FY 2010 Spending, Section 502 Direct Homeownership Loans

nrhc

National Rural Housing Coalition Budget Bulletin,
Volume 13, Number 44
October 1, 2010

reprinted by permission

Attached is a table on USDA Section 502 direct loan obligations for Fiscal Year 2010. Through the Recovery Act as well as FY 10 appropriations, the Rural Housing Service had a total of $2.423 billion available, the most since the early 1980’s.

USDA obligated $2.144 billion or 85% of the total available. Of that, $755 million went to very low-income borrowers. This was 36% of the total. While this amount was less than the 40% setaside for very low-income, it is still the most that USDA has ever spent in a single year in the category. In terms of loans, USDA made 17,640 loans. Almost 40% of those went to very low-income borrowers. Self-help obligations totaled $167 million for 1,243 loans. The Home Ownership Partnership totaled $20.7 million and 271 loans.

In FY 2009, USDA obligated a total of $1.39 billion in Recovery Act and FY 09 appropriated funds. So, in FY 10, the Agency obligated about 55%, or $750 million more.

In September, USDA issued a change in procedure that allowed loan obligations without an appraisal. This change resulted in a spike in obligations and allowed the Department to get as close as it did to obligating the entire amount available. A question remains as to how many of those loans made in the last month will close, once appraisals are completed.

It is very likely that Section 502 direct returns to earth in FY 11. The budget request for FY 11 is about half of that available in FY 10. Discretionary resources are on the downswing and a program level of $1.12 billion (the level for the regular FY 10 appropriation) is likely.

Posted: October 1, 2010

Comments Requested on the Next Farm Bill

Comments Requested on the Next Farm Bill

The House Agriculture Committee is accepting comments regarding the next Farm Bill through June 14. The 2008 Farm Bill does not expire until 2012, but House Agriculture Committee Chairman Collin Peterson (D-Minn.) has already held a series of hearings in Washington, D.C. and across the country over the past two months.

The Farm Bill is a massive piece of legislation that authorizes a broad range of programs critical to rural areas. These programs include housing, rural water/wastewater infrastructure, community facilities, broadband expansion, renewable energy, support for new farmers, and business development initiatives. Secretary of Agriculture Tom Vilsack testified at the first Farm Bill hearing and expressed the Administration’s commitment to focus on funding regional rural development initiatives in the next Farm Bill. Since then, the field hearings have been almost entirely focused on agriculture issues.

Written comments will be an official part of the Committee’s Farm Bill field hearing record and should be submitted using the House Agriculture Committee’s online feedback form at https://agriculture.house.gov/inside/feedbackform.html. Comments are due by June 14, 2010.

Posted: June 09, 2010

FY 2010 RD NOFAs

USDA Rural Development funding notices published to date are summarized in the table below, and new notices will be added as they are issued.

A notice published in the Federal Register on March 4, 2010 stated that RD will not publish its combined NOFA for single-family and multi-family housing programs (commonly known as the 1940-L notice).

Links to funding notices for business and utilities programs are available on USDA RD’s website, here.

Program, Link, and Publication Date

Deadline

Eligible Applicants

Contact

Sec. 502 single-fam. direct

Low- and very low-income homebuyers

Sec. 502 single-fam. guaranteed

Low- and very low-income homebuyers

Sec. 504 repair loans

Very low-income homeowners

Sec. 504 repair grants

Very low-income homeowners age 62 or older

Sec. 515 new constr. (publ. 4/14/10)

June 14

Nonprofits, for-profits, indivs., prtnrshps., pub. agencies, etc.

RD state offices, listed in the NOFA or online here, or Melinda Price,
614-255-2403

Multifamily revitaliz. demo (MPR)

Owners or purchasers of Sec. 515 or Sec. 514/516 (off-farm) rental property

Preserv. Revolving Loan Fund

Nonprofits, nonprofits’ loan funds, state or local hsg. finance agencies

Sec. 514 farm labor loans (off-farm) (NOFA publ. 5/10/10, correction publ. 6/17/10)

July 9

Nonprofits, pub. agencies, tribes, prtnrshps w/ nonprofit GP

Henry Searcy, 202-720-1753, or RD state offices, listed in the NOFA or online here

Sec. 516 farm labor grants (off-farm) (NOFA publ. 5/10/10, correction publ. 6/17/10)

July 9

Nonprofits, pub. agencies, frmwrkr ass’ns, tribes

Henry Searcy, 202-720-1753, or RD state offices, listed in the NOFA or online here

