HAC Responds to Wall Street Journal Article on USDA Foreclosures

/in

Update: HAC’s letter to the editor was published in the Wall Street Journal on June 4 and is available here.

On Friday, May 25, 2012, the Wall Street Journal published an article headlined “USDA is a Tough Collector When Mortgages Go Bad.” It describes USDA’s efforts to collect from borrowers under the Section 502 guarantee program who lost income in the recession and then lost their homes to foreclosure.

The article is available in PDF here. (On the Journal’s site, the full text is accessible only to subscribers.)

Comments posted online on the Journal’s site as of mid-afternoon Friday are available in PDF here. A comment from Robert Rapoza, Executive Secretary of the National Rural Housing Coalition, appears near the end.

HAC responded with the following letter to the editor.

wsj.ltrs@wsj.com
The Editor
The Wall Street Journal
1211 Avenue of the Americas
New York, NY, 10036

To the Editor:

“USDA is a Tough Collector When Mortgages Go Bad” (May 24) describes serious problems, but fails to recognize the positive achievements of USDA’s rural housing programs. The debt collection practices described in the article should be corrected, but this does not mean – as some of the online commenters suggest – that USDA should be taken out of the mortgage business.

To qualify for USDA’s direct mortgage program, families must have low incomes; to qualify for the guarantee program, they must have low or moderate incomes. Yet USDA’s delinquency and foreclosure rates are comparable to those of other lenders and guarantors.

It is not surprising that some of USDA’s borrowers have been affected by the recession. It may be more surprising that a far greater proportion are successful homeowners, despite their income levels. The article reports that 12 percent of USDA’s guaranteed loans and 17 percent of its direct loans are delinquent or in foreclosure. In other words, 88 percent of the guaranteed loans and 83 percent of the direct loans are in good standing.

Those rates represent more than half a million homeowners with USDA guarantees and more than 230,000 with USDA direct loans, in addition to the one million or so who have already paid off their USDA mortgages. All those borrowers turned to USDA because they could not receive standard loans from the private market, and succeeded as homeowners despite their low incomes.

While we find ways to improve USDA’s treatment of its borrowers facing defaults and foreclosures, we should also celebrate its successes and embrace its future.

Moises Loza
Executive Director
Housing Assistance Council
Washington, DC

Posted: May 26, 2012
Updated: June 7, 2012

What Does an Affordable Rural Rental Housing Strategy Look Like?

/in

What Does an Affordable Rural Rental Housing Strategy Look Like?

By Leslie Strauss
May 22, 2012

Affordable housing advocates were happy recently to see the Senate Appropriations Committee tell the U.S. Department of Agriculture to get its act together on rental housing. USDA’s FY12 budget proposed to eliminate funding for the department’s flagship Section 515 rental housing loan program and focus its efforts on the Multi-Family Housing Revitalization Program known as MPR. Then the FY13 budget took the opposite approach, proposing to focus on Section 515 and eliminate funding for MPR. In S.Rpt. 112-163 the frustrated Senate committee “directs the Secretary, conclusively, to determine and articulate an effective long-term strategy to address rural rental housing needs.”

Read the full blog post…

House Votes to Eliminate American Community Survey

/in

HOUSE VOTES TO ELIMINATE AMERICAN COMMUNITY SURVEY

On May 9th, the House of Representatives voted, 232-190, to eliminate all funding for the Census Bureau’s American Community Survey in the 2013 Commerce, Justice, and Science appropriations bill (H.R. 5326).

The American Community Survey (ACS) replaced traditional Census “long-form” data collection starting with the 2010 Census. The ACS is the only source of publicly available data on social, economic, and housing characteristics for all communities in the United States. This annual survey is essential to understanding housing conditions in rural communities, as well as developing appropriate policies and local solutions to address housing inadequacies.

It is expected that the Senate will take up their version of this bill (S. 2323) the week of May 14. It does not include the ACS elimination, so a House-Senate conference will later decide on the fate of the ACS.

More details are available from

For more information on this issue, contact Lance George at the Housing Assistance Council, lance@ruralhome.org, (202) 842-8600.

Posted: May 11, 2012
Links updated May 14, 2012

HAC Final Comments to HUD on the Proposed Changes to the HOME Rule

/in

The Housing Assistance Council (HAC) applauds and supports the U.S. Department of Housing and Urban Development’s (HUD) efforts to take such a comprehensive approach and fresh look at the HOME Program. HAC welcomes this opportunity to provide constructive comments on several of the proposed regulations. Overall, in reviewing the proposed changes we mainly support most of the documented revisions. Our comments below address only areas where we feel the proposed regulations will have a direct impact, with specific attention to CHDOs operating in rural communities.

1. Administrative Funding

The increased administrative and capacity requirements for rural PJs and CHDOs will have a significant impact if the HOME program does not also consider increases to the administrative and operating funding made available to these entities. While HUD is considering allowing available HOME funds to assist stock such as HOPE VI and public housing, thus limiting the amount of funds for the traditional eligible activities, it should also take this opportunity to consider raising the administrative cap for PJs. This could help provide adequate funding to effectively meet increased responsibilities that PJs may not be able to fund without fee income.

2. CHDO Definition and Capacity Requirements (Section 92.2)

CHDOs’ capacity to develop projects as well as to sustain and grow their organizations does not happen in a vacuum, and often already happens amidst scarce resources; this is particularly true in the rural areas where HAC works. The proposed regulation requires CHDOs to demonstrate internal capacity to develop proposed projects with virtually no external assistance. It explicitly prohibits the use of consultants and volunteer labor to demonstrate capacity. This is concerning for all CHDOs, but most particularly rural organizations, where internal capacity is frequently limited to one staff person. New hires and the required ‘demonstrated development experience’ may be impossible. These proposed limitations will severely limit the operating capacity of CHDOs, particularly those in rural areas, and their access to the CHDO operating and set-aside funds.

Further, the proposed changes to the definition of “Developer” should be revisited. The proposed language of ‘Developer” seems to exclude CHDOs from developing rental housing; we hope that this is an error. Developing affordable permanent housing, ownership or rental, is a typical and expected development role for CHDOs. We are certain that HUD is not suggesting that CHDOs should not pursue multifamily while serving as ‘Developer’.

3. CHDOs Sponsored by Governmental Entities (Section 92.2)

The proposed regulation restricts the control of a CHDO by a governmental entity. A number of CHDOs were created by local housing authorities (LHAs), councils of governments (COGs), regional planning commissions (RPCs), and tribal entities (TDHEs) which are frequently incorporated as governmental entities. Permitting LHAs, COGs, RPCs, and TDHEs to spin off CHDO arms is beneficial to all parties as long as the governmental entity is unrelated to the PJ and has separation from political influence. The ability to use shared staff, shared office space, and participation on the board has proven beneficial to the creation of strong CHDOs. Disallowing these relationships can have direct impacts on these CHDOs’ capacity to survive without the in-kind support.

4. Reduced Timeline for Income Determination (Section 92.203)

From the Federal Register, “A minimum examination period of 3 months should be sufficient to accurately reflect the income eligibility of applicants for HOME units.” This could potentially have an impact on low-income persons with seasonal or inconsistent income. If a three month standard is applied, this may skew an applicant’s income eligibility by focusing on a narrower timeframe. HUD should consider a longer examination period, possibly six months for a more reliable assessment of the applicant’s true income.

