts for 521 RA – – 20** – –
Project-Based Rental Asst. 13,938 16,010 16,686 16,195 16,654
Public Hsg. Capital Fund 3,200 3,410 3,312 3,047 3,200
Public Hsg. Operating Fund 5,109 5,501 5,238 5,097 5,366
Choice Neighborhd. Initiative 350 75 140 0 100
Native Amer. Hsg. 1,020 1,344 1,053 1,455 1,455
Homeless Asst. Grants 3,633 4,051 4,060 4,060 4,319
Hsg. Oppties for Persons w/ AIDS (HOPWA) 499 505 505 505 524
202 Hsg. for Elderly 1,075 913 931.4 931.4 1,046.4
811 Hsg. for Disabled 360 208 256.7 256.7 256.7
Fair Hsg. 86 86.4 86.4 85 86.4
Healthy Homes & Lead Control 410 345 350 335 345
Hsg. Counseling 57.5 57.5 57.5 57.5 57.5

* These columns will be filled in as the FY25 funding process progresses.

** Up to $20 million would be set aside to provide tenant protection vouchers to tenants who had USDA Section 521 Rental Assistance but are losing it because their building is losing or ending its USDA mortgage.

House Committee Approves 60% Cut in HOME Program Funding

UPDATE July 11, 2024 – The full House Appropriations Committee approved the proposed FY25 Transportation-HUD spending bill on July 10. The Senate Appropriations Committee has begun releasing summaries of its FY25 bills, but T-HUD is not yet available.

June 27, 2024 – The HOME program would be dramatically smaller under the FY25 spending bill approved by an appropriations subcommittee on June 26, 2024. The bill, which will be considered by the full Appropriations Committee on July 10, would also block implementation of the Biden administration’s proposed Affirmatively Furthering Fair Housing rule and the recent energy efficiency determination made by HUD and USDA.

The summary of the House bill provided by the Transportation-HUD Appropriations Subcommittee says that it funds “full renewal for all currently-leased, tenant-based rental assistance vouchers, all project-based rental assistance contracts, and all housing for the elderly and persons with disabilities contracts.” It would cut HOME, however, to $500 million from $1.25 billion in FY24. The Self-Help Homeownership Opportunity Program (SHOP) would be cut from $12 million in FY24 to $9 million next year. And the Choice Neighborhoods program would receive no funding at all.

The Senate has not yet released its version of the bill.

Administration’s Budget Requests Substantial New HUD Funding

March 12, 2024 – The Biden Administration’s budget for fiscal year 2025, released on March 11, 2024, includes proposals for HUD and other housing programs – USDA, the Low-Income Housing Tax Credit, and others – that are part of broader Administration efforts to help meet increasing housing costs and address homelessness. If the budget were adopted as proposed, several pieces of this mosaic would be mandatory funding rather than discretionary, and others would be tax credits. Discretionary funds are subject to annual appropriations, while mandatory spending is not, so it is not subject to the caps on discretionary spending imposed by the 2023 debt limit agreement.

The recording and slides from HAC’s March 13 webinar on Rural Housing in the Fiscal Year 2025 White House Budget are posted here.

Discretionary Funds

The budget would reduce funding for many of HUD’s housing production programs, including HOME, CDBG, SHOP, and Native American housing. It requests a total of $1.053 billion for Native American housing, just barely above the $1.02 billion provided in FY23 and notably lower than the $1.34 billion just adopted for FY24.

Tenant support fares somewhat better. For example, the budget proposes a total of almost $32.8 billion for Tenant-Based Rental Assistance (Housing Choice Vouchers), of which $29.25 billion is intended to renew all existing vouchers. An additional $241 million would provide 20,000 new incremental vouchers. (Separately, the mandatory funding proposals would guarantee vouchers to all extremely low-income veterans and all youth aging out of foster care.)

The budget also requests $30 million for the Recovery Housing Program, which allocates funds to states to provide temporary housing for individuals recovering from substance use disorders, including opioids.

Proposed New Mandatory Spending

The Administration’s proposals for mandatory spending programs cover production of new units, tenant assistance, and homelessness solutions.

