Reflections from long-time board members

/in ,

For over fifty years, the Housing Assistance Council has empowered rural communities with the resources they need to overcome their greatest housing challenges. That entire time, HAC’s Board of Directors has guided our approach and kept us true to our mission. Our board members have always represented the communities we work with across the country. The expertise they bring has proven invaluable time and time again.

At the National Rural Housing Conference in October 2023, we honored two long-time board members by presenting them with Rural Housing Service Awards as thanks for their combined 66 years of service to HAC. As they transitioned off the board, we asked Maria Luisa Mercado and Gideon Anders to reflect on the past, present, and future of HAC.

Maria Luisa Mercado, Lone Star Legal Aid

Galveston, Texas

Thirty-six years ago, when she was working as an assistant attorney general for consumer protection in Lubbock, Maria Luisa got a call from a colleague who said she’d be an ideal board member at HAC. For Maria Luisa, who grew up as a farmworker, “serving on a housing board, especially one with a rural focus, was really exciting.”

Housing is the core of what HAC does, but she explains that the real goal has always been to serve people and communities. After all, she says “if you can stabilize someone’s housing, you can change their life.” Staying true to this mission has been the core of HAC’s success, she argues. Over the last three decades, Maria Luisa has visited many of the communities with which HAC works, and the impact of our work is always clear. “You can concretely see the results: changing the life of someone,” she notes.

Looking to the future, Maria Luisa believes the defining challenge of the next few decades will be developing novel ways of encouraging the development of new affordable housing groups. As we expand the communities that we serve and develop new partners, building their capacity to make the most of the resources available to them will be crucial. She imagines a future in which HAC has expanded from a focus on housing to include community development and building the capacity of local communities and governments to access state and federal resources.

HAC has always been at the forefront of efforts to support rural communities’ housing and to bring attention to overlooked rural places. “It matters because rural America,” says Maria Luisa “if no one pays attention, is isolated from services.” And those services, like housing investment, are what any community needs to thrive. After more than five decades of serving rural America, Maria Luisa is proud to say that “HAC is still standing.”

Gideon Anders, Retired (formerly National Housing Law Project)

Oakland, California

Gideon Anders was hired by HAC in 1972—fewer than 8 months after we were founded. As Gideon explains, the HAC of 1972 was still figuring out how to operate: “we did a lot of things by the seat of our pants.” Quickly, though, we established the processes that HAC continues to build on to this day. “Our work is much more effective and reaches out to more organizations” than it once did, Gideon notes.

For the entirety of his time with HAC—both as a staff member and in his 30 years as a board member—something that hasn’t changed is that “there’s no one else providing the assistance that HAC is.” For example, we were one of the first organizations to offer predevelopment lending in rural communities, and our research—especially our flagship publication Taking Stock—fills a void in data and analysis about rural housing.

HAC is still providing resources to rural communities that few others do. To Gideon, HAC’s focus on the preservation of multifamily rental homes in the USDA’s Section 515 program is a key example of the “critical services which no one else is providing on the scale HAC is.” In 2022, for example, HAC closed a $7.8 million loan to Northwest Coastal Housing so they could purchase and preserve Golden Eagle II, a 33-unit USDA Section 515 property. Without our financing, the original property owner would have prepaid his USDA mortgage, making his tenants ineligible for the rental assistance they’d received for decades. But, thanks to this loan, Golden Eagle is staying in the program and the tenants will retain their affordability protections for decades.

Looking to the future, Gideon imagines a HAC that is bringing together organizations of all kinds to collectively make the argument that housing is central to individual and national prosperity. Our homes touch every other part of our lives, which is why Gideon wants to see these coalitions include community service providers of all stripes, including those focused on health. After all, when it comes to the impact on someone’s health, Gideon believes “quality housing comes next to healthcare.”

A lot has changed at HAC over the last 50 years. However, Gideon notes that, “fundamentally, the services HAC was providing in 1971 are still what we’re doing today. But the scope has grown tremendously.”

 

HAC News: January 18, 2024

/in ,

Vol. 53, No. 2

TOP STORIES

Federal funding expected through February

It seems likely that Congress will pass, and President Biden will sign, another continuing resolution setting two new deadlines for government funding. Agencies that are currently funded until January 19, including USDA and HUD, will continue to receive FY23 levels of support through March 1. The rest of the government will be funded through March 8 instead of February 2.

House and Senate leaders have agreed on the total dollar amounts to be appropriated, with total non-defense discretionary funding – the category that includes housing – to be cut less than 1% from FY23 levels. They have not yet determined how to divide it among federal agencies, so it is not clear whether the bills proposed last year for USDA and HUD will fit these caps or how funding for specific programs will be impacted.

Tax bill agreement supports LIHTC but omits rural boost

A bipartisan tax bill, announced on January 16, includes changes to increase the availability of Low Income Housing Tax Credits, but does not incorporate all the provisions of the Affordable Housing Credit Improvement Act (S. 1557 and H.R. 3238). One notable AHCIA provision that is not included in the new bill, but is supported in HAC’s 2024 Rural Housing Policy Priorities, would designate rural and Tribal places as Difficult Development Areas, giving their LIHTC properties a basis boost and enabling them to attract more resources. The bill also temporarily extends the Child Tax Credit, which helped decrease U.S. poverty when it was expanded during the coronavirus pandemic.

HAC sets 2024 policy priorities

The overarching themes of HAC’s 2024 policy priorities include the need for technical assistance and building the capacity of local affordable housing and community development organizations; expanding access to credit and finance; preserving rural rental housing; improving the quality, availability, and affordability of housing to buy and rent in rural places; and preserving, increasing, and tailoring resources for federal affordable housing programs serving rural populations.

RuralSTAT

USDA obligated 7,218 home purchase loans through its Section 502 direct loan product in FY23 – a 13% increase from FY22 levels. Source: HAC tabulations of USDA 205F and 205H reports.

OPPORTUNITIES

Indian housing funds available

Tribes and Tribally Designated Housing Entities that have ever been allocated HUD Indian housing formula funding are eligible to apply for competitive Indian Housing Block Grant funds. The deadline is March 19. For more information, email IHBGCompetitiveProgram@hud.gov.

Appalachian Gateway Communities Initiative seeks to leverage community assets for improvement

In partnership with the Appalachian Regional Commission and the National Endowment for the Arts, the Conservation Fund will select teams from Appalachian communities near publicly owned lands for the AGCI. The program leads the community teams through developing collaborative projects. After completing a training program, teams can apply for seed grant funding to help implement their action plans. Letters of interest are due January 24 and applications are due February 6. For more information, contact Susan Elks, the Conservation Fund, 610-563-1516.

REGULATIONS AND FEDERAL AGENCIES

HAC reports on USDA housing activity in FY23

HAC’s annual review of USDA housing obligations and historical trends shows that in FY23 the department obligated roughly 65,500 loans, loan guarantees, and grants totaling about $10.6 billion, and over $1.5 billion in Section 521 Rental Assistance to approximately 228,000 rural renters.

New cap on HUD income limit increases proposed

Every year, HUD adjusts the income limits that determine eligibility for housing aid. Since FY10, the annual increase has been capped at the higher of 5% or twice the percentage change in national median family income. HUD now proposes to cap the annual income limit increase at 10% and to continue not adjusting the limits for inflation. Comments are due February 8. For more information, contact Adam Bibler, HUD, 202-402-6057.