5. Development Timeline Condensed (Section 92.205)

The proposed regulation reduces PJs’ time to commit funds from two years to one year and the time for organizations to develop from five years to four years. The regulation allows a PJ to request a twelve-month extension to complete pending approval by HUD officials. Failure to meet the timeline requirement will require the PJ to repay HOME funds invested in the project. For rural projects, where the need to assemble an array of affordable financing and grant resources and arrange the timing and layering of these commitments is often difficult and time consuming, the proposed timeframes may have a substantial negative impact. HAC requests that HUD leaves the time to commit funds and develop the project as it currently stands.

6. Pre-development Costs and Written Agreements with Jurisdictions (Sections 92.206 and 92.504)

HAC supports the proposal for HOME funds to pay for certain predevelopment costs and services before the HOME funds are committed, but HUD should consider extending the proposed period to 24 months rather than the suggested 18. This would, first, match the period referenced in 92.504(c) (6) where the CHDO has an expectation to receive funds for a project within that time period. Second, the change would reflect that, certainly for rural areas, 24 months is a reasonable timeframe for development, particularly considering the typical need to leverage added financial resources.

7. CHDO Operating Support (Section 92.208)

While HUD is proposing language to tighten CHDOs’ internal capacity, it should also consider a minimum amount of operating support that will be provided. This should help ensure that CHDOs planning to and undertaking CHDO-eligible activities will have a determined amount of funding to help support them during the pre-development and construction phases of a project.

8. Inspection Fees (Section 92.214)

While HUD is prohibiting organizations from charging fees to homebuyers and tenants, it will begin permitting PJs to charge inspection fees for annual compliance monitoring visits. The proposed regulation does not give guidance on cost reasonableness of the fees. Further, HUD should also clarify that jurisdictions may charge inspection fees to owners of rental developments during the construction phase, or otherwise accept the inspection of a certified architect or third party verification firm, whose costs are typically included in the development budget.

9. Prohibition to Charging Fees to Homebuyers (Section 92.214)

HAC’s understanding is that under the proposed rule organizations would not be permitted to charge fees to the family for HOME homeownership assistance. In addition, the PJs would be required to (1) determine that any fees charged to the family by the first mortgage lender are reasonable, based upon industry practice in the area, and (2) ensure that the family is not being charged fees for a HOME-funded activity. HUD should clarify whether while homebuyers are required to receive pre-purchase counseling HOME assistance, organizations can or cannot include housing counseling as an eligible project cost under the HOME program; many organizations do charge a nominal fee on the HUD-1 to cover a portion of expenses.

Another related question is whether organizations that serve as ‘approved,’ or certified loan packagers, for conventional, government, or other nonprofit agencies can charge packaging or brokerage fees if HOME assistance is part of the construction or homebuyer financing. HUD should allow ‘approved’ or certified loan packagers to charge justifiable, reasonable and customary fees for this service in light of recent safeguards to homebuyers, including the SAFE Act, already in place to help protect buyers.

10. Maximum Per-Unit Subsidy Amount, Underwriting, and Subsidy Layering (Section 92.250 (b) (2)

The underwriting criteria established by PJs include an assessment of the development team’s capacity to undertake the proposed project. First, HUD should specify where the criteria will be made public (e.g. Consolidated Plan, Annual Action Plan, etc.). Second, HUD and PJs should ensure that any experience and financial capacity criteria proposed are reasonable for the type of development proposed, not a blanket standard regardless of the project type. It is important to remember that developers, including CHDOs, do need to ‘stretch or reach’ to higher development capacity levels to take on larger or more complex projects. HAC would want to see that HUD and PJs continue to address the value of building and supporting CHDOs’ development capacity, and the assessment process indicated under this section takes this into account.

11. Leasing Up Rental Properties/Troubled Rental Projects (Section 92.252, 210)

Rental units which have not been leased within three to six months would be required to report marketing plans to HUD. If efforts to market the unit are unsuccessful and a unit is not occupied by an initial tenant after 18 months, HUD would require repayment of HOME funds invested in the units, yet the project owner must maintain compliance and affordability throughout the original performance period. HUD should take into account that for certain rural communities it may be normal for a rental development to fully lease-up beyond a six month period. HUD may consider including waivers if the entity and PJ demonstrates progress towards full lease-up. HAC is satisfied with the rest of these provisions.

12. Tenant and Homebuyer Preferences (Section 92.253)

The proposed rule permits PJs to limit beneficiaries or give preferences to a particular segment of the low-income population only if the limits are described in the action plan and do not violate fair housing requirements. Limiting beneficiaries or giving preferences to such professions as police officers, teachers, or artists would be permissible. Employees of the PJ are not eligible for preferences.

Additionally, a project may have a limitation or preference for people with disabilities who need services offered at a project only if:

  • it is limited to households with disabilities that significantly interfere with their ability to obtain and maintain housing;
  • the households will not be able to maintain themselves in housing without appropriate supportive services; and,
  • the needed services cannot be provided in a non-segregated setting.

However the regulation enforces the current practice to allow HOME projects to restrict programs, such as 202, 811 and HOPWA. The language of this section leads to different interpretations of tenant eligibility and requirements about participating in supportive services. HUD should provide more clarification on PJs setting preferences and establishing tenants’ participation requirements in supportive service programs.

13. Initial Purchase Price Limit (Section 92.254)

HUD has proposed language for nonmetro communities, exempting them from the 95 percent of area median purchase price standard for newly constructed homes, [and] allowing states to aggregate sales data from at least two contiguously connected counties with similar attributes to use as the alternative benchmark. First, HUD should consider allowing states to either adopt this as a standard, use the 95 percentile of the U.S. median purchase price for new construction in nonmetro areas, or use other options that would ensure the eligibility of newly constructed homes. States would have to publish the standard they choose in their Action Plans. Second, HUD and the states should address how the purchase price limits would apply to homeowner rehab activity. Alternative proposals should include existing housing as well as new construction. While the proposed changes includes rehab activity in considering the purchase price limits, using the 95 percent of area median purchase price limit makes it extremely difficult to assist existing housing in rural areas. It will limit impact developers’ ability to acquire/rehab and sell existing stock in low-value markets because the after-rehabilitation value will exceed the 95 percent limit thereby eliminating possible HOME-eligible assistance. The standard should, just as with new construction, allow for PJs to have maximum flexibility to help generate sales for income eligible and credit-worthy families.

14. Fee Simple Absolute Titles (Section 92.300 (a) (2-4)

To qualify as a CHDO for a HOME-funded project as an owner or sponsor the nonprofit must own the property under fee simple absolute title. HAC is concerned that such a narrow definition may impede or prohibit CHDO development on Native American lands (where title may be held in trust by the tribe) or in existing community land trusts (CLT). HUD should either modify or provide an exemption to this proposal to allow CHDOs who intend to own, develop or build on Native American lands or under the land trust model. In these cases fee simple absolute title is not feasible given issues of trust land or the housing development model. There are models of where this works. The U.S. Department of Agriculture (USDA), for example, provides development-related funds that can be used to purchase or maintain a leasehold interest in a site; to construct housing and to pay construction loan interest on native lands

15. Profit/Nonprofit Partnerships in LIHTC Deals (Section 92.300)

The proposed rule states that for a project to qualify for CHDO funds, the CHDO must be the sole general partner. This requirement would result in a significant change in participation of many CHDOs, particularly those that are rural, in the LIHTC program. Currently CHDOs may, and should play a substantive role as co-general partners (GP) that will not only attract capital to the real estate project but also build their development capacity. Under the proposed change the resulting partnerships, particularly those with equity and other capital/development partners, may continue to deliver affordable housing to low and very-low income families. It may not be beneficial to those CHDOs seeking to build its development capacity, earn fee income or see any other upside to its participation beyond the goal of delivering affordable rental housing. In rural developments with partnership structures, it might be possible that fewer of these real estate projects may be undertaken without the rural CHDO co-GP who is bringing or rehabilitating affordable rental housing to these areas when no other entity may be mission-oriented to do so. HUD should instead consider language that seeks to strengthen the active role that CHDOs need to play in partnership structures.
Download a PDF of this Announcement

Posted: February 14, 2012

FY 13 HUD Budget and Appropriations

/in

(Information about FY13 USDA rural housing funding is available here.)