  • Extremely low-income housing supply subsidy: $15 billion
    • New Project-Based Rental Assistance: $7.5 billion
    • Preserve distressed public housing: $7.5 billion
  • Innovation Fund for Housing Expansion: $20 billion
  • Housing vouchers for vulnerable low-income populations: $22 billion
    • all youth aging out of foster care: $9 billion
    • extremely low-income veterans: $13 billion
  • First-generation homebuyer down payment assistance: $10 billion
  • Sustainable eviction prevention reform: $3 billion
  • Homelessness grants: $8 billion
  • Emergency rental assistance for older adults at risk of homelessness: $3 billion

Tax Credit Proposals

  • The budget would expand the Low-Income Housing Tax Credit to build or preserve 1.2 million more affordable rental units. It asks Congress to increase per capital credit allocations, reduce the bond financing threshold, and revise the “qualified contract” and “right of first refusal” provisions for future developments.
  • A mortgage relief credit would provide middle-class first-time homebuyers with an annual tax credit of $5,000 a year for two years. The White House says that “this is the equivalent of reducing the mortgage rate by more than 1.5 percentage points for two years on the median home, and will help more than 3.5 million middle-class families purchase their first home over the next two years.”
  • A separate one-year tax credit is intended to assist homeowners who could purchase a larger or more expensive home but hesitate to sell their starter home because of high mortgage rates or high housing costs. A middle-class homeowner would receive a credit up to $10,000 for selling a home below the area median home price in the county to another owner-occupant. The White House estimates this proposal would help nearly 3 million families.
  • A new Neighborhood Homes Tax Credit would allocate credits to developers and other sponsors of new construction or substantial rehabilitation of homeownership units in distressed areas. The White House estimates this would generate over 400,000 homes.

The Administration also proposes requiring each Federal Home Loan Bank to contribute 20 percent, rather than the current 10 percent, of annual income to the Affordable Housing Program. It calculates the change would raise an additional $3.79 billion for affordable housing over the next decade and assist nearly 380,0000 households.

HAC News: July 18, 2024

/in ,

TOP STORIES

House and Senate committees disagree on rural housing funding

Cuts made this year in funding levels for USDA’s Section 502 direct and 523 self-help housing programs would not be fully restored by the bills for next year that have passed the Appropriations Committees in both the House and the Senate. While the Senate’s FY25 bill would hold many of the rural housing programs at their current funding levels, it would set Section 502 direct at $1 billion – higher than the House’s $950 million or the FY24 level of $880 million, but still substantially below the $1.25 million appropriated for FY23. The Section 523 self-help program, which received $32 million in FY23 and $25 million this year, would get $25 million next year under the Senate’s bill and $20 million under the House’s.

The House and Senate both rejected the administration budget’s request to increase funding for the Section 515 and Multifamily Preservation and Revitalization programs. The Senate bill proposes to expand the current decoupling pilot, which allows Section 515 properties to continue receiving Section 521 Rental Assistance after the Section 515 mortgage is paid off. The Senate would allow 5,000 units of decoupled RA rather than the current 1,000.

Details are available on HAC’s website. The next steps will be floor votes in both houses. Final passage of FY25 appropriations is not expected until after the November election, although the new fiscal year begins on October 1.

House committee approves big cut in HOME funding

On July 10 the full House Appropriations Committee approved its FY25 HUD funding bill, which includes a 60% cut in funding for the HOME program. The bill would also block implementation of the Biden administration’s proposed Affirmatively Furthering Fair Housing rule and the recent energy efficiency determination made by HUD and USDA. Details are available on HAC’s website. The Senate has not yet released or scheduled consideration of its HUD bill.

New administration proposal on housing cost and availability

President Biden issued a statement on July 16 asking Congress to pass legislation that would eliminate a tax break for corporate landlords if they raise rent more than 5% per year. The rent cap would apply to landlords owning over 50 units and would last for two years, intended to provide enough time for construction of new units. In addition, several federal agencies are planning or investigating possibilities for creating housing on land they own, and the administration called for state and local governments, as well as other entities, to develop affordable housing on their land.

RuralSTAT

In 2023 the number of new mortgages for rural home purchases declined by 21% from the previous year’s level. In total, there were a reported 559,244 home purchase mortgages, 164,460 mortgage refinancings, and 36,385 home improvement loans made to rural consumers in 2023. Source: Housing Assistance Council tabulations of the Consumer Financial Protection Bureau’s FFIEC Home Mortgage Disclosure Act data.