Sec. 523 self-help tech. assistance

Nonprofits, public agencies with existing Sec. 523 TA contracts (no new applications accepted in FY 2008)

Sec. 523/524 site loans

Nonprofits, public agencies, tribes

Sec. 525/509 packaging

States, state agencies, local gov’t, nonprofits

Sec. 533 Hsg. Preserv. Grants (NOFA publ. 4/27/10, correction publ. 5/21/10)

June 28

Nonprofits, state or local gov’t agencies, tribes

RD state offices – listed in the NOFA or online here

Sec. 538 guar. rental (publ. 2/26/10)

Dec. 31

Approved lenders

RD state offices – listed in the NOFA or online here

Sec. 538 guar. demo (NOFA publ. 5/10/10, correction publ. 6/14/10)

rolling until funds are exhausted

Approved lenders with obligations issued between 10/1/07 and 12/17/10

Tammy Daniels

Sec. 542 vouchers (NOFA publ. 4/14/10, correction publ. 8/25/10)

Rolling

Tenants in Sec. 515 properties w/ mortgages prepaid or foreclosed after 9/30/05

RD offices or Stephanie B.M. White, 202-720-1615

Rural Community Devel. Init. (RCDI)

Nonprofit and public intermediaries, tribes

Household Water Well Systems Grants to lend to homeowners(publ. 3/26/10)

May 31

Nonprofits

Lorrie Davis, 202-720-9631

Household Water Well Systems Grants to lend to community systems (publ. 3/26/10)

May 25

Nonprofits

Joyce Taylor, 202-720-0499

Posted: May 10, 2010

Last Updated: September 20, 2010

Donations Needed for Tornado Recovery

Donations Needed for Tornado Recovery

The Esther Stewart Buford Foundation, a long-time HAC partner, is seeking donations to recover from the devastation of the Yazoo City tornado on April 24. All of the homeowners are fine, but the Foundation lost eight self-help homes in the tornado. The ESB Foundation hopes to start re-building this week or next and is seeking donations and resources which include:

2 – Extension Ladders,
1 – Little Giant Ladder,
2 – Nail Guns,
2 – Compressors,
3 – 150′ Heavy Duty Extension Cords,
1 – Generator, and
2 to 4 – Temporary Workers, who are needed for a few weeks

They also lost hammers, crow bars, large fabric paint drop cloths and screw drivers. The ESB Foundation, a 501(c)(3) charity, is committed to re-building these homes and helping their homeowners. Donations may be made to:

The Esther Stewart Buford Foundation
656 Center Park Lane
Yazoo City, MS 39194

___________________________

Posted: April 28, 2010

If you have problems accessing any of the material on this page, contact Janice Clark at HAC, janice@ruralhome.org, 202-842-8600.

House Committee to Mark Up Sec. 502 Guarantee Bill and Others

On Thursday, April 22, 2010 the House of Representatives’ Financial Services Committee will consider several housing-related bills, including H.R. 5017, a bill introduced on April 14 that would make additional funding available for the Section 502 guaranteed mortgage loan program in Fiscal Year 2010. The mark-up will be broadcast live online via the Committee’s website beginning at 10 a.m. Eastern time.

H.R. 5017, named The Rural Housing Preservation and Stabilization Act of 2010, would authorize up to $30 billion for the Section 502 guarantee program this year. (It has no provisions on rental housing preservation and is not related to H.R. 2876, The Rural Housing Preservation Act of 2009, which has been subsumed into H.R. 4868.) The program is expected to use the $12 billion previously authorized for this year by the end of April. The bill would raise the additional funds through lender fees when the guarantee is issued and then annually throughout the loan term.

The Committee’s mark-up includes a total of six bills, and will be continued on April 27:

  • H.R. 2336, Green Resources for Energy Efficient Neighborhoods Act of 2009 or the GREEN Act of 2009;
  • H.R. 5017, Rural Housing Preservation and Stabilization Act of 2010;
  • H.R. 2555, Homeowners’ Defense Act of 2009;
  • H.R. ____, FHA Reform Act of 2010;
  • H.R. 1264, Multiple Peril Insurance Act of 2009; and
  • H.R. ____, Flood Insurance Reform Priorities Act of 2010.

_______________________

Posted: April 20, 2010

If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

artcollings2

Art Collings Passed Away March 23, 2010

Arthur M. (Art) Collings, Jr. died on March 23, 2010.