HOUSE PASSES FY13 HUD APPROPRIATIONS BILL

July 2, 2012 – On June 29 the House of Representatives passed H.R. 5972, its version of the FY13 appropriations bill for the departments of Transportation and HUD. Most program funding remains at the levels set by the House Appropriations Committee (see table below). Slight increases were adopted for two programs: the Housing Opportunities for Persons with AIDS (HOPWA) was increased by $2 million and Homeless Assistance Grants received an additional $5 million. To keep the bill’s total funding level unchanged, these amounts were offset by decreases in HUD’s salaries and expenses account and its working capital fund.

The House rejected amendments to the bill that would have cut funding for HOME and CDBG. Proposals to increase funding for several other programs failed.

A more detailed summary of the amendments and discussion on the House floor is available from the National Low Income Housing Coalition.

The full Senate has not yet scheduled a date for consideration of its T-HUD funding bill, S. 2322.

HUD Program
(dollars in millions)

FY11 Final
Approp.a

FY 12 Final Approp.

FY13
Admin. Budget

FY13 Senate Cmte. Bill
(S. 2322)

FY13 House Bill (H.R. 5972)

Cmty. Devel. Block Grants
(Sustainable Commun. Init.)
(Rural Innovation Fund)

3,508
(100)
0

3,308.1
0
0

3,143
100
0

3,210 b
50
0

3,404 b
0
0

HOME

1,610

1,000

1,000

1,000

1,200

Tenant-Based Rental Asstnce.
(Vets. Affairs Spptve Hsg. Vchrs)

18,408
(50)

18,914.4
(75)

19,074.3
(75)

19,396.3
(75)

19,134.3
(75)

Project-Based Rental Asstnce.

9,257.4

9,339.7

8,700.4

9,875.8

8,700.4

Public Hsg. Capital Fund

2,044

1,875

2,070

1,985

1,985

Public Hsg. Operating Fund

4,626

3,961.9

4,524

4,591

4,524

Choice Neighbrhd. Initiative

0

120

150

120

Housing Trust Fund

0

0

1,000

0

0

Native Amer. Hsg. Block Grant

650

650

650

650

650

Homeless Assistance Grants

1,905

1,901.2

2,231

2,146

2,005

Rural Hsg. Stability Prog.

—

—

5

c

c

Hsg. Opps. for Persons w/ AIDS

335

332

330

330

332

202 Hsg. for Elderly

400

374.6

475

375

425

811 Hsg. for Disabled

150

165

150

150

165

Fair Housing

72

70.8

68

68

68

Healthy Homes & Ld. Haz. Cntl.

120

120

120

120

120

Self-Help Homeownshp. (SHOP)

27

13.5

0

13.5

20

Housing Counseling

0

45

55

55

45

a. Figures shown do not include 0.2% across the board reduction.
b. Includes $3.1 billion in Senate and $3.34 billion in House for CDBG.
c. Funded under Homeless Assistance Grants.

HOUSE APPROPRIATORS ACT ON HUD SPENDING BILL FOR 2013

June 27, 2012 – The House committee report (H.Rept. 112-541) includes strong language supporting the Self-Help Homeownership Opportunity Program (SHOP):

Proposed elimination of SHOP.—The Administration once again proposes to eliminate all funding for the SHOP program, citing the HOME program as an acceptable substitute funding source and citing the rising administrative costs of SHOP recipients. Regarding the first point, the Committee notes there are many differences between the SHOP program, which allows non-profits to create affordable housing through the unique ‘‘self-help’’ model of homeownership, and the HOME program, which provides funding to states and local governments to increase the stock of affordable housing.

There are several reasons why the Committee declines to eliminate SHOP: HOME funding has decreased significantly in recent years; the self-help and sweat-equity model enjoys broad Congressional support; and SHOP funding is much-needed in rural areas, where state-wide HOME funds are scarce and often set-aside for large tax-credit developments, rather than for self-help homeownership. Regarding rising administrative costs, the Committee directs HUD to evaluate the history of administrative costs in the SHOP program, including whether HUD’s imposition of various requirements, such as mandatory site visits and Energy-Star certifications, has resulted in SHOP grantees requiring higher administrative costs.

The Committee directs the Secretary to report to the House and Senate Committees on Appropriations within 180 days of enactment on whether current administrative costs are reasonable, what portion of administrative costs are attributable to HUD requirements, and what actions can be taken by both HUD and grantees to reduce the administrative burden in this program.

June 20, 2012 – On June 19 the full House Appropriations Committee passed the Transportation-HUD funding bill without changing the subcommittee’s funding levels shown in the table below. An amendment by Rep. Jeff Flake (R-Arizona) to cut $2 million from the HOME program was defeated.

June 8, 2012 – The House Transportation-HUD Appropriations Subcommittee on June 7 reported out a bill to fund HUD and several other agencies in fiscal 2013 (starting Oct. 1, 2012).

The bill boosts funding for HOME, Sec. 202, CDBG, and SHOP. HOME, Section 202, and SHOP got significant increases above FY 2012 levels to $1.2 billion, $425 million, and $20 million respectively. The Rural Innovation Fund is not funded and seems dead after being left out of HUD’s budget proposal again. The Rural Housing Stability Program is funded as part of homeless assistance grants. Veterans housing vouchers are funded at $75 million and Native American Block Grants are at $650 million, maintaining 2012 levels for both programs. The House bill provides no funding for Choice Neighborhoods or Sustainable Communities. The table below provides details.

The full House Appropriations Committee is expected to act on this bill in about two weeks. The Senate Appropriations Committee passed its version of 2013 HUD appropriations, S. 2322, on April 19, with significant differences from yesterday’s House bill. Congress continues to move appropriations on a faster track this year, but it also remains unclear when the process will be complete. Final passage of most appropriations bills may not occur until a post-election lame duck session.

The bill is available on https://appropriations.house.gov/UploadedFiles/BILLS-112HR-SC-AP-FY13-THUD.pdf.

HUD Program
(dollars in millions)

FY11 Final
Approp.a

FY 12 Final Approp.

FY13
Admin. Budget

FY13 Senate Bill
(S. 2322)

FY13 House Subcomm.
Bill

Cmty. Devel. Block Grants
(Sustainable Commun. Init.)
(Rural Innovation Fund)

3,508
(100)
0

3,308.1
0
0

3,143
100
0

3,210 b
50
0

3,404 b
0
0

HOME

1,610

1,000

1,000

1,000

1,200

Tenant-Based Rental Asstnce.
(Vets. Affairs Spptve Hsg. Vchrs)

18,408
(50)

18,914.4
(75)

19,074.3
(75)

19,396.3
(75)

19,134.3
(75)

Project-Based Rental Asstnce.