OPPORTUNITIES

Initiative supports reentry into stable housing

The Council of State Governments and the U.S. Justice Department’s Bureau of Justice Assistance launched the Zero Returns to Homelessness initiative to support reentry into stable housing for justice involved residents. The Zero Returns to Homelessness Cohort will provide state teams with two years of free and extensive technical assistance support intended to generate a concrete expansion in the amount of housing available to people in reentry. Applications are due August 12. Local, regional, and Tribal teams are eligible for a three-session monthly virtual Reducing Housing Barriers to Jail Diversion community of practice. Applications are due July 22. The initiative’s website also offers other resources including a technical assistance guide.

Housing Trust Fund allocations set

HUD has allocated $214 million in FY24 monies from the Housing Trust Fund to states and territories. The total amount, which is based on Fannie Mae and Freddie Mac business in the previous year, is slightly more than the $196 million announced by the Federal Housing Finance Agency in February, but far less than the $354 million available in FY23 and $740 million in FY22.

REGULATIONS AND FEDERAL AGENCIES

FEMA rule to increase resilience against flooding

As repeated flooding occurs more often, the Federal Flood Risk Management Standard (FFRMS) and a new FEMA regulation to implement it are intended to increase resilience. The standard requires stricter standards for including resilience measures when FEMA funds new construction, substantial improvement, or repairs to substantial damage for structures and facilities, including housing. FEMA will pay for the applicable federal cost share to implement the standard. FFRMS also applies to Hazard Mitigation Assistance projects involving structure elevation, dry floodproofing, and mitigation reconstruction.

FEMA requests input on flood insurance Community Rating System

FEMA seeks public comments as it redesigns the Community Rating System under the National Flood Insurance Program. The system and options under consideration are explained in a Federal Register notice and will be covered at virtual public meetings on August 21, 22, and 27. Comments are due September 9.

Rapid Unsheltered Survivor Housing grants explained, comments sought

Rapid Unsheltered Survivor Housing (RUSH) grants, a form of relief under the Emergency Solutions Grants program, will be allocated to state or local governments in areas that are identified as eligible for FEMA Individual Assistance when a major disaster is declared. The funds will be used to address the needs of people experiencing homelessness or at risk of homelessness in declared disaster areas who have needs not otherwise served or fully met by existing federal disaster relief programs. HUD requests comments by September 16.

HUD extends Buy America waiver for Tribal funding recipients

Build America, Buy America requirements are waived through September 30 for Tribes, Tribally Designated Housing Entities, and other Tribal entities that receive HUD funding.

USDA guarantee fees set for some programs

USDA Rural Development announced guarantee fees that will apply during FY25 to the Community Facilities, Water and Waste Disposal, Business and Industry, and Rural Energy for America loan guarantee programs.

HUD moves compliance date for new inspection standards

HUD has extended the compliance date until October 1, 2025 for the National Standards for the Physical Inspection of Real Estate (NSPIRE) final rule for the Housing Choice Voucher, Project Based Voucher, and Section 8 Moderate Rehabilitation programs, and for the HOME program, Housing Trust Fund, Housing Opportunities for Persons With AIDS, Emergency Solution Grants and Continuum of Care programs.

USDA posts income limits

The 2024 income limits are posted online for USDA’s Section 502 direct and guaranteed mortgage programs and the Section 515, 514/516, and 538 multifamily housing programs.

Protections added for tenants in Fannie Mae and Freddie Mac properties

The Federal Housing Finance Agency announced new actions to protect renters in multifamily properties financed by loans acquired by Fannie Mae and Freddie Mac, including requiring 30-day notices before rent increases and 30-day notices on lease expirations, as well as a five-day grace period before imposing late fees on rental payments. The requirements will take effect for new loans signed after February 28, 2025.