HUD proposes revisions for CDBG, ICDBG, and Section 108

Comments are due March 11 on changes intended to make it easier to use the Community Development Block Grant and the related Section 108 loan guarantee program as well as the Indian CDBG program. HUD’s proposal also would revise provisions related to Consolidated Plan and citizen participation requirements and would institute quarterly reporting. Comments are due March 11. Information contacts vary by program.

Manufactured Housing Consensus Committee nominations sought

HUD will accept nominations for committee membership through March 11. For more information, contact Teresa B. Payne, HUD, 202–402–2698.

USDA suggests changes to smoke alarm requirements

USDA, which already requires smoke alarms in its multifamily housing, is proposing to modify its Section 515 and 514/516 regulations to align with new statutory requirements for hardwired or 10-year non-rechargeable, sealed, tamper-resistant, battery-powered smoke alarm devices. Comments are due March 8. For more information, contact Barbara Chism, USDA, 202-690–1436.

Affordable Connectivity Program begins to wind down

The 2021 the Infrastructure Investment and Jobs Act revised and funded the Affordable Connectivity Program, which covers part of the monthly cost for internet service to low-income households. Since the program is not included in the Federal Communications Commission’s annual appropriations and has not received supplemental funding, it is expected to run out of money in April 2024. The FCC has begun winding down the program. It will stop processing new applications after February 7. Participants should receive notices from their internet providers explaining the support will end soon. For more information, consumers can visit www.fcc.gov/acp or call the ACP Support Center at 877-384-2575. A telecom news site reports that ACP’s end could also undermine the financial feasibility of the Broadband Equity Access and Deployment rural connectivity program.

Poverty guidelines get annual inflation adjustment

The national poverty guidelines, used as eligibility criteria for various federal programs, have been updated by the Department of Health and Human Services based on the 4.1% increase in the Consumer Price Index between calendar years 2022 and 2023. The poverty threshold for a four-person household in the 48 contiguous states and D.C. is now $31,200. The figures for Alaska and Hawaii are higher.

EVENTS

Webinar will cover rural fair housing planning

HUD’s Office of Fair Housing and Equal Opportunity will hold an online “office hour” session January 30 providing tips on conducting a fair housing planning for rural and small metropolitan jurisdictions. Questions and answers will be included. This webinar is part of a series of monthly fair housing planning office hours.

PUBLICATIONS AND MEDIA

New federal funds and programs offer significant resources to rural America, with some barriers

The Brookings Institution analyzed programs that received billions of dollars in pandemic-era economic stimulus legislation for infrastructure, clean energy, climate resilience, and more. The resulting report, What’s In It For Rural? Analyzing the Opportunities for Rural America in IIJA, CHIPS, and IRA, says that over $464 billion, or about 45% of the combined appropriations, present significant opportunities for rural America. Researchers identified 66 new rural-significant programs, and about 2% of the total funding is exclusively for rural places. At the same time, the report says, the number of programs and their designs can create barriers to access for rural communities with limited capacity. The report offers recommendations to maximize the programs’ rural benefits. A webinar on the study will be held January 31.

Rural employment hits pre-pandemic levels

A Daily Yonder analysis of November 2023 employment data found that employment levels for counties both in and outside metropolitan areas grew at about the same rate from mid-2020 to early 2022. Metro areas reached pre-pandemic employment in January 2022 and have continued to creep higher since then, but places outside metro areas have seen inconsistent job growth over the past two years. Counties depending on mining and natural resource extraction had the lowest recovery rate.

People with disabilities face continuing housing crisis

Priced Out: The Housing Crisis for People with Disabilities, a web resource produced by the Technical Assistance Collaborative and the Consortium for Constituents with Disabilities, was updated at the end of 2023 with the latest data on housing affordability for people with disabilities who rely on Supplemental Security Income. TAC reports that the 4.1 million people with disabilities ages 18 to 64 who receive SSI still cannot afford an apartment in any housing market in the U.S. without rental assistance, which is often unavailable. Data are provided for metro areas, states, and places outside metro areas aggregated by state.

Inadequate housing impacts the racial wealth gap

A new report from the Urban Institute, Implications of Housing Conditions for Racial Wealth and Health Disparities, highlights that inadequate housing conditions impact housing value for Black homeowners, contributing to the racial wealth gap often attributed to differing homeownership rates. Recommended policy changes to address these issues include support for renovation assistance.

Article examines population loss and ways to reverse it

The Long Decline: How Depopulation Hurts Alabama’s Rural Communities is the first in a series of Alabama Reflector articles describing demographic decline in the state’s rural Black Belt region. The story details the factors driving the decline and the efforts being made to change these trends.

HAC

HAC’s office has moved

HAC’s new street address, effective on January 1, 2024, is 1828 L Street, N.W., Suite 505, Washington, DC 20036. Our phone number remains 202-842-8600.

HAC is hiring

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!

 

 

HAC News: January 4, 2024

/in ,

Vol. 53, No. 1

TOP STORIES

Next appropriations crisis deadline is January 19

When the Senate and House reconvene on January 8 and 9, they will face two upcoming deadlines for fiscal year 2024 funding. The continuing resolution that is currently in effect split the 12 federal appropriations bills into two groups. Four of them – USDA, Transportation-HUD, Energy, and Veterans – expire on January 19, while the rest end on February 2. The Senate has passed funding measures for both USDA and HUD, each of them considerably different from its House counterpart. The House failed to pass its USDA bill and has not yet voted on HUD.

Congress could enact individual appropriations bills, minibuses, an omnibus, another short-term continuing resolution, or a CR that covers the remainder of the fiscal year, or it could allow all or part of the federal government to close. The Fiscal Responsibility Act, the debt ceiling compromise negotiated in spring 2023 that includes reductions in federal spending, requires funding cuts if full-year appropriations bills are not enacted by April 30, but the dollar amounts cannot be calculated yet, as explained in an OMB memo to heads of federal agencies.

January is National Poverty Awareness Month

The Census Bureau reports that the official poverty rate in 2022 was 11.5%, with 37.9 million people in poverty. Using the Supplemental Poverty Measure, which accounts for assistance and expenses that are not included in the official poverty measure, the 2022 poverty rate was 12.4%. The SPM child poverty rate more than doubled from 5.2% in 2021 to 12.4% in 2022.

RuralSTAT

Rural poverty rates, for all races and ethnicities, exceed those of their suburban or urban counterparts. One out of every three Black or Native rural Americans lives in poverty. These poverty levels are more than twice as high as the national poverty rate of 12.6%. Rural Hispanics, Native Hawaiian and Pacific Islanders, persons of two or more races, and those who identify as other races all have poverty rates at 20% or higher. Source: HAC tabulations of the U.S. Census Bureau’s 2017-2021 American Community Survey. To learn more about poverty and other economic conditions in rural America visit HAC’s Taking Stock report.  