9,257.4

9,339.7

8,700.4

9,875.8

8,700.4

Public Hsg. Capital Fund

2,044

1,875

2,070

1,985

1,985

Public Hsg. Operating Fund

4,626

3,961.9

4,524

4,591

4,524

Choice Neighbrhd. Initiative

0

120

150

120

Housing Trust Fund

0

0

1,000

0

0

Native Amer. Hsg. Block Grant

650

650

650

650

650

Homeless Assistance Grants

1,905

1,901.2

2,231

2,146

2,000

Rural Hsg. Stability Prog.

—

—

5

c

c

Hsg. Opps. for Persons w/ AIDS

335

332

330

330

330

202 Hsg. for Elderly

400

374.6

475

375

425

811 Hsg. for Disabled

150

165

150

150

165

Fair Housing

72

70.8

68

68

68

Healthy Homes & Ld. Haz. Cntl.

120

120

120

120

120

Self-Help Homeownshp. (SHOP)

27

13.5

0

13.5

20

Housing Counseling

0

45

55

55

45

a. Figures shown do not include 0.2% across the board reduction.
b. Includes $3.1 billion in Senate and $3.34 billion in House for CDBG.
c. Funded under Homeless Assistance Grants.

HUD SPENDING FOR 2013 ADVANCES IN SENATE

The Senate Appropriations Committee on April 19 reported out a bill to fund HUD and several other agencies in fiscal 2013 (starting October 1, 2012). Congress is moving appropriations on a much faster track this year, especially in the Senate, but it is still unclear when the process will be complete. The House of Representatives is also expected to move 2013 spending bills soon.

The Senate bill keeps HOME, SHOP, Indian housing and several other accounts at 2012 levels; increases public housing, rental assistance and homeless grants; and cuts a few other programs such as Section 811. The Rural Innovation Fund was not funded and seems dead after being left out of HUD’s budget proposal again.

The table below provides details.

HUD Program
(dollars in millions)

FY11
Approp. a

FY 12 Approp.

FY13 Admin. Budget

FY13 Sen. Bill (S. 2322)

Cmty. Devel. Block Grants
(Sustainable Commun. Init.)
(Rural Innovation Fund)

3,508
(100)
0

3,308.1
0
0

3,143
(100)
0

3,210 b
(50)
0

HOME

1,610

1,000

1,000

1,000

Tenant-Based Rental Asstnce.
(Vets. Affairs Spptve Hsg. Vchrs)

18,408
(50)

18,914.4
(75)

19,074.3
(75)

19,396.3
(75)

Project-Based Rental Asstnce.

9,257.4

9,339.7

8,700.4

9,875.8

Public Hsg. Capital Fund

2,044

1,875

2,070

1,985

Public Hsg. Operating Fund

4,626

3,961.9

4,524

4,591

Choice Neighbrhd. Initiative

0

120

150

120

Housing Trust Fund

0

0

1,000

0

Native Amer. Hsg. Block Grant

650

650

650

650

Homeless Assistance Grants

1,905

1,901.2

2,231

2,146

Rural Hsg. Stability Prog.

—

c

5

c

Hsg. Opps. for Persons w/ AIDS

335

332

330

330

202 Hsg. for Elderly

400

374.6

475

375

811 Hsg. for Disabled

150

165

150

150

Fair Housing

72

70.8

68

68

Healthy Homes & Ld. Haz. Cntl.

120

120

120

120

Self-Help Homeownshp. (SHOP)

27

13.5

0

13.5

Housing Counseling

0

45

55

55

a. Figures shown do not include 0.2% across the board reduction.
b. Includes $3.1 billion for CDBG.
c. Funded under Homeless Assistance Grants; amount not specified.

PROPOSED HUD BUDGET FOR 2013 IS A MIX OF CUTS AND HIKES

The HUD budget includes some good news and some bad, cutting some programs sharply while increasing or maintaining others. Increases are in:

  • tenant-based rental assistance,
  • public housing operating and capital funds,
  • homeless assistance grants,
  • Section 202 senior housing,
  • Choice Neighborhoods, and
  • housing counseling.

Level funding from 2012 to 2013 would be in:

  • HOME,
  • veterans supportive housing vouchers,
  • Indian housing block grants, and
  • Healthy Homes and lead hazard controls.

Cuts or eliminations are asked for:

  • project based rental assistance (a very deep cut of $639 million),
  • CDBG (cut by $165 million),
  • SHOP (zero funding),
  • Section 811 housing for the disabled, and
  • fair housing

Proposed increases are in some accounts that were cut sharply in 2011 or 2012, such as counseling and Section 202.

The Rural Innovation Fund again does not receive funds and appears to be dead. This abandonment is especially troublesome given HUD’s roll out of this program in their 2010 budget request, as a replacement for the older Rural Housing and Economic Development program. Congress provided one year of funding for the RIF (FY10), but then the request was mostly abandoned by HUD.

HUD’s Self-Help Homeownership Opportunity Program (SHOP) also does not receive funds, with potential applicants once again directed to HOME. HUD says “all SHOP activities are eligible under the HOME program,” so go apply there. This ignores the fact that HOME was cut by $650 million in FY12, is under some stress from misguided bad publicity, and could hardly work as a program funded by dozens of state and local jurisdictions.

There is also a proposal to increase minimum rents to $75 for the lowest income HUD-assisted households. The National Low Income Housing Coalition and other advocates strongly oppose this proposal.

The table below provides details.

HUD Program
(dollars in millions)

FY11
Approp. a

FY12
Admin.
Budget

FY 12 Approp.

FY13 Admin. Budget

Cmty. Devel. Block Grants
(Sustainable Commun. Init.)
(Rural Innovation Fund)

3,508
(100)
0

3,781
(150)
(25)

3,308.1
0
0

3,143
(100)
0

HOME

1,610

1,650

1,000

1,000

Tenant-Based Rental Asstnce.
(Vets. Affairs Spptve Hsg. Vchrs)

18,408
(50)

19,223
(75)

18,914.4
(75)

19,074.3
(75)

Project-Based Rental Asstnce.

9,257.4

9,429

9,339.7

8,700.4

Public Hsg. Capital Fund

2,044

2,405

1,875

2,070

Public Hsg. Operating Fund

4,626

3,962

3,961.9

4,524

Public Hsg. Revtlztn. (HOPE VI)

100

0

0

0

Choice Neighbrhd. Initiative

0

250

120

150

Housing Trust Fund

0

1,000

0

1,000

Native Amer. Hsg. Block Grant

650

700

650

650

Homeless Assistance Grants

1,905

2,372

1,901.2

2,231

Hsg. Opps. for Persons w/ AIDS

335

335

332

330

202 Hsg. for Elderly

400

757

374.6

475

811 Hsg. for Disabled

150

196

165

150

Fair Housing

72

72

70.8

68

Healthy Homes & Ld. Haz. Cntl.

120

140

120

120

Self-Help Homeownshp. (SHOP)

27

0

13.5

0

Housing Counseling

0

88

45

55

a. Figures shown do not include 0.2% across the board reduction.

Posted: February 13, 2012
Last updated: July 2, 2012

FY 13 RD Budget and Appropriations

/in

Information on HUD’s FY13 budget and appropriations is available here.