PUBLICATIONS AND MEDIA

Fair housing complaints hit record high

The number of fair housing complaints filed nationwide peaked to record numbers for the third year in a row, according to the National Fair Housing Alliance’s 2024 Fair Housing Trends Report. There were 34,150 fair housing complaints received in 2023, compared to 33,007 complaints received in 2022. Discrimination based on disability accounted for the majority (52.61%) of complaints, but there was a noticeably steep increase in the number of harassment complaints, particularly harassment based on color or race. For the first time, NFHA included questions around algorithmic bias and found the level of awareness of the risks and benefits of automated systems in housing ranged from very aware to very little awareness.

Pre-disaster housing planning report issued by FEMA and HUD

The Pre-Disaster Housing Planning Initiative Report was developed through a partnership among FEMA, HUD, and states. It intends to promote collaborative approaches, to bolster state planning for housing recovery before disasters occur, and to build local capacity. In addition to the report, the initiative prepared a Pre-Disaster Housing Planning Checklist and Guide, as well as a Federal Housing and Sheltering Resource Timeline and Compendium.

HAC

HAC is hiring

HAC job listings, each with application instructions, are available on our website.

Need capital for your affordable housing project?

HAC’s loan fund provides low interest rate loans to support single- and multifamily affordable housing projects for low-income rural residents throughout the U.S. and territories. Capital is available for all types of affordable and mixed-income housing projects, including preservation, new development, farmworker, senior and veteran housing. HAC loan funds can be used for pre-development, site acquisition, site development, construction/rehabilitation and permanent financing. Contact HAC’s loan fund staff at hacloanfund@ruralhome.org, 202-842-8600.

Please note: HAC is not able to offer loans to individuals or families. Borrowers must be nonprofit or for-profit organizations or government entities (including Tribes).

Want to reprint a HAC News item?

Please credit the HAC News and provide a link to HAC’s website. Thank you!

Senate Bill Holds Line on Most USDA Housing Programs, But Unable to Restore Cuts to Section 502 and Self-Help

/in , , , , ,

On July 11, 2024, the Senate Appropriations Committee approved a fiscal year 2025 funding bill that would keep many of USDA’s rural housing programs at their current funding levels. Where the bill does not adopt current levels, it largely follows the administration’s budget request. Section 502 direct loans are a notable exception: the Senate would raise this homeownership program to $1 billion from its FY24 level of $880 million, but even with the increase the program would remain substantially below its FY23 level of $1.25 billion. The administration’s budget request asked for a return to $1.25 billion. Self-help technical assistance is another exception, with a proposed level of $25 million rather than the $32 million that was appropriated in FY23 and requested in the budget.

— HAC’s analysis of FY25 appropriations for HUD programs is available here.  —

Details on the Senate and House bills are provided in the table below.

The Senate bill would expand the current decoupling pilot, which allows Section 515 properties to continue receiving Section 521 Rental Assistance after the Section 515 mortgage is paid off. The Senate proposes to allow 5,000 units of decoupled RA rather than the current 1,000. The House bill would also continue the pilot, but would keep it at 1,000 units.

The funding levels proposed for two capacity-building programs, the Rural Community Development Initiative and rental preservation TA, are stated differently in the Senate bill and in the report that accompanies it. The table below shows the figures from the bill itself. For RCDI, the bill text shows a $5 million funding level, but the report shows only $1 million. For rental preservation, the bill provides $2 million but the report says $1 million.

While the House bill includes a provision blocking implementation of new energy efficiency standards for some USDA-financed homes, the Senate bill does not.

 

Program
($ in millions)		 FY23 Final FY24 Final FY25 Budget FY25 House,

H.R. 9027

 FY25 Senate,

S. 4690

 FY25 Final(a)
502 SF Direct Loans $1,250 $880 $1,250 $950 $1,000
     Nat. Amer. SF Demo 7.5 5 7.5 5 7.5
502 SF Guar. Loans 30,000 25,000 30,000 25,000 25,000
504 VLI Repair Loans 28 25 28 18 25
504 VLI Repair Grants 32 25 30 12 30
515 MF Direct Loans 70 60 70 48 65
514 Farm Labor Hsg. Loans 20 15 25 12.5 25
516 Farm Labor Hsg. Grants 10 7.5 10 0 7.5
521 Rental Asst. 1,488 1,608 1,690 1,684 1,691
523 Self-Help TA 32 25 32 20 25
533 Hsg. Prsrv. Grants 16 10 16 8 10
538 MF Guar. Loans 400 400 400 400 400
542 Vouchers 48 48 38(b) 54 50.4
Rental Prsrv. Demo (MPR) 36 34 90 28 36
Rental Prsrv. TA 2 1 0 0 2(d)
Rural Cmty. Dev’t Init. 6 5 6 4 5(e)
Cmty. Facil. Direct Loans 2,800 2,800 1,250 1,000 $1,250
Cmty. Facil. Grants 25 5 22 (c) 5
   Tribal Colleges CF Grants 10 8 10 6 8
   Energy Cmties. Grants – – 10 – –
Cmty. Facil. Guar. 650 650 650 650 650