OPPORTUNITIES

HAC invites proposals for Affordable Housing for Rural Veterans grants

HAC’s Affordable Housing for Rural Veterans Initiative supports local nonprofit housing development organizations that meet or help meet the affordable housing needs of veterans with low incomes in rural places. Grants typically range up to $30,000 per organization and must support bricks-and-mortar projects that assist low-income, elderly, and/or disabled veterans with critical home repair, make accessibility modifications, support homeless veterans, help veterans become homeowners, and/or secure affordable rental housing. The AHRV Initiative is funded through the generous support of The Home Depot Foundation. Applications are due by 4:00 pm Eastern on Monday, January 22. For more information, contact HAC staff, ahrv@ruralhome.org. No phone calls please. Program staff will be available to answer questions during a webinar on January 10.

HUD launches Energy and Water Benchmarking

HUD’s new Energy and Water Benchmarking Service is available for properties participating in its project-based rental assistance programs. Property owners will receive data on energy and water consumption at their properties, as well as technical assistance and training. HUD intends the data to help identify opportunities for energy efficiency improvements and assess rehabilitation efforts that may be eligible for grant or loan funding under HUD’s Green and Resilient Retrofit Program or other sources of funding. HUD’s contractor, Leidos, will be contacting property owners to discuss the program. Owners may also contact HUD at mfbenchmarking@hud.gov to participate.

Resilience funding for government agencies available

FEMA’s Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Revolving Loan Fund Program will make grants to state, territorial, and Tribal governments to capitalize revolving loan funds that will help local governments reduce risks from disasters, natural hazards, and other related environmental harm. Applications are due April 30. For more information, contact FEMA staff, FEMA-STORMRLF@fema.dhs.gov.

ConnectHomeUSA broadband program expanding

HUD hopes to add urban, rural, and Tribal communities to CHUSA, which provides technical assistance and information to help PHAs and Tribes improve broadband connectivity and use in HUD-assisted housing. Applications are due February 15. HUD will hold a webinar for applicants on January 11. For more information, email ConnectHome@hud.gov.

USDA hiring Climate Change Fellows

Forty Climate Change Fellows with a range of skills are needed to help with applications from farmers, ranchers, and rural small businesses seeking funding for clean energy projects under the Rural Energy for America Program. Three of the fellows will work remotely, reporting to USDA RD’s national office; 36 will be based in offices around the country and one in Puerto Rico. Initial appointments may be for up to two years, with extensions possible. USDA’s search is part of a broader American Climate Corps effort involving several government agencies, which will hold listening sessions and accept written comments through January 31.

AARP award to honor nonprofit founders

The AARP® Purpose Prize® will honor people age 50-plus who founded nonprofit organizations at age 40 or older and are still active. Awardees’ organizations will receive $50,000 as well as a year of supports and resources to help broaden their impact. Applications are due February 29.

REGULATIONS AND FEDERAL AGENCIES

Compliance dates extended for HOTMA income calculation rule

HUD’s Community Planning and Development office has extended the date for its programs to comply with the final rule on tenant income and assets under the Housing Opportunity Through Modernization Act of 2016 (HOTMA). CPD’s notice sets January 1, 2025 as the compliance date for the HOME, HOME-ARP, Housing Trust Fund, HOPWA, CDBG, Emergency Solution Grants, and Continuum of Care programs, as well as CPD programs funded through competitive processes. PIH Notice 2023-27 makes the same change for PHAs, and PIH Notice 2023-34 extends the deadline for the Indian Housing Block Grant program.

USDA RD announces new appointments

Sarah Dietch has been named Rural Development Chief of Staff. She has served most recently at the U.S. Peace Corps, and previously held senior roles at USDA RD and other federal agencies. Betsy Dirksen Londrigan, who has been RD’s State Director for Illinois since January 2022, will become the Rural Business-Cooperative Service Administrator when Dr. Karama Neal leaves the position in mid-January. Their appointments and others were announced in late December.

Treasury seeks input on financial inclusion strategy

The Treasury Department requests comments by February 20 to help develop a national strategy to broaden access to financial services among underserved communities and improve their ability to use financial tools and services. For more information, contact Natalia Li, Treasury, 202-622-1388.

HUD issues Buy America guidance for public housing

PIH Notice 2024-01 explains application of the Buy America requirements for PHAs. It does not apply to Tribes or Tribal entities.

Summer Meals for Children planning underway

States, Tribes, and territories can opt in to the Summer Meals for Children program offered by USDA’s Food and Nutrition Service. In addition to the traditional congregate summer meals program, some program operators now have the option to provide “grab and go” or home-delivered meals. A list of participating states and links to more information are posted here. Videos on the program are available in English (USDA Secretary Tom Vilsack) and Spanish (Deputy Secretary Xochitl Torres Small).

PUBLICATIONS AND MEDIA

Guides help older adults evaluate housing choices

The Consumer Financial Protection Bureau has published four free guides for older homeowners making decisions about their homes: “Leaving Your Home to Children or Heirs,” “Making Housing Decisions after Losing a Spouse or Partner,” “Making Housing Decisions when your Health Changes,” and “Using Home Equity to Meet Financial Needs.”

Renewables work well with resident-owned cooperatives

Grist reports on the benefits of resident-owned cooperatives in building climate resiliency. The article, titled How Mobile Home Co-Ops Provide Housing Security – and Climate Resilience, explains that owners are able to upgrade infrastructure quickly, while the co-op provides a community and shared knowledge and resources to invest in climate-friendly projects that reduce utility costs.

Residents fight to save historic Black communities

An Associated Press article and video highlight residents struggling to preserve the remaining historic Black communities, defined as settlements founded by formerly enslaved people. Approximately 1,800 Black historic settlements once existed in the U.S., but now fewer than 30 incorporated historic Black towns remain. Residents of Daufuskie Island, South Carolina; Eatonville, Florida; and other historic Black communities fight against zoning ordinances, home devaluations, and private developers to preserve their homes, communities, and cultures.

Advocates hope to include farmworkers’ rights and protections in the next Farm Bill

Farmworker groups and other organizations are working to include farmworker protections, such as safer working conditions, higher minimum wages, and overtime pay, in the next Farm Bill, according to a Modern Farmer article. Advocates hope their cause will be helped by the additional time provided when the current Farm Bill was extended through September 30, 2024. Since labor rights are outside the USDA’s jurisdiction, historically farmworker rights – along with housing provisions – have been excluded from the Farm Bill since its inception in 1933. To describe what farmworker advocacy can achieve, the article cites New York state’s recent Farm Laborers Fair Labor Practices Act, which grants labor rights such as collective bargaining and overtime pay to farmworkers.

Toolkit shows how energy efficiency can reach underserved residents, including rural

The American Council for an Energy-Efficient Economy offers a toolkit titled Adapting Energy Efficiency Programs to Reach Underserved Residents. It highlights strategies that utilities and third-party program administrators can use to expand energy-efficiency program participation among all underserved households, with specific guidance on reaching income-eligible households, renters and residents of multifamily buildings, and rural communities. Strategies are rated by feasibility and by impact.

HAC

HAC’s office has moved

HAC’s new street address, effective on January 1, 2024, is 1828 L Street, N.W., Suite 505, Washington, DC 20036. Our phone number remains 202-842-8600.

HAC is hiring

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!

 

HAC News: December 19, 2023

/in ,

Vol. 52, No. 25

TOP STORIES

RHS Reform Act introduced in House

On December 14, Reps. Emanuel Cleaver (D-Mo.) and Blaine Luetkemeyer (R-Mo.) introduced H.R. 6785, the Rural Housing Service Reform Act, a companion bill to S. 2790, introduced in September by Senators Tina Smith (D-Minn.) and Mike Rounds (R-N.D.).