HOUSE AND SENATE OFFER DIFFERENT FUNDING RESOLUTIONS FOR REMAINDER OF FY13

March 12, 2013 – On March 6 the House of Representatives passed H.R. 933, a Continuing Resolution to fund the federal government for the remainder of FY13 (through September 30, 2013). The bill keeps FY12 funding levels and the 5% sequester in place, and adds a 0.098% across the board cut. Thus each rural housing program would receive 94.902% of its FY12 funding.

The Senate Appropriations Committee released its version of a CR. The bill has not yet been considered by the full Senate. It specifies funding levels for the rural housing programs, some of which are not the same as FY12 levels; keeps the 5% sequester in place; and adds a 2.513% across the board cut for USDA programs. That means each program would receive 92.487% of the amount shown in the table below.

The guarantee programs – Section 502 guaranteed for homeowners and Section 538 for rental housing – are not impacted by these cuts because they are funded by fees charged to program participants. They could, however, be affected by other changes such as staffing reductions.

[tdborder][/tdborder]

USDA Rural Devel. Program
(dollars in millions)

FY12 Final Approp.

FY13 Admin. Budget

FY13 House CR (H.R. 933) a

FY13 Senate Proposed CR b

502 Single Fam. Direct
(Self-Help Setaside)
(Teacher Setaside)

$900
—
—

$652.8
(141)
(67)

$900
0
0

$900
(5)
0

502 Single Family Guar.

24,000

24,000

24,000

24,000

504 VLI Repair Loans

10

28

10

28

504 VLI Repair Grants

29.5

28.2

29.5

c

515 Rental Hsg. Direct

64.5

0

64.5

31.3

514 Farm Labor Hsg.

20.8

26

20.8

d

516 Farm Labor Hsg.

7.1

8.9

7.1

d

521 Rental Assistance
(Preservation RA)
(New Constr. 515 RA)
(New Constr. 514/516 RA)

904.7
0
(1.5)
(2.5)

907.1
0
0
(3)

904.7
0
(1.5)
(2.5)

907.1
0
0
(3)

523 Self-Help TA

30

10

30

30

533 Hsg. Prsrv. Grants

3.6

0

3.6

c

538 Rental Hsg. Guar.

130

150

130

150

Rental Prsrv. Demo. (MPR)

2

34.4

2

17.8

Rental Prsrv. Revlg. Lns.

0

0

0

0

542 Rural Hsg. Vouchers

11

12.6

11

10

Rural Cmnty. Dev’t Init.

3.6

8

3.6

6.1

a. Does not include 5% sequester or 0.098% across the board cut.
b. Does not include 5% sequester or 2.513% across the board cut.
c. Total for Section 504 grants and Section 533 grants is $33.1 million, the same as in FY12.
d. Total budget authority for Section 514 loans and Section 516 grants is $16.5 million, compared to FY12 budget authority of $14.2 million.

SEQUESTRATION OCCURS

March 1, 2013 – Since no deal was reached to change or delay sequestration, it begins taking effect today. The effects may not be dramatic or immediately noticeable.

USDA AND HUD ESTIMATE SEQUESTRATION IMPACTS

HAC News item, February 20, 2013 – In a letter to Senate Appropriations Committee Chair Barbara Mikulski (D-MD), USDA Secretary Tom Vilsack stated that if funding for the remainder of FY13 is cut on March 1, USDA will need to eliminate Rental Assistance for 10,000 households, not only making their homes unaffordable but also reducing funds available to owners for maintenance and mortgage payments. HUD Secretary Shaun Donovan testified before the committee on February 14, detailing numerous potential program cuts at HUD.

SERIES OF FEDERAL FUNDING DECISION POINTS LOOMS

HAC News item, February 6, 2013 – March 1: Automatic, across-the-board spending cuts in discretionary domestic programs (5.1%) and defense will occur unless Congress acts to avert them. March date unknown: The Administration will release its FY14 budget proposal. March 27: The continuing resolution that has provided FY13 funding ends and the government will shut down unless Congress takes action. April 15: Legislators’ salaries will begin to be escrowed as required by the debt ceiling increase bill signed into law by President Obama on February 4, unless/until Congress passes a concurrent budget resolution for FY14. A budget resolution is not binding, so the appropriations committees can begin considering FY14 funding bills without it. May 18/August date unknown: The debt ceiling is suspended through May 18 and then it increases by a formula that is expected to enable the federal government to continue meeting its debts until sometime in August.

OMB TELLS AGENCIES TO PLAN FOR SEQUESTER, CBPP REPORTS SMALLER CUTS

HAC News item, January 24, 2013 – A memo from the Office of Management and Budget advises federal agencies to intensify planning for possible sequestration, but not to take action yet. Unless Congress changes the law, federal funding will be cut on March 1. The Center on Budget and Policy Priorities calculates that because of changes made in the tax deal (described below) the cut for non-defense discretionary programs including housing will be 5.1% rather than the previously expected 8.2%.

TAX DEAL DELAYS SEQUESTRATION

HAC News item, January 10, 2013 – The American Taxpayer Relief Act of 2012, the deal reached by the Administration and Congress to avoid the “fiscal cliff,” delays until March 1 the 8.2% across-the-board spending cuts that would have been effective January 1, while lowering the caps for FY13 discretionary spending. It also extends for one year a 9% credit floor for Low Income Housing Tax Credit deals and extends the New Markets Tax Credit for 2012 and 2013. In February and March Congress will be faced with decisions about sequestration, the U.S. debt ceiling, and the continuing resolution for FY13 funding that expires on March 27.

CONTINUING RESOLUTION TO FUND GOVERNMENT FOR SIX MONTHS

HAC News item, September 26, 2012 – Both the House and Senate passed H.J. Res. 117, keeping housing programs and almost all others at FY12 funding levels through March 27, 2013. President Obama is expected to sign it.

SEQUESTER REMAINS IN PLACE

HAC News item, September 26, 2012 – Before adjourning Congress did not change the “sequestration” – cuts in federal funds – required in January, although a variety of bills have been introduced. The Administration’s sequestration report to Congress indicates how each agency will implement the requirement to cut 8.2% of nondefense discretionary funding, including housing programs. USDA and HUD will cut each housing program account by 8.2%. (Some program accounts encompass one program while others include several.)

CONGRESS BACK IN SESSION, CR INTRODUCED

Excerpt from HAC News item, September 12, 2012 – A continuing resolution to fund federal programs for the first six months of FY13, starting October 1, is scheduled for votes in the House September 13 and in the Senate next week. H. J. Res. 117 would give most programs, including housing, increases in subsidy (budget authority) needed to remain at FY12 program levels.

ADMINISTRATION’S SEQUESTRATION REPORT DELAYED, CBO PREDICTS RECESSION

HAC News item, September 12, 2012 – White House Press Secretary Jay Carney told reporters the Administration needed more time to prepare the report to Congress required by the Sequestration Transparency Act, due on September 6, so the estimates on the impact of Budget Control Act funding cuts will be released later this week. Separately, An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022, by the Congressional Budget Office, projects that policy changes scheduled for January 2013, including sequestration, “will lead to economic conditions in 2013 that will probably be considered a recession.”

LEADERS AGREE ON CONTINUING RESOLUTION, CONGRESS RECESSES

HAC News item, August 8, 2012 – In late July Republicans and Democrats in Congress, along with the White House, announced they will develop a continuing resolution to fund the government for the first six months of FY13, starting October 1, 2012. Most programs will remain at FY12 funding levels. Congress has recessed until September 10, so the CR will be considered in September.