Abbreviations key

  • MF: Multfamily (Rental)
  • SF: Single-Family (Homeownership)
  • TA: Technical Assistance
  • VLI: Very Low-Income

(a) This column will be filled in as the FY25 funding process progresses.

(b) This $38 million is to renew vouchers already issued. Most tenants in USDA-financed rental properties where mortgages end or are paid off would receive Section 521 Rental Assistance under the Administration’s decoupling proposal. An additional $20 million is included in the HUD tenant protection vouchers account to provide new vouchers for tenants “in USDA properties that are unable to refinance, participate in the multi-family preservation and rehabilitation options, or decouple.”

(c) The amount proposed for non-earmarked Community Facilities grants in the House bill remains unclear after release of the committee’s report. It shows a grant level of $472 million, which includes Congressionally Directed Spending (earmarks).

(d) The Senate bill’s text shows $2 million for rental preservation TA, but the report accompanying the bill shows $1 million.

(e) The Senate bill’s text shows $5 million for RCDI, but the report accompanying the bill shows $1 million.

House Bill Proposes Cuts to Smaller Rural Housing Programs

UPDATE July 11, 2024 – On July 10 the full House Appropriations Committee approved its Agriculture appropriations bill for FY25. The full Senate Appropriations Committee has approved a bill as well, but has not yet released the full text. The Senate committee’s summary of its bill provides numbers for two of the rural housing programs: it says the bill includes $1 billion for Section 502 direct and $1.691 billion for Section 521 Rental Assistance.

On July 10, 2024, the full House Appropriations Committee is marking up appropriations bills for USDA, Transportation-HUD, and Labor. The committee has released its reports on these bills, which provide additional details that were not available at the subcommittee level.

The committee’s report on the USDA funding bill makes clear that, while the committee supports the larger rural housing programs such as Section 502 direct and guaranteed homeownership loans, Section 521 Rental Assistance, and tenant vouchers, it proposes cuts in the smaller programs, all of which are important to lower income rural residents.

In addition to the cuts in self-help, home repair, and rental housing noted below, the bill proposes no funding for Section 516 farm labor housing grants, which received $7.5 million this year. It would reduce Section 514 farm labor loans from $15 million in FY24 to $12.5 million in FY25. Section 514 loans were at $20 million in FY23.

The report also makes clear the scope of the proposed reductions in the Section 504 repair grants program, from $25 million in FY24 to $12 million in FY25, and the Section 533 Housing Preservation Grants program, from $10 million this year to $8 million next year. The FY24 levels for both of those programs were lower than their FY23 appropriations.

House Bill Proposes Rural Housing Cuts, Though Not for Purchase Mortgages or Rental Vouchers

June 11, 2024 — The House Appropriations Subcommittee released its fiscal year 2025 funding proposal for USDA on June 10, 2024, and will hold a markup at 6:00 pm Eastern time on June 11. As expected, the bill would fund most USDA housing programs at levels lower than those enacted for FY24 or proposed in the administration’s FY25 budget.

The House measure would increase Section 502 direct loans to $950 million, higher than the $880 million level for FY24 but not at the $1.25 billion provided in FY23 or requested in the FY25 budget. It would keep the Section 502 guaranteed loan program at $25 billion and Section 538 guaranteed multifamily loans at $400 million.

The bill appears to provide no funding at all for Section 516 farmworker housing grants, which are used by nonprofit developers alongside Section 514 loans.

Homeownership Housing

Despite its support for home purchase programs, the House bill would reduce funding for self-help housing, Section 504 home repair loans and grants, and Section 533 Housing Preservation Grants.