Homelessness rises nationwide and in rural places

HUD data from January 2023 show the largest number of people in the U.S. experiencing homelessness since reporting began in 2007. The tally increased 12% nationwide from 2022 to 2023, according to the 2023 Annual Homeless Assessment Report: Part 1: Point-in-Time Estimates. HUD suggests major drivers of this growth were changes in the rental housing market and the winding down of pandemic protections and programs, noting a particularly sharp rise in the number of people who became homeless for the first time. Eighteen percent of all individuals experiencing homelessness in 2023 were in largely rural Continuums of Care. For individuals, these CoCs saw a 7.4% increase in sheltered homelessness and 17.8% growth in unsheltered homelessness from the previous year. The pattern was somewhat different for families with children in largely rural CoCs, with a 7.4% drop in unsheltered families and a 7.5% increase in sheltered families. Overall, more than a third of all people in families experiencing unsheltered homelessness were in largely rural CoCs.

President tells federal agencies to support Tribal sovereignty and self-determination

An executive order issued by President Biden on December 6 affirms support for “the next era of Tribal self-determination” by designing and administering federal funding and support programs for Tribal Nations in a manner that better recognizes and supports Tribal sovereignty and self-determination. OMB and the White House Council on Native American Affairs will coordinate collection of information on funding needs, and federal agencies are directed to improve program administration.

Cross-sector group encourages FHFA to use updated energy codes

Nearly 80 consumer, energy, housing, health, manufacturing, and environmental organizations, including HAC, sent a letter on November 30 asking the Federal Housing Finance Agency to require that all new homes with mortgages backed by Fannie Mae and Freddie Mac meet updated energy codes. HAC policy director Jonathan Harwitz also coauthored a recent opinion piece in Multi-Housing News urging FHFA to adopt these standards. The letter to FHFA notes that updating energy codes would lower home costs, increase disaster resilience, improve health outcomes, reduce emissions, and reduce default risks. It also points out that action by FHFA would create consistent energy requirements for nearly all federally backed mortgage financing. HUD and USDA are moving towards adoption of these codes for some of the housing they finance, and HAC submitted a comment letter in August, signed by over 80 organizations from around the country, supporting their actions.

Happy holidays from HAC!

The board and staff of the Housing Assistance Council wish peace, prosperity, and affordable housing to all!

HAC will be closed from December 23 through January 1.

RuralSTAT

The median household income in the United States in 2021 was $70,784 while the rural median household income was below $59,000. A higher proportion of low-paying jobs in rural areas, combined with older age dynamics and lower educational attainment levels, are substantial factors in this income gap. Source: HAC tabulations of the U.S. Census Bureau’s 2017-2021 American Community Survey.

OPPORTUNITIES

HAC invites proposals for Affordable Housing for Rural Veterans grants

HAC’s Affordable Housing for Rural Veterans Initiative supports local nonprofit housing development organizations that meet or help meet the affordable housing needs of veterans with low incomes in rural places. Grants typically range up to $30,000 per organization and must support bricks-and-mortar projects that assist low-income, elderly, and/or disabled veterans with critical home repair, make accessibility modifications, support homeless veterans, help veterans become homeowners, and/or secure affordable rental housing. The AHRV Initiative is funded through the generous support of The Home Depot Foundation. Applications are due by 4:00 pm Eastern on Monday, January 22. For more information, contact HAC staff, ahrv@ruralhome.org. No phone calls please. Program staff will be available to answer questions during a webinar on January 10; check online for registration details.

Service coordinator funding available from HUD

Applications are due March 11 for the Service Coordinators in Multifamily Housing program, which supports service coordinator positions for elderly individuals and non-elderly persons with disabilities living in properties assisted through the Section 202, project-based Section 8, or Section 221(d)(3) below-market interest rate programs. For more information, contact Oluwayemisi Oni, HUD, ServiceCoordinatorNOFO@hud.gov.

HUD extends a Green and Resilient Retrofit Program deadline

The application deadline for wave 3 of the GRRP Elements cohort is now March 28 rather than January 4. Elements funding can be used to add efficiency and resilience investments to rehabilitation projects that are in their final planning stages. For more information, email GRRP@hud.gov or join weekly office hours on Wednesdays (except for December 27).

Deadline extended for farm lending discrimination assistance

USDA will accept applications through January 13 for the Discrimination Financial Assistance Program, which offers financial assistance for farmers, ranchers, and forest landowners who experienced discrimination in USDA farm lending programs prior to January 2021.

USDA reopens broadband funding availability, requires applicants to resubmit

The Rural Utilities Service has revised the definition of eligible service areas in the funding notice for its Community Connect Grant program. Those who applied under the notice published on March 20, 2023 must reapply. Applications are due February 20. Nonprofits, for-profits, and state, local, and Tribal governments are eligible. For more information, contact Randall Millhiser, USDA, 202-578-6926.

REGULATIONS AND FEDERAL AGENCIES

Senate committee supports Gooden for Under Secretary, RD names Denton to multifamily post

By a 23-0 vote on December 6, the Senate Agriculture Committee recommended the Senate approve Basil Gooden as USDA’s Under Secretary for Rural Development.

Angilla Denton, who has worked for Rural Development since 2002 and is currently RD’s Chief Risk Officer, has been selected to serve as the Rural Housing Service Deputy Administrator for Multi-Family Housing, effective December 31, 2023.

Pilot program will apply to Section 502 direct loans and community land trusts

USDA has launched a two-year pilot program to test alternative eligibility criteria for community land trust organizations. Community land trust sites are already eligible for Section 502 direct mortgages, but USDA’s notice explains that the community representation requirements are prohibitive for some affordable housing providers also acting as CLTs. The new pilot will test two waivers related to community representation. Affordable housing providers can apply to USDA RD state offices to participate. For more information, contact Jeremy Anderson, USDA, 202-302-3092.

Waivers for some Native programs in future disaster areas announced

Waivers and flexibilities from HUD requirements for the Indian Housing Block Grant, Indian Community Development Block Grant, and Native Hawaiian Housing Block Grant will apply for grantees in areas covered by presidentially declared disasters during calendar years 2024 and 2025. Grantees may also request a waiver or flexibility of a HUD requirement not listed in this notice. These provisions do not apply to Covid-relief related programs because HUD has issued separate waivers and alternative requirements that apply to those programs. For more information, contact Hilary Atkin, HUD, 202-402-3427.

HUD explains small rural PHA assessments

Notice PIH 2023-33 describes how HUD will implement assessments of public housing properties run by small rural PHAs. It explains the definition of “small rural,” how the list of such PHAs will be updated, the assessment process, financial data submissions, and more. For more information, contact Lara Philbert, HUD, 202-475-8930.

VA seeks comment on minimum property requirements

The Department of Veterans Affairs is considering changing the minimum property requirements for VA-guaranteed and direct loans. It requests public input regarding improvements, including whether VA should consider aligning its approach with other industry-wide property standards already in existence. Comments are due February 9. For more information, contact Stephanie Li, VA, 202-632-8862.