AG SPENDING BILL UP NEXT

Excerpt from HAC News item, July 11, 2012– Following a July 4 recess at home, the House may take up 2013 appropriations for USDA soon. There will be a continuing resolution to begin FY13 on October 1, 2012. Final budget decisions for 2013 will come in a post-election session, or in the new Congress next year.

STATUS NOTE

July 2, 2012 – Versions of USDA’s FY13 appropriations bill have been approved by the House and Senate Appropriations Committees (see details below), but the bill has not yet been considered by either the full House or the full Senate. Congress has adjourned until July 9. It is not clear when either body may take up its USDA spending bill after that.

HOUSE BILL TELLS USDA TO PLAN RURAL HOUSING SPENDING IN ADVANCE

Update and correction, June 20, 2012 – The full House Appropriations Committee passed the USDA spending bill on June 19, with only one change in the dollar amounts approved by the subcommittee. The subcommittee had provided $886.6 million for Section 521 Rental Assistance (not $866.6, as HAC reported originally), and the full committee adopted an amendment by Rep. Mike Simpson (R-Idaho) adding another $1.5 million for RA.

The draft House committee report instructs USDA to develop a plan for rental housing:

The Committee recognizes that a change in focus in the management of the multifamily housing portfolio may be necessary. However, the Committee is concerned about the dramatic shifts in the proposed program funding levels over the past two fiscal years and directs the Department to develop and present to the Committees on Appropriations of the House and Senate a definitive plan to address rural rental housing needs.

The Senate Appropriations Committee report included even stronger language regarding rental housing:

The Committee is concerned that the Department’s vision for its role in supporting affordable rural rental housing is out of focus. Section 515 direct loans were the centerpiece of the fiscal year 2012 President’s budget, while the fiscal year 2013 request eliminates that program. The revitalization pilot was eliminated in the fiscal year 2012 request. However, the fiscal year 2013 request increases the revitalization pilot by 361 percent, and includes substantial funding for vouchers even with large unobligated balances. Proposed legislation is promised to permanently authorize the revitalization program, but no description of the proposed program is offered.

The Committee directs the Secretary, conclusively, to determine and articulate an effective long-term strategy to address rural rental housing needs. The Committee continues to fund each of the rural rental housing program tools and provides increased flexibility to transfer funds. Finally, the Committee directs the Secretary to submit the proposed revitalization legislation as soon as possible.

June 6, 2012 – The House Agriculture Appropriations Subcommittee passed its FY13 spending bill unanimously, with no changes to the housing numbers reported below.

June 5, 2012 – The House Appropriations Committee released a draft USDA FY13 spending bill, which will be reviewed by the Agriculture Appropriations Subcommittee on June 6. The House draft would provide lower amounts than the Senate’s bill for almost all rural housing programs. It allocates slightly more to the Section 515 rural rental housing program than the Senate bill, although the House’s $31.3 million is less than half of the $64.5 million Section 515 received in FY12.

The loan guarantee programs – Section 502 for owner-occupied housing and Section 538 for rental units – are at the same levels in the House and Senate bills. These programs charge fees that make them self-supporting.

The House bill contains new language in every provision relating to housing programs and in some, but not all, provisions relating to other Rural Development programs: “Not later than 15 days after the date of the enactment of this Act, the Secretary of Agriculture shall submit to the Committees on Appropriations of the House of Representatives and the Senate a detailed spending plan by program, project, and activity for the funds made available under this heading.”

Details are provided in the table below.

USDA Rural Devel. Program
(dollars in millions)

FY11 Approp.a

FY12 Final Approp.

FY13 Admin. Budget

FY13 Sen. Bill (S. 2375)

FY13 House Committee Print

502 Single Fam. Direct
(Self-Help Setaside)
(Teacher Setaside)

$1,121
—
—

$900
—
—

$652.8
(141)
(67)

$900
(5)
0

$652.8
0
0

502 Single Family Guar.

24,000

24,000

24,000

24,000

24,000

504 VLI Repair Loans

23.4

10

28

28

10

504 VLI Repair Grants

34

29.5

28.2

b

c

515 Rental Hsg. Direct

69.5

64.5

0

28.4

31.3

514 Farm Labor Hsg.

25.7

20.8

26

26

d

516 Farm Labor Hsg.

9.8

7.1

8.9

8.9

d

521 Rental Assistance
(Preservation RA)
(New Constr. 515 RA)
(New Constr. 514/516 RA)

955.6
0
(2.03)
(3)

904.7
0
(1.5)
(2.5)

907.1
0
0
(3)

907.1
0
0
(3)

886.6f
0
(1.5)
(2.5)

523 Self-Help TA

37

30

10

30

15

533 Hsg. Prsrv. Grants

10

3.6

0

b

c

538 Rental Hsg. Guar.

30.9

130

150

150

150

Rental Prsrv. Demo. (MPR)

15

2

34.4

16.8

2

Rental Prsrv. Revlg. Lns.

1

0

0

0

0

542 Rural Hsg. Vouchers

14

11

12.6

11

10.8

Rural Cmnty. Dev’t Init.

5

3.6

8

6.1

3.5 e

a. Figures shown do not include 0.2% across the board reduction.
b. Total for Section 504 grants and Section 533 grants is $33.1 million.
c. Total for Section 504 grants and Section 533 grants is $17 million.
d. Total budget authority for Section 514 loans and Section 516 grants is $13.8 million, compared to the Senate bill’s total of $17.5 million.
e. Of the $3.549 million total for RCDI, $3.302 million is directed to community facilities grants to tribal colleges.
f. HAC originally reported the House subcommittee’s level for Rental Assistance was $866.6 million, but the correct figure is $886.6 million.

SENATE COMMITTEE REJECTS ADMINISTRATION BUDGET FOR RURAL HOUSING PROGRAMS

Updated, May 1, 2012 – On April 26 the Senate Appropriations Committee approved a spending bill for USDA programs, including rural housing programs, for Fiscal Year 2013 (beginning October 1, 2012).

The Senate bill also includes language that extends for one year eligibility for rural housing programs for all communities currently in the program. Background on this issue is available here.

FY13 ADMINISTRATION BUDGET REQUEST

February 13, 2012 – The USDA rural housing programs portion of the Obama Administration’s budget for fiscal year 2013 differs in several ways from last year’s budget proposal and from the final appropriations adopted for FY12. Details are provided in the table below.

The Section 502 mortgage guarantee program continues to be emphasized as the primary single-family vehicle; fees charged to borrowers mean the program does not cost the government anything. The Section 502 direct mortgage lending request of $652 million is considerably higher than last year’s $211.4 proposal, but lower than the $900 million appropriated for FY12. For the first time, the Administration requests setasides of Section 502 direct loans for borrowers participating in the Section 523 self-help housing program and for teachers.

Section 523 self-help technical assistance funds for local organizations that sponsor self-help “sweat equity” programs would drop from the $30 million appropriated level to $10 million – but $10 million is higher than the 0 requested in the FY12 budget.

The budget’s figures for Section 504 repair loans and grants for very low-income homeowners are far higher, at $28 million and $28.2 million respectively, than the FY12 budget request, and the loan amount is almost triple the $10 million FY12 funding level.