Rental Housing

The bill proposes cuts in rental preservation programs, reducing Section 515 loans from $60 million in FY24 to $48 million and the Multifamily Preservation and Revitalization (MPR) program from its current $34 million to $28 million. It shows some support for tenants, however, with Section 521 Rental Assistance funding almost at the level requested by the administration’s budget, an increase in Section 542 vouchers, and continuation of the 1,000-unit demonstration program that decouples Rental Assistance from USDA mortgages reaching the end of their terms.

Energy Efficiency

The House bill would prohibit use of any USDA housing funds to implement a recent determination made jointly by HUD and USDA that would require some federally supported new housing construction, including single-family homes supported by USDA’s Section 502 direct, Section 502 guaranteed, or Section 523 self-help programs, to meet updated energy efficiency standards. The ban, tucked into Section 743 in the bill’s “general provisions,” is reminiscent of an amendment defeated in the Senate in October 2023. That proposed amendment would have prevented HUD implementation of the same energy efficiency standards.

Community Facilities

The bill would cut funding for Community Facilities direct loans by two-thirds, from $2.8 billion in FY24 to $1 billion in FY25.

Administration Proposes Small Increases in Many Rural Housing Programs

The Biden Administration’s budget for fiscal year 2025, released on March 11, 2024, would hold funding at FY23 levels for most of USDA’s rural housing programs. In effect, it would restore the cuts made in the final FY24 appropriations bill, which was passed after the budget was prepared. Details are provided in the table below.

The recording and slides from HAC’s March 13 webinar on Rural Housing in the Fiscal Year 2025 White House Budget are posted here.

Homeownership Housing7

Like last year’s budget proposal, this year’s would eliminate subsidy “recapture” for the Section 502 direct program. Recapture requires that, when a low- or very low-income homeowner with a Section 502 direct loan sells the house or moves, they must repay the subsidy amounts they have received over the life of the loan. The administration estimates that eliminating this penalty for current borrowers would cost USDA $1.12 billion. It also proposes that Section 502 direct loans made in 2025 will not to be subject to recapture.

The budget would require that funding for housing construction or rehabilitation be targeted to projects that improve energy or water efficiency, implement green features, including clean energy generation or building electrification, electric car charging station installations, or address climate resilience of properties.

The budget also proposes three changes that were just adopted in the final FY24 funding bill, which had not been passed yet when the budget was prepared. These include extending the length of self-help and site-development loans from two years to five, and standardizing foreclosure procedures consistent with HUD’s.

Rental Housing

The administration again asks for legislative language to “decouple” Section 521 Rental Assistance from Section 515 and 514 mortgages, so that when a USDA rental housing mortgage ends for any reason, the tenants can continue to receive Rental Assistance. The final FY24 bill authorized a limited pilot to decouple up to 1,000 units of RA, but the budget does not propose any limits.

The budget requests Section 542 voucher funding be used only to renew “legacy vouchers,” $11.79 million in unobligated voucher funds be rescinded, and $20 million be added to provide HUD tenant protection vouchers for tenants “in USDA properties that are unable to refinance, participate in the multi-family preservation and rehabilitation options, or decouple.”

 

HAC News: July 3, 2024

/in ,

TOP STORIES

House proposes 60% cut in HOME funding

The FY25 Transportation-HUD spending bill approved by a House appropriations subcommittee on June 26 would shrink the HOME program to $500 million from $1.25 billion in FY24. The bill, which will be considered by the full Appropriations Committee on July 10, would cut the Self-Help Homeownership Opportunity Program (SHOP) program from $12 million in FY24 to $9 million next year. It would also block implementation of the Biden administration’s proposed Affirmatively Furthering Fair Housing rule and the recent energy efficiency determination made by HUD and USDA. Details are posted on HAC’s website. The Senate has not yet released its version of the bill.

Criminalization of homelessness is not cruel and unusual punishment, Supreme Court rules

People experiencing homelessness can be subjected to fines and jail time for sleeping in public, the Supreme Court ruled on June 28 in City of Grants Pass v. Johnson. In response to the decision, HAC issued a statement pointing out that the solution to homelessness is available, affordable housing and calling on local officials to reject the idea that homelessness is a crime.