Federal agencies call for housing providers to help fight the overdose epidemic

HUD, the White House Office of National Drug Control Policy, and the U.S. Department of Health and Human Services issued a joint statement urging public health departments and housing providers to make overdose reversal medications readily available at assisted housing facilities.

EVENTS

Homeless Persons’ Memorial Day is December 21

National Homeless Persons’ Memorial Day takes place annually on December 21, the longest night of the year. The National Coalition for the Homeless, the National Consumer Advisory Board, and the National Health Care for the Homeless Council offer an organizing manual to help communities hold memorial events or take other steps to remember people experiencing homelessness who have died in the past year. They are also collecting the names of those being honored.

National Alliance to End Homelessness launches course on providing trauma-informed care

The new online course, Providing Trauma-Informed Care in Homeless Response, covers the causes and effects of trauma and how to integrate this care into homeless response.

PUBLICATIONS AND MEDIA

U.S. not ready to provide housing and care for elders in coming decade

Housing America’s Older Adults 2023, a new report from Harvard’s Joint Center for Housing Studies, highlights housing statistics and conditions for the country’s growing older adult population, ages 65 and older. An all-time high of 11.2 million older adult households are housing cost burdened. Rural communities have higher concentrations of older adults, 40% of whom have annual incomes under $30,000. Racial homeownership and income gaps persist in the older adult population. Black and Hispanic older adults have less income and home equity than white seniors.

Housing shortages lead to healthcare worker shortages

Housing Shortages Are Making Recruitment and Retention Even More Challenging for Some Rural Healthcare Providers, an article on the Rural Health Information Hub, reports that towns without available rental and homeownership housing cannot find or keep much-needed workers in fields like health and education. The article relies on information from HAC, among others, about the shortfall.

Research identifies flood-prone “Climate Abandonment Areas”

The First Street Foundation has designated Climate Abandonment Areas in the contiguous United States, locations where population loss from 2000 to 2020 can be directly attributed to climate change related flood risk. First Street found that 113 million people live in areas where flood risk has already been impacting housing choice. The most extreme cases, Climate Abandonment Areas, saw a cumulative net loss of over 3.2 million in population in the last two decades, directly attributed to flooding. The report, Integrating Climate Change Induced Flood Risk into Future Population Projections, published in Nature-Communications, projects that over the next 30 years, the current Climate Abandonment Areas will continue to lose population while other flood risk places will begin losing residents and then will become Climate Abandonment Areas.

HAC

HAC’s office is moving

After 43 years in our current D.C. location, HAC is moving. Our new street address, effective on January 1, 2024, will be 1828 L Street, N.W., Suite 505, Washington, DC 20036. Our phone number will remain 202-842-8600.

HAC is hiring

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!

 

Disaster Updates and Resources from HUD and FEMA

/in ,

New CDBG-DR Notice Published

HUD has published the Allocations for Community Development Block Grant Disaster Recovery (CDBG-DR) and Implementation of the CDBG-DR Consolidated Waivers and Alternative Requirements Notice.

In November 2023, HUD allocated $142 million in CDBG-DR funds appropriated by the Disaster Relief Supplemental Appropriations Act, 2023 for major disasters occurring in 2022 and 2023.

This Allocation Announcement Notice (AAN) identifies grant requirements for these funds, including requirements in HUD’s CDBG-DR Consolidated Notice (“Consolidated Notice”) found in Appendix B, and a limited number of amendments to the Consolidated Notice that apply to CDBG-DR grants for disasters occurring in 2022 and 2023.

The Consolidated Notice, as amended by this AAN, includes:

  • Waivers and alternative requirements
  • Relevant regulatory requirements
  • Grant award process
  • Criteria for action plan approval
  • Eligible disaster recovery activities

Please note that grantees who have been allocated funds for disasters occurring in 2022 and 2023 must follow the Duplication of Benefits (DOB) requirements located in section IV.A. of this notice and IV.A. of the Consolidated Notice.

Please read the entire notice for more information.

Please visit HUD’s Website for CDBG-DR, and CDBG Mitigation (CDBG-MIT) resources, tools, and training. Also search the Disaster Recovery Tools and Templates Library for additional information.

New Federal Emergency Management Agency (FEMA) Emergency Declarations

Please review the disaster declaration for the availability of individual assistance.

FEMA’s Center for Domestic Preparedness (CDP)

FEMA National Preparedness Report Released: FEMA released the 2023 National Preparedness Report, highlighting the state of the nation’s preparedness at all levels of government while examining the risks the nation faces and the capabilities available to address them.

More Emergency and Disaster Preparedness Training Materials

Please visit HUD’s website for emergency and disaster preparedness group education materials. These are available to HUD certified housing counselors to customize as part of their group education for HUD clients.

Policy News town

HAC Comments on Duty To Serve Plan Modifications – December 2023

/in , , ,

The Federal Housing Finance Agency (FHFA) put out a call for comments on the Enterprises’ (Fannie Mae and Freddie Mac’s) proposed 2023 Duty to Serve Plan modifications. Both Enterprises proposed cutting a variety of their loan purchase goals in rural areas, citing market conditions as the justification. HAC pushed back on these proposed cuts in our comments. Specifically, HAC made in following points in our comment:

  • HAC is generally agnostic as to which section of Freddie Mac’s Duty to Serve plan USDA Section 515 purchases fall under, but strongly supports their continued inclusion and tangible results. We support mainlining the Section 515 purchases currently included in the rural section of the plan because they focus on rural-targeting of properties.
  • HAC opposes cuts to loan purchase goals in high-needs rural regions and from small, rural financial institutions.
  • HAC opposes cuts to loan purchase goals for manufactured housing communities.
  • HAC supports Fannie Mae’s new proposed objective to better serve the manufactured housing needs of Native communities.
  • HAC support permitting the Enterprises to make equity investments in CDFIs – a decision which relies on approval from the FHFA.
HAC DTS Plan Modification Comments 12.06.23 FINAL
Policy News from the Administration

HAC Comments on OMB Guidance on Grants and Agreements – December 2023

/in , , , ,

The Office of Management and Budget (OMB) put out a call for comments on their guidance for Grants and Agreements, with a lens toward making grants processes more equitable. HAC submitted comments in support of more proactive geographic equity in the federal grants process. In addition to recognizing capacity building and access to capital as two essential equity issues in rural places, HAC’s comments focused on the recommendations below.

  • Instituting a Rural Impact Analysis for New Regulations
  • Investing in Capacity Building and Rural Intermediaries
  • Eliminating, Reducing or Modifying Cost-sharing and Matching Requirements that Disparately Impact Rural Communities
  • Streamlining and Increasing Uniformity in Applications
  • Including or Increasing Administrative and Predevelopment Costs as Eligible Activities in Rural Places
  • Recognizing the Rural Challenges in Metrics and Data Reporting
HAC Comments on OMB Guidance on Grants and Agreements 12.04.23

HAC News: November 30, 2023

/in ,

Vol. 52, No. 24

TOP STORIES

HAC provides preliminary analysis of new CRA rule’s rural implications

The new Community Reinvestment Act rule announced in October includes some important provisions for rural housing and community development. A new post on HAC’s website offers a preliminary look at these changes. For example, community development and retail lending are now given equal weight in the exams for large and intermediate sized banks. Also, it is now clear that all of a bank’s community development activities, even those not located in the bank’s defined Assessment Areas, count for CRA purposes. Other revisions are explained as well.