The Administration makes significant changes in its multifamily housing approach this year. Fees have been authorized for Section 538 guaranteed multifamily loans, making that program self-supporting, so the FY13 budget requests a $150 million lending level. The Section 515 direct loan program is zeroed out, with preservation and rehabilitation funding provided through $34.4 million in the Multifamily Housing Preservation and Revitalization (MPR) program. No Rental Assistance is set aside for preservation activities, although USDA has the authority to establish such a setaside on its own.

The budget proposes slight increases from FY12 levels for Section 514/516 farmworker housing loans and grants, as well as a setaside of Section 521 Rental Assistance.

The $907 million requested for Section 521 RA is intended to renew expiring contracts, thus maintaining rent subsidies for tenants who currently have them.

As it did last year, the Administration proposes to increase the Rural Community Development Initiative to $8 million for intermediary organizations to support regional economic development strategies. Congress declined to adopt this Regional Innovation Initiative in the FY12 appropriations law.

Discuss or comment on the budget on HAC’s rural housing listserv or on Twitter (use hashtag #ruralhousing)
Register now for HAC’s webinar on the rural housing budget, to be held Tuesday, February 21, 2:00-3:00 eastern time.

USDA Rural Devel. Program
(dollars in millions)

FY11 Approp.a

FY12 Admin.
Budget

FY12 Final Approp.

FY13 Admin. Budget

502 Single Fam. Direct
(Self-Help Setaside)
(Teacher Setaside)

$1,121
—
—

$211.4
—
—

$900
—
—

$652.8
(141)
(67)

502 Single Family Guar.

24,000

24,000

24,000

24,000

504 VLI Repair Loans

23.4

0

10

28

504 VLI Repair Grants

34

11.5

29.5

28.2

515 Rental Hsg. Direct

69.5

95.2

64.5

0

514 Farm Labor Hsg.

25.7b

27

20.8

26

516 Farm Labor Hsg.

9.8b

9.8

7.1

8.9

521 Rental Assistance
(Preservation RA)
(New Constr. 515 RA)
(New Constr. 514/516 RA)

955.6
0
(2.03)
(3)

906.7
0
(3)
(3)

904.7
0
(1.5)
(2.5)

907.1
0
0
(3)

523 Self-Help TA

37

0

30

10

533 Hsg. Prsrv. Grants

10

0

3.6

0

538 Rental Hsg. Guar.

30.9

0

130

150

Rental Prsrv. Demo. (MPR)

15

0

2

34.4

Rental Prsrv. Revlg. Lns.

1

0

0

0

542 Rural Hsg. Vouchers

14

16

11

12.6

Rural Cmnty. Dev’t Init.

5

8.4

3.6

8

a. Figures shown do not include 0.2% across the board reduction.
b. Figures shown for Section 514 and 516 farm labor housing are the amounts offered in the FY11 NOFA.

Posted: February 13, 2012
Last updated: June 20, 2012

HAC Comments to HUD on the Proposed Changes to the HOME Rule

/in

In response to HUD’s proposed changes to the HOME regulations HAC has prepared a draft set of observations and comments to those particular suggestions which we feel will have the most significant impact on rural communities and the organizations that serve them. This list is not exhaustive by any means, but we hope you find it useful in helping you think through how the proposed regulations changes will impact your work and community. If it is helpful, here is the link to the official HUD proposed rule presentation and summary, https://www.hometa.info/.

Please share your thoughts with us. Please be brief, and we will try to reflect them in our official response letter to HUD. We are looking for a quick turnaround; please submit your comments to Dan Stern, dan@ruralhome.org by COB, Wednesday, February 8th or comment on HAC’s LinkedIn page or on Twitter #HOMERules. We will post our final letter on our website. We look forward to your input.

Select observations and comments:

1. CHDO Capacity Requirements (Section 92.2)

The proposed regulation requires CHDOs to demonstrate internal capacity to develop proposed projects with virtually no external assistance. This is concerning for all CHDOs, but most particularly rural organizations, where internal capacity is frequently limited to one staff person and new hires where the required ‘demonstrated development experience’ may be impossible. The rule explicitly prohibits the use of consultants and volunteer labor to demonstrate capacity.

2. CHDOs Sponsored by Governmental Entities (Section 92.2)

The proposed regulation restricts the control of a CHDO by a governmental entity. A number of CHDOs were created by: local housing authorities (LHAs), council of governments (CoGs), regional planning commissions (RPCs), and tribal entities (TDHEs) which are frequently incorporated as governmental entities. Permitting LHAs, COGs, RPCs, and TDHEs to spin off CHDO arms are beneficial to all parties as long as the governmental entity is unrelated to the PJ and has separation from political influence. The ability to use shared staff, shared office space, and participation on the board has proven beneficial to the creation of strong CHDOs. Disallowing these relationships can have direct impacts on these CHDOs’ capacity to survive without the in-kind support.

3. Reduced Timeline for Income Determination (Section 92.203)

“A minimum examination period of 3 months should be sufficient to accurately reflect the income eligibility of applicants for HOME units”. This could potentially have an impact on low-income persons with seasonal or inconsistent income.

Message From HAC

Dear Rural Development Stakeholder:

The Housing Assistance Council (HAC) seeks your feedback on HUD’s proposed regulation changes for the HOME Program, particularly on how they may impact rural communities, otherwise considered non-entitlement jurisdictions. We have shared our draft observations and comments with several stakeholders and want to share it with you. We want to make sure your voices are being heard at this important opportunity to comment on HUD’s proposed changes. While many of the comments we are sharing speak to issues that impact both metro and rural communities we want to ensure that we are highlighting the potential results that these changes will have on non-metropolitan areas. Please share your thoughts….please be brief…. and we will review them for possible inclusion in our official letter to HUD responding to their proposed regulations changes. We are looking for a quick turnaround; please submit your comments to Dan Stern, dan@ruralhome.org by COB, Wednesday, February 8th or comment on HAC’s LinkedIn page or on Twitter #HOMERules. We will post our final letter on our website.

Also, the link to HUD’s summary and presentation on the proposed HOME regulation changes is https://www.hometa.info/.

We look forward to your input.

Sincerely,

Jeff Mosley
Director, Training and Technical Assistance Division

4. Development Timeline Condensed ((Section 92.205)

The proposed regulation reduces the PJs time to commit funds from 2 years to 1 year and the time for organizations to develop from 5 years to 4 years. The regulation allows the PJ to request a 12 month extension to complete pending approval by HUD officials. Failure to meet the timeline requirement will require the PJ to repay HOME funds invested in the project. For rural projects, where the need to assemble an array of affordable financing and grant resources and arrange the timing of these commitments is often difficult and time consuming, the proposed timeframes may have a substantial negative impact.

5. Inspection Fees (Section 92.214)

While HUD is prohibiting organizations from charging fees to homebuyers and tenants, it will begin permitting PJs to charge inspection fees for annual compliance monitoring visits. The proposed regulation provided does not give guidance on cost reasonableness of the fees.

6. Prohibition to Charging Fees to Homebuyers (Section 92.214)

Under the proposed rule organizations would not be permitted to charge fees to the family for HOME homeownership assistance it provides. In addition, the PJs would be required to determine that the fees and other amounts charged to the family by the lender for the first mortgage financing are reasonable, based upon industry practice in the area, and ensuring that the family is not being charged fees for a HOME-funded activity. HUD should clarify that, while it requires homebuyers receiving HOME assistance to receive pre-purchase counseling, organizations can or cannot include Housing Counseling an ineligible project cost under the HOME program; many organizations charge a nominal fee on the HUD-1 to cover a portion of expenses. A question is whether organizations that serve as approved, or certified loan packagers, for conventional, governmental or other nonprofit agencies can charge packaging or brokerage fees if HOME assistance is part of the construction or homebuyer financing.