Supreme Court strengthens courts’ role in agency rulemaking

The Supreme Court has overruled a longstanding doctrine under which courts deferred to executive agencies’ interpretations when they make regulations to carry out laws. The decision in Loper Bright Enterprises v. Raimondo, issued on June 28, held that courts must “exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.” On July 1, a separate decision in Corner Post v. Board of Governors of the Federal Reserve System greatly extended the time span within which agency regulations can be challenged in court.

Tenants bill of rights launched

The National Tenants Bill of Rights offered by the National Low Income Housing Coalition, the National Housing Law Project, and the Tenant Union Federation is intended to provide a practical policy agenda that affirms the federal government’s duty to provide all tenants with fundamental protections. It calls for tenants to have rights to a fair application, a fair lease, freedom from discrimination and harassment, a habitable home, and reasonable rent and costs, the right to organize, and the right to safeguards against evictions. The sponsoring organizations invite others to endorse it.

RuralSTAT

The states with the highest “housing wage” (the hourly income needed to afford a rental home at HUD’s fair market rent) in places outside metropolitan areas are Massachusetts, Hawaii, Alaska, Connecticut, Colorado, New Hampshire, California, Nevada, Vermont, and Washington. Source: National Low Income Housing Coalition, Out of Reach 2024: The High Cost of Housing.

OPPORTUNITIES

Owners of assisted multifamily properties eligible for solar and wind tax credits

Multifamily housing assisted by many (though not all) programs of HUD, USDA, and other agencies, as well as by the Low Income Housing Tax Credit, is eligible for the Department of Energy’s Low-Income Communities Bonus Credit, which promotes cost-saving solar or wind investments in low-income communities, on Indian land, as part of affordable housing developments, and benefiting low-income households. The credit is available as a payment even if the property owner does not have tax liability to offset. The initial application deadline has passed, but DOE is still considering applications on a rolling basis. HUD states that combined tax credits can potentially fund as much as 70% of the costs of a solar facility for assisted housing. HUD has posted the first two of a series of recordings to help rental property owners apply and DOE has posted webinar recordings and other resources.

USDA opens Native CDFI relending program

USDA’s Native Community Development Financial Institution Relending Demonstration Program will make loans to Native CDFIs that will relend the funds to low- and very low-income recipients to acquire, build, rehabilitate, improve, or relocate modest single-family homes on Tribal land in rural areas. The deadline is August 9.

HUD offers lead and healthy homes funding

The Lead and Healthy Homes Technical Studies Grant Program funds studies to improve knowledge of housing-related health and safety hazards and to improve or develop new assessment and control methods. A wide variety of types of entities are eligible. The application deadline is August 6.

The Healthy Homes and Weatherization Cooperation Demonstration is intended to determine whether coordination between HUD’s Healthy Homes Production program and the Department of Energy’s Weatherization Assistance Program achieves cost-effectiveness and better outcomes. Current holders of active DOE WAP grants or subgrants or HUD HHP grants are eligible. The deadline is August 13.

The Lead Hazard Reduction Grant Program assists localities in undertaking comprehensive lead-based paint hazard reduction programs. Local governments and some state and Tribal governments are eligible. The deadline is August 19.

REGULATIONS AND FEDERAL AGENCIES

Revised regulations proposed for Capital Magnet Fund

The CDFI Fund’s Capital Magnet Fund makes grants to CDFIs and nonprofits to attract private financing for and increase investment in affordable housing and economic development. A new interim rule is intended to streamline and update terms, concepts, and provisions; to better align the CMF with other federal housing assistance programs; and to better reflect current business practices in the affordable housing industry. The rule is effective immediately. Comments are due August 26.

Administration announces new CDFI Fund program

Treasury Secretary Janet Yellen announced a new three-year, $100 million CDFI Fund program but details are not yet available. A June 24 press release explains that the program will be funded by repayments of Emergency Capital Investment Program investments and will be “primarily focused on increasing the supply of affordable housing.”