Research posters from HAC conference posted online, awards announced

Explore research posters online from the 2023 National Rural Housing Conference’s research poster session! The posters examine some of the most pressing issues facing rural America. HAC is thrilled to announce our poster contest award winners:

Fannie Mae extends pilot that reports positive rent payments to credit bureaus

Fannie Mae’s Positive Rent Payment pilot is being extended through December 2024, after its first year saw credit scores increase for almost 58% of participants. Fannie Mae will cover the costs of collecting and disseminating rent payment data for a 12-month period for multifamily property owner/operators of Fannie Mae financed properties who use an approved vendor to collect the data. Owners can enroll online. An explanation for renters is also posted online.

RuralSTAT

Rural America has historically had high homeownership rates. Rates in rural places and nationwide, however, are substantially lower for nonwhite residents than for white non-Hispanic households. Source: HAC tabulations of the U.S. Census Bureau’s 2021 American Community Survey.

OPPORTUNITIES

Environmental justice grants competition opens

EPA’s Community Change Grants program offers funds for environmental and climate justice activities to benefit disadvantaged communities through projects that reduce pollution, increase community climate resilience, and build community capacity to address environmental and climate justice challenges. Eligible applicants are community-based nonprofit organizations that partner with other CBOs, Tribes, local governments, or institutions of higher education. One of the program’s two tracks offers the option to focus on Tribes, U.S. territories, small unincorporated areas, or communities near the U.S.-Mexico border. Technical assistance is available. Applications will be accepted and reviewed on a rolling basis until November 21, 2024. For more information, email CCGP@epa.gov.

Grants offered for states and Tribes to create home efficiency rebate programs

State energy offices and Tribal entities are eligible for Department of Energy grants to create programs for Home Electrification and Appliance Rebates for high-efficiency electric homes and Home Efficiency Rebates for energy-saving retrofits in single-family and multifamily buildings. Rolling application processes are now open for states for both programs, and for Tribes for the Home Electrification and Appliance Rebates program. The American Council for an Energy-Efficient Economy offers information on ways to make these programs work for low-income residents.

Guidance available on tax credits for energy efficiency and community energy projects

The 2022 Inflation Reduction Act created new tax credits and improved existing ones for both property owners and builder/developers, for both housing retrofits and new construction. An overview of new programs is offered by Novogradac. A more detailed chart, published by Home Innovation Research Labs, covers eligibility, requirements, possible combinations with other programs, and more. A Treasury Department post focuses on use of these resources for multifamily housing.

The Section 45L New Energy Efficient Home Tax Credit for developers, including those using the Low Income Housing Tax Credit, is summarized by Novogradac and IRS guidance is offered in Notice 2023-65.

The Department of Energy continues to accept applications for the Low-Income Communities Bonus Credit program, which provides up to a 20 percentage point boost to the Investment Tax Credit for qualified solar or wind facilities in low-income communities. The IRS released final rules and guidance on the program, also called Section 48(e), in August.

Nominations open for historic preservation award

The Advisory Council on Historic Preservation and HUD offer the 2024 ACHP/HUD Secretary’s Award for Excellence in Historic Preservation, which will recognize developers, organizations, and agencies for success in advancing historic preservation goals while providing affordable housing and/or expanded economic opportunities for low- and moderate-income people. Eligible projects must promote the use of historic buildings for affordable housing, community development, and/or expanded economic opportunities; include HUD funds, financing, or other assistance; meet preservation guidelines; and contribute to local and/or Tribal community revitalization efforts. Nominations are due December 18.

REGULATIONS AND FEDERAL AGENCIES

Revisions proposed for Section 502 direct, Section 504, and Section 306C

USDA proposes to amend the regulations for these programs “to reduce the regulatory burdens on applicants, borrowers, and partners by enhancing program delivery, expanding customer service, promoting consistency between the direct and guaranteed SFH loan programs where feasible and aligning the programs with current housing market conditions and mortgage loan practices.” Comments are due January 19. For more information, contact Sonya Evans, USDA, 423-268-4333.

HUD proposes eviction notice for assisted tenants

A proposed rule would require that when tenants who live in public housing or in properties receiving HUD project-based rental assistance face eviction for nonpayment of rent, PHAs and owners would need to provide written notice at least 30 days before beginning a formal eviction procedure. Comments are due January 30. Contacts for more information vary by program and are listed in HUD’s notice.

Treasury clarifies timing for spending Coronavirus State and Local Fiscal Recovery Funds

In an interim final rule, the Treasury Department proposes to amend the definition of “obligation” in its regulations for the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund. The changes, which will clarify when monies must be committed and spent, are effective November 20, but Treasury will accept comments until December 20. For more information, contact Jessica Milano, Treasury, 844-529–9527.

EVENTS

HUD to offer “Manufactured Housing and Tribal Communities” webinar

The session, set for December 6, will discuss specific considerations and recommendations for Tribal grantees interested in developing manufactured housing. It is the latest in a series of HUD manufactured housing webinars. Recordings and materials of past sessions will be posted online.

PUBLICATIONS AND MEDIA

USICH releases homelessness research agenda

On November 30, the U.S. Interagency Council on Homelessness published the first federal homelessness research agenda in more than a decade. The document, titled From Evidence to Action, is intended to shape federal investments in homelessness research and offer a roadmap to understand what works to prevent and end homelessness in the United States. It acknowledges that guidance must be tailored for specific populations and geographies including remote, rural, and Tribal lands.

ERS publishes rural data overview

USDA’s Economic Research Service has released its 2023 Rural America at a Glance report. The annual publication describes important demographic, economic, social, and housing trends over the last year. This year it shows that rural employment and annual growth rates are nearly back to pre-pandemic levels. A recorded webinar covering the report will also be available online.

HAC

HAC’s office is moving

After 43 years in our current D.C. location, HAC is moving. Our new street address, effective on January 1, 2024, will be 1828 L Street, N.W., Suite 505, Washington, DC 20036. Our phone number will remain 202-842-8600.

HAC is hiring

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!

 

The New CRA Rule: A Preliminary Look at Potential Implications for Bank Investment in Rural Community Development

/in , ,

On October 24, 2023, the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, and the Federal Deposit Insurance Corporation (FDIC) issued a final rule overhauling the regulations that implement the Community Reinvestment Act (CRA), which encourages federally insured banks to meet the credit needs of the communities in which they do business, especially low- and moderate-income (LMI) communities. This is the most significant joint effort in over three decades to modernize the way regulators evaluate bank performance under the CRA.

HAC is committed to helping our partners understand the potential impact of this new CRA rule. The rule, however, is nearly 1,500 pages in length, is highly complex, and will take effect over a nearly three-year period. Accordingly, this and forthcoming analyses must be considered preliminary.

The Evaluation Framework

Banks receive CRA ratings of “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Non-Compliance.” The final rule continues the regulators’ longstanding approach of tailoring the CRA examination tests to bank size and type.[1] The final rule raises the current asset threshold for each of the bank size categories.