Update March 29, 2010 – HAC has received a number of inquiries about Art’s family’s wishes for memorial contributions. The Collings family has not yet made a suggestion; HAC will post here when they do. Others have suggested that Art be remembered at HAC’s National Rural Housing Conference in December 2010. HAC is planning to do so, and will provide more information when it is available.

artcollings2

Art began working in rural housing in 1955. He started in New Jersey as an assistant county supervisor at the Farmers Home Administration (FmHA), quickly moving up to county supervisor and then to a variety of other positions in New Jersey and Washington, D.C. Beginning in 1972, the year in which the newly created Housing Assistance Council began hiring staff, Art’s jobs at FmHA alternated with periods at HAC. He served as special assistant to FmHA Administrator Gordon Cavanaugh from 1977 to 1980. From 1986 until his reluctant retirement at the end of 2004, Art served as HAC’s senior housing specialist.

Gordon Cavanaugh, HAC’s first executive director, once explained that he hired Art because he was told Art was the most liberal staffer at FmHA. “He taught the rest of us everything we knew,” said Cavanaugh. “Arthur was just extraordinarily dedicated, well informed, and a good-humored gentleman.”

Art wrote dozens of publications about USDA’s rural housing programs, from manuals on how to use them to analyses of how they could be improved. He authored a number of amendments to these programs, advised people all over the country on their use, and conducted countless training sessions.

Art’s dedication to improving housing conditions for low-income rural Americans was unmatched. His feistiness and humor, added to his extensive knowledge of USDA’s rural housing programs, made him unique, sometimes frustrating to work with, and well-loved around the country.

Art is survived by his wife of 52 years, Jean Collings and his sons Arthur M. Collings, III of Red Hook, NY and David H. (Dawn) Collings of Mercursburg, PA. He is also survived by four grandchildren: Sean, Samuel, Margaret and Allison and a brother, Lawrence Collings of Lady Lake, FL.

HAC has created a blog at https://artcollingsmemorial.blogspot.com/where stories and comments about Art can be shared.

___________________________

Posted: March 24, 2010
Updated: March 29, 2010

If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

Funds Running out for FY2010 Sec. 502 Guaranteed Funding

On March 9, 2010, USDA housing programs administrator Tammye Trevino sent notices to USDA Rural Development field offices and lenders explaining that the agency expects all FY2010 funds for Section 502 guaranteed loans to be used by the end of April.

On March 15 Reps. Barney Frank (D-Mass.), Maxine Waters (D-Calif.), Dennis Moore (D-Kansas), Rubén Hinojosa (D-Texas), and Joe Baca (D-California) wrote to USDA Secretary Tom Vilsack and House Agriculture Appropriations Subcommittee Chair Rosa DeLauro urging the agency not to shift funds away from other programs to Section 502 guarantees.

_______________________

Posted: March 18, 2010

If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

USDA Forums

USDA RD Announces Self-Help Housing Forums

Update, April 19, 2010 – The date of the Washington, DC forum has been changed. That session will now be held on June 30. Visit USDA’s site for time and location details. Also, July 15 is established as the deadline date for written comments, and the USDA contact information has been changed.

Update, March 11, 2010 – The date of the Mississippi forum has been changed. That session will now be held on March 29. Visit USDA’s site for time and location details.

The following announcement has been posted on USDA Rural Housing programs’ website at https://www.rurdev.usda.gov/rhs/Admin/2010SelfHelpForums.htm and in the Federal Register on February 2, 2010. HAC will post additional details about the forums as they become available.

Responding to President Obama’s initiative for an open, transparent government, the Rural Housing Service intends to hold public forums to solicit feedback from the public on whether the current method of delivering the self-help program is the most efficient and cost effective in terms of cost and program delivery.

Transparency encourages accountability by delivering information to the public about what the Government is doing. Participation provides the public with opportunities to contribute ideas and expertise to the Government which will enable them to make sound policy decisions that represent a wider group of diverse individuals throughout society. Collaboration improves effectiveness of the Government by encouraging partnerships and cooperation within the Federal Government, across levels of government, and between the Government and private institutions.

Forum schedule is:

Date

State

February 18, 2010

Arkansas

March 5, 2010

Puerto Rico

March 12, 2010

North Carolina

March 29, 2010

Mississippi

April 9, 2010

Arizona

April 23, 2010

Ohio

May 14, 2010

Washington

June 4, 2010

Vermont

June 11, 2010

Iowa

June 18, 2010

Washington, D.C.