7. Leasing Up Rental Properties/Troubled Rental Projects (Section 92.252, 210)

Rental units which have not been leased within 3-6 months will be required to report to HUD marketing plans. If efforts to market the unit are unsuccessful and a unit is not occupied by an initial tenant after 18 months, HUD would require repayment of HOME funds invested in the units but the project owner must maintain compliance and affordability throughout the original performance period.

8. Tenant and Homebuyer Preferences (Section 92.253)

The proposed rule limits permits PJs to limit the beneficiaries or give preferences to a particular segment of the low-income population only if described in the action plan and it doesn’t violate fair housing. Limiting beneficiaries or giving preferences to such professions as police officers, teachers, or artists are eligible. Employees of the PJ are not eligible for preferences.

Additionally, a project may have a limitation or preference for people with disabilities who need services offered at a project only if:

· it is limited to households with disabilities that significantly interfere with their ability to obtain and maintain housing;

· the households will not be able to maintain themselves in housing without appropriate supportive services; and,

· the needed services cannot be provided in a non-segregated setting.

However the regulation enforces the current practice to allow a HOME projects to restrict program beneficiaries when the project includes leveraged funds from categorically excluded programs, such as 202, 811 and HOPWA.

9. Initial Purchase Price Limit (Section 92.254)

HUD has proposed language for non-metro communities, exempting them from the 95 percent of area median purchase price standard for newly constructed homes, allowing states to aggregate sales data from at least two contiguously connected counties with similar attributes to use as the alternative benchmark. First, HUD should consider allowing states to either adopt this as a standard, use the 95 percentile of the U.S. median purchase price for new construction in non-metro areas, or other options that would ensure the eligibility of newly constructed homes. States would have to publish the standard they choose in their Action Plans. Second, HUD and the states should address how the purchase price limits would apply to homeowner rehab sales. How does the proposed purchase price limit impact developers’ ability to acquire/rehab and sell existing stock in low-value markets? The standard should, just as with new construction, allow for maximum flexibility to generate sales for income eligible and credit-worthy families.

10. Fee Simple Absolute Titles (Section 92.300)

To qualify as a CHDO for a HOME-funded project as an owner or sponsor the nonprofit must own the property under Fee Simple Absolute title. Staff is concerned that such a narrow definition may impede or prohibit CHDO development on Native American Lands or in existing CLTs.

11. Profit/Nonprofit Partnerships in LIHTC Deals (Section 92.300)

The proposed rule states that for a project to qualify for CHDO funds, the CHDO must be the sole general partner. It will result in a significant change in participation of many CHDOs, particularly those that are rural, in the LIHTC program. The resulting partnerships, in particular, with equity and other capital/development partners may not be beneficial to CHDOs seeking fees, capacity or other upside to its participation beyond the delivery of affordable rental housing.

This list is not exhaustive and any statements that are inaccurate are unintentional; please refer to the official HUD proposed HOME regulations for complete documentation. If there is a topic that we did not highlight that you think is critical please make sure to submit your comment. Comments may also include topics that you think should be included in the proposed HOME regulations that currently are not proposed or discussed.

Thank you for your interest and assistance in helping HAC ensure that HUD receives thorough feedback on how the proposed Rule changes impacts the communities we serve.
Download a PDF of this Announcement

Posted: February 3, 2012

USDA to Close 43 RD Offices as Part of New "Blueprint for Stronger Service"

/in

On January 9, 2012, USDA unveiled a Blueprint for Stronger Service that includes closing 43 Rural Development (RD) field offices in 17 states. A total of 259 USDA agency offices, facilities, and labs will be closed nationwide.

A USDA fact sheet summarizes the Blueprint’s impacts on RD, and lists the 43 counties that will lose RD offices:

  1. Alabama: Houston County
  2. Arizona: Mohave County
  3. Arkansas: Izard, Faulkner, Hot Spring, White, and Sevier Counties
  4. Delaware: Kent and Sussex Counties
  5. Hawaii: 1)(Kosrae, Chuuk, and Yap), and 2) Hawaii County
  6. Indiana: Monroe, Tippecanoe, LaPorte, and Marshall Counties
  7. Louisiana: Livingston County
  8. Maryland: Calvert, Garrett, and Worcester Counties
  9. Mississippi: DeSoto County
  10. Missouri: Jasper, Jefferson, Cape Girardeau, and Cole Counties
  11. North Carolina: Burke, Chowan, and Caswell Counties
  12. Oklahoma: Pushmataha and Pittsburg Counties
  13. Pennsylvania: Juniata County
  14. South Carolina: Richland and Sumter Counties
  15. Tennessee: Anderson, Bedford, Bledsoe, Cannon, Carter, Cocke, Humphreys, Sevier, and Trousdale Counties
  16. Virginia: Essex County
  17. Wyoming: Park County

“In some cases, offices are no longer staffed or have a very small staff of one or two people,” USDA Secretary Tom Vilsack explains in a blog post. “Many are within 20 miles of other USDA offices. In other cases, technology improvements, advanced service centers, and broadband service have reduced some need for brick and mortar facilities.”

In 1980, the Farmers Home Administration (FmHA) had “46 state offices, 264 district offices, and 1,904 county offices plus the National office in Washington, D.C.”1 By March 1998, after FmHA staff had been combined with business and utilities staff in a major reorganization, Rural Development had only 815 county offices.2 USDA’s Blueprint states that after the additional 43 offices are closed, “more than 450 RD offices remain.” It is not clear whether these 450 include state offices.

Secretary Vilsack’s blog post asserts that the Blueprint’s “end result is a plan that will create optimal use of USDA’s employees, better results for USDA customers, and greater efficiencies for American taxpayers.”

 

 Notes

1. A Brief History of Farmers Home Administration. USDA, Farmers Home Administration. Washington: Government Printing Office, January 1990.

2. USDA: Status of Closing and Consolidating County Offices. Washington: General Accounting Office (GAO/T-RCED-98-250), July 29, 1998, Table 1.

 

Posted: January 10, 2012

"Pinky" Clifford Speaks Out on Housing Conditions on Pine Ridge Reservation

/in

In a radio story titled “Generations of Housing Red Tape,” a family returns to the Pine Ridge Reservation in South Dakota only to experience difficulty finding a decent place to live. American Public Media’s Marketplace reporters chronicle the Hawk family and highlight the ongoing housing challenges on the reservation. HAC Partner, Emma “Pinky” Clifford, Director of the Oglala Sioux Tribe Partnership for Housing, shares her insights and experiences working to meet housing needs in this high need region.

To hear the story and see pictures of the Pine Ridge Reservation, visit

https://www.marketplace.org/topics/economy/economy-40/generations-housing-red-tape

 

 

Posted: December 2, 2011

Email down

/in

HAC Is experiencing email difficulties

Due to unforeseen outside influences HAC’s email system is down in all of its offices. If you need to reach someone immediately please phone them. We working to correct this problem. Sorry for the inconvenience.

Information about contacting HAC staff is available here.

_______________________

Posted: June18, 2012

If you have problems accessing any of the material on this page, contact Dan Stern, 202-842-8600 ext. 137.

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.