  • Large Banks (over $2 billion in assets) are subject to two tests of equal weight.
    • A Retail Lending Test evaluates a bank’s origination and purchase of loans, including home mortgage loans and multifamily loans if it offers them.
    • A Community Development (CD) Test consists of a CD Financing Subtest (40 percent of the total) and a CD Services Subtest (10 percent of the total).
    • A HAC analysis in 2016 found that 2.4 percent of banks headquartered in rural or small-town census tracts that consistently received “Outstanding” or “Satisfactory” ratings were subject to the large bank exam.
  • Intermediate Banks ($600 million-$2 billion in assets) are also subject to equally weighted Retail Lending and CD Tests.
    • The Retail Lending Test evaluates a bank’s origination and purchase of loans, including home mortgage loans and multifamily loans if it offers them.
    • Intermediate Banks may opt in or out of the new rule’s CD Test and CD Financing and CD Services Subtests.
    • Intermediate Banks that opt out are subject to the current CD Test, which has three subtests:
      • CD Lending
      • CD Investment
      • CD Services
    • HAC’s 2016 analysis found that 5.4 percent of banks headquartered in rural or small-town census tracts which consistently received “Outstanding” or “Satisfactory” ratings were subject to the intermediate bank exam (then known as the intermediate small bank exam).
  • Small Banks (less than $600 million in assets) may opt into the new rule’s Retail Lending Test – or may choose to continue to be evaluated under the current small bank test. They are not subject to a CD test.
    • HAC’s 2016 analysis found that 79.4 percent of banks headquartered in rural or small town census tracts that consistently received “Outstanding” or “Satisfactory” ratings were subject to the small bank exam.
  • Limited purpose banks—with just one primary product line such as credit cards (e.g., Amex Bank, Capital One)—are subject only to the CD Financing Subtest.
  • A Strategic Plan option allows banks of all sizes to choose to seek the regulators’ approval of a CRA strategic plan tailored to the bank’s lines of business and specific credit needs identified through a formal input process by the communities the bank serves.

Historically, bank examiners would conduct both quantitative and qualitative assessments of CRA performance under both the Retail Lending and CD Test and its subtests. Banks would be measured against benchmarks for lending and CD investment volume among other metrics relative to their size, business model, and comparable institutions. Quantitative ratings would be supplemented with qualitative assessments including taking account of the bank’s “performance context”—e.g., the economic conditions in the places it served—and determining whether a bank’s lending and CD investments were especially “responsive to a community’s credit and community development needs.” This qualitative element also allowed examiners to consider the terms and flexibility of bank CRA capital offered in particular LMI communities. Rural geographies benefitted especially from a qualitative component to CRA evaluation given their relatively greater capacity-constrained CD ecosystems and limited deal flow and transaction size.[2]

The final rule maintains the combined quantitative and qualitative CRA evaluation framework, but modifies and augments it in several important ways. The remainder of this analysis focuses on the rule’s approach to the new CD Test and Subtests and the potential ramifications for affordable housing and community development in rural America.

Opportunities for Rural Community Development Under the New CD Test

CRA-motivated bank investments, loans, and services have always played a role in rural community development.[3] But it has been challenging under the current CRA framework to increase bank commitments in rural communities, for a number of reasons—some of which are unique to rural areas and some of which are shared with urban and suburban communities.

First, as noted above, the large majority of banks headquartered in rural areas and small towns—and most likely to have branch and ATM networks there—are small banks not subject to a community development test at all. Intermediate-small and large banks were evaluated under the current rule primarily on their CD investments, lending, and services within their Assessment Areas (AAs), selected by the banks themselves and defined as the geographic areas that could reasonably be served by each of a bank’s locations, including its main office, any branches, and deposit-taking ATMs. Relatively few of their AAs encompassed rural geographies. As HAC’s research highlighted, large and intermediate bank support for rural communities faced an obstacle in their uncertainty about whether they would receive CRA credit for work outside their AAs.

The final rule makes major progress on addressing this challenge. While the new CD Test requires large banks and opting-in intermediate banks to meet the CD Financing and Services needs of their facility-based AAs, it also creates a “nationwide AA” to ensure that all CD Financing and Services activities contribute to an institution’s CRA rating.[4]

Second, the final rule highlights several factors that examiners will specifically take into account when conducting the qualitative “impact and responsiveness review” of a bank’s CD Financing and Services. These include whether the investment, loan, or service benefits or serves:

  • one or more Persistent Poverty Counties (PPCs);
  • residents of Native Land Areas; or
  • one or more geographic areas with low levels of community development financing.

Each of these factors will tend to reward bank CD Financing and Services in rural areas given their 1) demonstrable overrepresentation among PPCs, and Native Land Areas; and 2) likely overrepresentation among geographic areas with low levels of community development financing given consistent findings of underinvestment from other sources, such as philanthropy.[5]

Additional impact and responsiveness review factors specifically mentioned by the rule include bank financing that:

  • supports a Community Development Financial Institution (CDFI);
  • takes the form of a grant or donation; or
  • invests in a Low Income Housing Tax Credit (LIHTC) or New Markets Tax Credit (NMTC) project.

Given the scarcity of other public and private sector community development resources in rural areas, coupled with often challenged local economies, rural communities especially need the patient, flexible capital provided by CDFIs. Similarly, they have a disproportionate demand for grant funding and equity investments in CD projects and organizations rather than loans. Accordingly, an evaluation framework that specifically recognizes the impact and responsiveness of these approaches has the potential to benefit rural America.

For rural places, these factors may also interact positively with the above-mentioned addition of a “nationwide AA.” For example, a bank that today might hesitate to invest in a LIHTC or NMTC project outside of its facility-based footprint may choose to do so under the final rule, leading to a more geographically equitable distribution of resources over the long term.[6]

Third, CRA-motivated investment in all communities—urban, suburban, rural and small town—suffered under the prior CD Test from a lack of clarity around what loans, investments, or services were eligible for CRA credit. Other than a few long-deemed eligible activities, such as LIHTC or NMTC investments, banks and their community partners were often uncertain about the CRA impact of a new, innovative, or complex CD or affordable housing activity—often the very kinds of financial products and services needed by the most distressed rural communities.

The final rule states that the regulators will jointly “maintain a publicly available, non-exhaustive illustrative list of examples of community development activities that qualify for CRA consideration, including examples of qualifying affordable housing activities. The list will be periodically updated.” Additionally, the rule sets forth a formal process by which a bank can seek advance confirmation that a community development will be considered CRA-eligible.

Conclusion

As previously noted, the new CRA rule is a massive and complex document, representing a major shift in the implementation of this landmark statute. HAC and others will continue to analyze the rule—as well as early feedback from our partners as the transition period begins—and provide periodic updates. In the meantime, we urge our partners to consider approaching current or potential CRA-motivated funders of your work to inquire whether the aspects of the final rule described here might provide incentives for them to begin, increase, or modify favorable their CD financing and services investments in rural communities.

Footnotes

[1] The current CRA examination process is described in Making CRA Work in Rural America: Finding “Outstanding” Financial Institutions, part of HAC’s three-part series of reports “CRA in Rural America” published in 2016.

[2] When in 2019-2020, then-Comptroller of the Currency Joseph Otting put forth a CRA modernization rule shifting CRA evaluation to an entirely metrics-based approach, HAC submitted comments (as did numerous other affordable housing groups) expressing concern about the negative impact removing the qualitative element would have on banks’ incentive to invest in the most distressed rural and urban LMI communities.