____________________________

Posted: February 2, 2010

Updated: July 1, 2010

If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

FY11 Budget HUD

Information about FY11 funding for USDA’s rural housing programs is available here.

MANY HUD PROGRAMS, INCLUDING RURAL INNOVATION FUND, CUT in Final CR for FY11

The final continuing resolution for fiscal year (FY) 2011, which will fund the federal government from April 16 through September 30, 2011, eliminates HUD’s Housing Counseling program and Rural Innovation Fund.

Funding for Section 202 elderly housing and Section 811 housing for people with disabilities would be cut in half. CDBG, HOME, public housing, NAHASDA, and some others would be reduced.

HAC has not yet learned whether HUD will issue an FY11 NOFA for the Rural Innovation Fund offering the amount authorized by the continuing resolutions covering the period from October 1, 2010 through April 15, 2011. Funding recipients under the FY10 NOFA, which had a February 23 application deadline, have not yet been announced.

Details are shown in the table below (parentheses indicate amounts that are included in totals).

HUD Program
(dollars in millions)

FY 2010 Approp.

FY11 Admin. Budget

FY11 House
Proposed CR
(H.R. 1)
FY11
Final CR
(H.R. 1473) (d)
FY12 Admin. Budget

Cmty. Devel. Block Grants

Sustainable Commun. Init.
Rural Innovation Fund (a)
Catalytic Investment Grants (b)

$4,450

(150)
(25)

$4,380.1

(150)
0
(150)

$1,500

0
(25)
0

$3,508

(100)
0
0

$3,781

0
(25)
0

HOME

1,825

1,650

1,650

1,610

1,650

Tenant-Based Rental Asstnce.
Vets. Affairs Supprtve Hsg Vouchers

18,184
(75)

19,551
0

18,080
(75)
18,408
(50)
19,223
(75)

Project-Based Rental Asstnce.

8,551.5

9,382.3

9,282 8,882 9,429

Transforming Rental Asstnce. (b)

350 0 0 200

Public Hsg. Capital Fund

2,500 2,044 1,428 2,044 2,405

Public Hsg. Operating Fund

4,775 4,829 4,626 4,626 3,962

Public Hsg. Revtlztn. (HOPE VI)

135 0 0 100 0

Choice Neighbrhd. Initiative (c)

65 250 65 0 250

Housing Trust Fund

1,000 0 0 1,000

Native Amer. Hsg. Block Grant

700 580 500 650 700

Homeless Assistance Grants

1,865 2,055 1,865 1,905 2,372

Hsg. Opps. for Persons w/ AIDS

335 340 335 335 335

202 Hsg. for Elderly

825 273 238 400 757

811 Hsg. for Disabled

300 90 90 150 196

Fair Housing

72 61 72 72 72

Healthy Homes & Lead Hazard Cntl.

140 140 120 120 140

Sustainable Communities Initiative

0 150

Self-Help Homeownshp. (SHOP)

27 0 27 27 0
Brownfields Redevelopment 17.5 0 0 0 0

Housing Counseling

87.5 88 0 0 88

a. Replaces the Rural Housing & Economic Development program.
b. New programs proposed by the Administration.
c. Demonstration initially proposed in FY 2010 budget to replace HOPE VI.
d. Figures shown do not include 0.2% across the board reduction

___________________________

HOUSE PASSES H.R. 1 WITH HOUSING CUTS, ACTION SHIFTS TO SENATE

On February 19, the House of Representatives passed H.R. 1, a continuing resolution for the remainder of fiscal year 2011, without changes to the housing program levels explained below. Congress is not in session the week of February 21. The Senate will begin considering the continuing resolution when it returns the week of February 28. It is not clear whether a bill will be completed by that Friday, March 4, when the current continuing resolution expires.

H.R. 1 WOULD KEEP MOST USDA RURAL HOUSING AT FY10 LEVELS but would Cut many HUD programs

Feb. 17, 2011 – H.R. 1, introduced on February 11 to fund the federal government for the rest of FY 2011, would fund most USDA rural housing programs at FY 2010 levels, although it would eliminate funding for preservation of rural rental housing. HUD funds would be cut more severely: H.R. 1 would eliminate two-thirds of the funding for CDBG and more than two-thirds for Section 202 and Section 811. It would eliminate housing counseling funds and would reduce funding for HOME, public housing, and Native American housing. It would continue funding for the Rural Innovation Fund and SHOP.