USDA continues waiver for Section 504 repair pilot

USDA is extending a waiver of two regulatory requirements for the Section 504 Direct Single Family Housing Loans and Grants pilot program, which is taking place in 23 states. First, the agency continues to waive the requirement that the site not be large enough to subdivide under local zoning ordinances. Second, applicants under the pilot are not required to obtain an appraisal if the Section 504 loan is over $15,000, though appraisals will still be required in some circumstances. Both waivers are in effect through June 24, 2026. Other waivers that were tested when the pilot program began in 2019 have already been adopted in regulations, and the agency anticipates doing the same with these two.

HUD extends NSPIRE inspection rule compliance date again

October 1, 2025 is now the compliance date for the Housing Choice Voucher, Project Based Voucher, Section 8 Moderate Rehabilitation, HOME, Housing Trust Fund, Housing Opportunities for Persons With AIDS, Emergency Solution Grants, and Continuum of Care programs to implement the National Standards for the Physical Inspection of Real Estate (NSPIRE) final rule. The date for these programs was previously October 1, 2024.

New rule aims to protect workers from extreme heat

A proposed regulation from the Department of Labor would require employers to protect those who work both indoors and outdoors, including farmworkers, from extreme heat. Employers would have to develop plans and provide drinking water, rest breaks, and shade. A comment deadline will be set when the proposed rule is published in the Federal Register.

FEMA proposes updates to programs that assist governments

FEMA proposes to amend the regulations for its Public Assistance and Community Disaster Loan programs both to improve program administration and to incorporate statutory changes. The Public Assistance program assists state, Tribal, territorial, and local governments after major disasters. Community Disaster Loans are available for local or Tribal governments that suffer substantial revenue losses because of major disasters. Comments are due September 3.

Public participation in rulemaking will be listening sessions’ topic

The Office of Management and Budget will hold virtual listening sessions on July 10 and 17 for public input on experiences engaging with federal agency rulemaking processes. To register for a session, email publicparticipation@omb.eop.gov. Written comments are due July 17.

EVENTS

Rural Clean Energy Federal Funding Fair announced

USDA Rural Development will hold two webinars on July 11 to provide information about Department of Energy clean energy programs and USDA RD’s Energy for America Program (REAP) and electric programs.

PUBLICATIONS AND MEDIA

Rents remain out of reach, annual study says

The National Low Income Housing Coalition finds, as it has for many years, that there is no state, metropolitan area, or county in the U.S. where a fulltime worker earning minimum wage can afford a modest two-bedroom rental home at HUD’s fair market rent. In fact, according to Out of Reach 2024: The High Cost of Housing, this year there are only 204 counties nationwide, not including Puerto Rico, where a fulltime minimum-wage worker can afford a one-bedroom rent at fair market rent. People of color are disproportionately impacted. The report provides data for every state, county, and metropolitan area, as well as for the portion of each state outside metropolitan areas.

Podcasts focus on rural development

The Aspen Institute’s Community Strategies Group shared a blog listing 10 podcasts that focus on rural community and economic development. These podcasts amplify rural voices and bring in rural experts who talk about the successes, challenges, and opportunities in rural America. CSG asks people to contact them with suggestions for additions to the list.

HAC

HAC is hiring

HAC job listings, each with application instructions, are available on our website.

Need capital for your affordable housing project?

HAC’s loan fund provides low interest rate loans to support single- and multifamily affordable housing projects for low-income rural residents throughout the U.S. and territories. Capital is available for all types of affordable and mixed-income housing projects, including preservation, new development, farmworker, senior and veteran housing. HAC loan funds can be used for pre-development, site acquisition, site development, construction/rehabilitation and permanent financing. Contact HAC’s loan fund staff at hacloanfund@ruralhome.org, 202-842-8600.

Please note: HAC is not able to offer loans to individuals or families. Borrowers must be nonprofit or for-profit organizations or government entities (including Tribes).

Want to reprint a HAC News item?

Please credit the HAC News and provide a link to HAC’s website. Thank you!

GET THE HAC NEWS!

Sign-up for HAC information products

SIGN UP HERE
Link to: Impact

50 Years for Rural America

Over 50 years HAC has worked in every U.S. state and the territories. Learn more about what our work means for rural communities.

Board Portal

Housing Assistance Council   |  1828 L Street. N.W., Suite 505, Washington, D.C. 20036
(202) 842-8600  |  (202) 347-3441  |  hac@ruralhome.org

HAC is an equal opportunity provider, employer, and lender.