[3] Indeed, CRA-motivated investments are a major driver of affordable housing and community development investment in general. For example, CohnReznick estimates that approximately $24.5 billion of capital was committed to housing tax credit investments in 2022 and that the CRA-motivated capital was the source for approximately 82 percent of that amount.

[4] Large national banks play an outsized role in CRA-motivated affordable housing and community. National banks control about 70 percent of the banking systems total assets. Over 99 percent of investments in LIHTC in 2022 from national banks were made by banks with over $10 billion in assets.

[5] The regulators note that currently there is not sufficiently comprehensive local CD financing data to implement this review factor, but expect to be able to do so in the near future, aided in significant part by the more detailed and robust bank CD data reported under the final rule itself.

[6] It should be noted that HAC joined other commenters on the proposed rule expressing concern that collapsing the prior CD Investment and Lending Subtests into a single CD Financing test might incentivize banks to make loans rather than equity investments in LIHTC and NMTC. The final rule’s inclusion of the equity review factor was designed to address this concern. It remains to be seen if banks do in fact maintain their investments in the LIHTC and NMTC markets.

HAC News: November 16, 2023

/in ,

Vol. 52, No. 23

TOP STORIES

Temporary government funding extended

President Biden is expected to sign into law a continuing resolution passed by the House on November 14 and the Senate on November 16. It extends fiscal year 2023 funding levels to January 19 for several agencies including USDA and HUD, and to February 2 for the rest of the federal government. The National Flood Insurance Program is also extended through February 2 and the Farm Bill through September 30, 2024. Congress now will resume efforts to pass individual appropriations bills.

RuralSTAT

Single-family detached units make up about 60% of homes nationwide, but over 72% in rural America. Manufactured or mobile homes are nearly twice as common in rural areas as in the entire U.S., while structures with two or more units are less than half as common. Source: HAC tabulations of the U.S Census Bureau’s 2017-2021 American Community Survey.

OPPORTUNITIES

HAC assists Section 515 preservation/transfers in more places

HAC and other organizations offer technical assistance to nonprofits on acquisition, transfer, and preservation of USDA Section 515 multifamily properties, including assistance with third party costs. HAC’s Section 515 TA service area has expanded and now includes AK, AL, AR, AZ, CA, CO, FL, GA, HI, ID, KY, LA, MS, MT, NC, NM, NV, OK, OR, PR, SC, TN, TX, UT, VI, WA, and WY. Current owners of Section 515 properties who are interested in transferring ownership to a nonprofit organization, or nonprofits who are interested in acquiring one, can reach out to Kristin Blum at HAC or find another TA provider on the Contact tab at this link. TA is also available for development of Section 514/516 farmworker properties in some states; click the Contact tab at this link.

HUD offers funding to address youth homelessness

Nonprofits, PHAs, Tribal housing entities, and state, local, or Tribal governments are eligible for Youth Homelessness System Improvement grants. Projects can include youth action boards; regional committees to direct efforts across multiple systems including education, justice, and child welfare; data collection and use; leadership development; and improvement of homeless assistance projects to better serve youth. Additional points are offered for applications that cover either an entire state or geographic areas in two or more Continuums of Care. The deadline is February 15. For more information, contact Nili Soni, HUD, 202-402-2973, YHSI@hud.gov.

CAPITOL HILL

Senators hope to help rural places access federal resources

The Rural Partnership and Prosperity Act, S. 3309, introduced November 15 by U.S. Senators Bob Casey (D-PA) and Deb Fischer (R-NE), would create a grant program to address rural communities’ needs like affordable child care, housing, and job training; provide guidance to help rural communities navigate existing federal funding opportunities; and improve supportive services offered by the federal government to rural communities. Supporting the measure, HAC President and CEO David Lipsetz noted, “This bill would empower rural regions by supporting locally-led planning and capacity building efforts, and providing flexible funding to meet critical needs.”

REGULATIONS AND FEDERAL AGENCIES

Comments invited on proposed changes to 2023 Duty to Serve plans

Both Fannie Mae and Freddie Mac propose to decrease loan purchase targets across multiple components of their Duty to Serve plans, citing reduced overall volume due to interest rates and market conditions as their reasons. Several of the changes would impact rural housing. Comments are due December 6. For more information, email DutyToServeStakeholders@FHFA.gov.

EVENTS

Energy efficiency webinar to include rural strategies

Bringing Energy Efficiency to Underserved Households: Examples to Emulate will explore a new toolkit from the American Council for an Energy-Efficient Economy highlighting best practices for increasing energy efficiency program participation among underserved residential customers. The webinar, set for November 30, will cover strategies for programs to better reach all underserved households as well as specific strategies for reaching renters, income-eligible households, and rural households.

PUBLICATIONS AND MEDIA

Low Income Housing Tax Credit recommendations updated

The National Council of State Housing Agencies provides recommended voluntary standards related to allocation, underwriting, and compliance monitoring for state agencies that administer the Low Income Housing Tax Credit. Recommended Practices in Housing Credit Administration: 2023 Update includes sections on facilitating rural and Native American housing development with the credit.

Research considers disasters and assisted housing

Natural Hazards and Federally Assisted Housing, a report from the National Low Income Housing Coalition and the Public and Affordable Housing Research Corporation, analyzes the risks that natural hazards pose to federally assisted housing and its residents. The study notes that federally assisted homes in rural areas are more vulnerable to damages from natural hazards than homes in urban areas are, and discusses several factors that contribute to rural vulnerability.

Flood Damage and Federally Backed Mortgages in a Changing Climate, by the Congressional Budget Office, considers the costs of one specific type of disaster – floods – related to owner-occupied homes backed by Fannie Mae, Freddie Mac, VA, or FHA. USDA mortgages were excluded because of data limitations. CBO found that expected flood damage is concentrated in certain geographic areas, such as the Atlantic and Gulf Coasts. About half of flood damage is estimated to occur in areas where homeowners are not required to carry flood insurance.

Disasters and the Rental Housing Community: Setting a Research and Policy Agenda, published by the Brookings Institution, points out the gaps in public responses to disasters for renters, rental properties, and rental housing stakeholders. Recommendations to address key challenges include: 1) universal renter protections; 2) the prioritization of low-income renters in all disaster programs; and 3) requirements for state and local governments to enforce tenant protections and support tenants and rental housing in exchange for access to federal disaster funding.

Research considers why Black families less likely to leave wealth for heirs

A new Urban Institute report, Intergenerational Wealth Transfers: Do Expectations of Leaving an Inheritance Differ Between Black and White Families?, shows that while Black families are as likely as whites to expect and desire to leave a sizeable estate to their descendants, Black families have less wealth to leave to younger generations because of the compounded effects of systemic racism. Barriers to wealth transfer include title issues such as heirs’ property and access to estate planning.

Farmworkers’ wages far lower than those of comparable workers

The Economic Policy Institute reports that in 2022, farmworkers earned 40% less than comparable nonagricultural workers. Another recent EPI post explains the varied data about the number of farmworkers employed in the U.S., concluding that 2.4 million is the best available estimate.

HAC

HAC’s office is moving

After 43 years in our current D.C. location, HAC is moving. Our new street address, effective on January 1, 2024, will be 1828 L Street, N.W., Suite 505, Washington, DC 20036. Our phone number will remain 202-842-8600.

HAC is hiring

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.