Details on H.R. 1’s proposals for USDA programs are available in the table here and for HUD are available here.

The House of Representatives is expected to pass H.R. 1 on February 17 or 18. President Obama has said he will veto this bill or other similar measures. The Senate will consider funding for the rest of FY11 the week of February 28, after a President’s Day recess.

CONTINUING RESOLUTION EXTENDED TO MARCH 4, 2011

Dec. 22, 2010 – The federal government will operate through March 4 under a continuing resolution that keeps HUD programs and USDA rural housing programs at their FY 2010 levels. The new 112th Congress will make funding decisions covering the remainder of FY 2011. The text of the CR is available at https://thomas.loc.gov/home/approp/app11.html.

APPROPRIATIONS BILL WITHDRAWN – NEW CR LIKELY THROUGH FEBRUARY

Congress will likely enact a continuing resolution to keep the federal government in business until February. The current CR expires on Dec. 18. Final spending decisions for FY 2011 will come in the new 112th Congress. On Dec. 16 Senate Democrats abandoned efforts to pass a recently introduced omnibus spending bill for all of FY 2011. That bill would have increased USDA Sec. 502 direct loans to $1.8 billion and kept most other HUD and rural housing programs at 2010 levels.

Continuing Resolution Begins FY 2011 at 2010 Funding Levels

October 1, 2010 – Congress has passed, and President Obama signed, a continuing resolution that funds the federal government through December 3, 2010. USDA and HUD programs, as well as most others, are continued at FY 2010 levels, including the $697 million added to the Section 502 guarantee program in the July 2010 supplemental appropriations act. USDA is again authorized to waive fees for Section 502 guaranteed loans, as it was in the supplemental appropriations act. The full text of H.R. 3081, the 2011 Continuing Appropriations Act, is available here.

HUD appropriations bills advance

Spending bills to fund HUD in FY 2011 moved ahead in both House and Senate in late July. The House on July 30 passed H.R. 5850, a Transportation-HUD appropriations bill, retaining the levels passed earlier by the Appropriations Committee and fending off floor efforts to cut programs. The Senate Appropriations Committee on July 22 passed S. 3644, their version of the bill. Both bills rejected the Obama Administration’s proposals to cut HOME and Sec. 202 and eliminate SHOP and the new Rural Innovation Fund. Final decisions on 2011 appropriations will not occur until a post-election lame duck Congressional session or later. See the table below for more details.

HUD Program
(dollars in millions)

FY 2010 Approp.

President’s
FY 2011 Budget

Proposal

FY 2011
House-passed
THUD Bill
FY 2011
Senate Comm.
THUD Bill (S. 3644)

Cmty. Devel. Block Grants

Sustainable Commun. Init.
Rural Innovation Fund (a)
Catalytic Investment Grants (b)

$4,450

(150)
(25)

4,380.1

(150)
0
(150)

4,352.1

(150)
(25)
0

4,450

(150)
(25)
0

HOME

1,825

1,650

1,825 1,825

Tenant-Based Rental Asstnce.

16,339

17,310

17,225 17,165

Project-Based Rental Asstnce.

8,551.5

9,382.3

9,382.3 9,382.3

Transforming Rental Asstnce. (c)

350 0 0

Vets. Affairs Spptve Hsg. Vouchers

75 0 75 75

Public Hsg. Capital Fund

2,500 2,044 2,500 2,510

Public Hsg. Operating Fund

4,775 4,829 4,829 4,829

Public Hsg. Revtlztn. (HOPE VI)

135 0 200 0

Choice Neighbrhd. Initiative (d)

65 250 0 250

Native Amer. Hsg. Block Grant

700 580 700 700

Homeless Assistance Grants

1,865 2,055 2,055 2,055

Hsg. Opps. for Persons w/ AIDS

335 340 350 340

202 Hsg. for Elderly

825 273 825 825

811 Hsg. for Disabled

300 90 300 200

Fair Housing

72 61 72 70.4

Rural Hsg. & Econ. Dev. (RHED)(e)

0 0 0 0

Healthy Homes & Lead Hazard Control

140 140 140 140

Self-Help Homeownshp. (SHOP)

27 0 27 27
Brownfields Redevelopmen 17.5 0 17.5 0

Housing Counseling

87.5 88 88 100

a. New program replacing Rural Housing & Economic Development.
b. New program for economic development and gap financing for community revitalization.
c. New program for rental preservation, efficiency and resident choice.
d. Demonstration initially proposed in FY 2010 budget to replace HOPE VI.
e. Replaced by Rural Innovation Fund.

___________________________

Posted: August 2, 2010

HUD, USDA spending bills for FY 2011 approved by House Subcommittees

Congressional appropriators on June 30 and July 1 began the first steps toward an FY 2011 budget for HUD and USDA rural housing programs. The House Appropriations Subcommittee on Agriculture met June 30 and reported out a bill to fund USDA and several other agencies. Full details are not yet known on the rural housing programs. But a summary table shows Rural Housing Service loans and grants funded at $1.322 billion. This is $101.8 million below the 2010 level but $71.9 million above the President’s budget request. The National Rural Housing Coalition predicts the bill will most likely maintain rural housing programs at 2010 levels.

The Transportation-HUD Subcommittee met July 1 and renewed most HUD programs, with increases for some. Rejecting HUD’s proposals to cut or eliminate HOME, Indian housing, Sec. 202, Sec. 811, SHOP, and the Rural Innovation Fund, the Subcommittee continued all those programs at 2010 levels. But the panel also declined to fund several new ideas proposed in the President’s budget, including Transforming Rental Assistance, Catalytic Investments, and Capacity Building. See the table above for HUD details.

Information on both bills, including lists of earmarks, is available at https://appropriations.house.gov. Complete details will be available after the full House Appropriations Committee considers the bills, probably later in July. Senate budget writers have not yet scheduled mark ups. For more information from Housing Assistance Council, contact joe@ruralhome.org or leslie@ruralhome.org.
___________________________

Posted: July 2, 2010
If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

HUD BUDGET PROPOSES CUTS FOR MANY PROGRAMS IN FY 2011.

The Obama Administration’s budget proposes some increases but also many reductions for the US Department of Housing and Urban Development in the fiscal year beginning October 1, 2010. Cuts are proposed for CDBG, HOME, Indian housing, Sections 202 and 811, fair housing, and the Public Housing Capital Fund. The Housing Trust Fund would be funded at $1 billion, and increases are proposed for homelessness programs, rental assistance, the Public Housing Operating Fund, and Housing Opportunities for Persons With AIDS.

For the first time since the late 1990s a President’s budget proposes to eliminate the Self-Help Homeownership Opportunity Program (SHOP). The budget says HUD will urge state and local administrators of the HOME program to fund SHOP projects.

No funding is requested for the new Rural Innovation Fund, which replaced the Rural Housing and Economic Development Program in 2010 appropriations, at HUD’s urging. The budget also proposes new initiatives on “Transforming Rental Assistance” and “Catalytic Investments.” See the table above for details.

___________________________

last updated: April 15, 2011
If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.

FY11 Budget USDA

Information about HUD’s FY11 funding is available here.

Most Rural Housing Programs Fare Well in Final CR for FY11

On April 15, 2011, President Obama signed into law a final continuing resolution (CR) to fund the federal government for the rest of fiscal year (FY) 2011. The measure keeps most rural housing programs at or near FY10 levels, a positive outcome in the current spending-reducing atmosphere.

Funding levels for Section 504 loans, Section 538 loans, Rental Assistance, and the MPR preservation demonstration are reduced. The Section 521 Rental Assistance setaside for preservation is the only USDA housing program that would receive no funding.

Despite the reductions, the CR leaves USDA’s housing programs facing the FY12 appropriations battle in a stronger position than advocates had feared, based on the Administration’s budget for FY12.

Details are shown in the table below (parentheses indicate amounts that are included in totals).

USDA Rural Development Program
(dollars in millions)

FY10
Approp.

FY11 Admin.
Budget

FY11 Proposed CR
(H.R. 1)

FY 11 Final CR
(H.R. 1473)*

FY 2012 Admin. Budget

Loans

502 Single Fam. Direct

$1,121

$1,200

$1,121

$1,121

$211.4

502 Single Family Guar.

12,000

12,000

12,000

24,000

24,000

504 Very Low-inc. Repair

34.4

34

34

23.4

0

514 Farm Labor Hsg.

27.3

27

27.3

**

27

515 Rental Hsg. Direct

69.5

95.2

69.5

69.5

95.2

538 Rental Hsg. Guar.

129.1

129.1

129.1

30.9

0

Rental Prsrv. Revlg. Loans

1.8

0

0

1

0

Grants & Payments

504 Very Low-inc. Repair

31.6

31

31.6

***

11.5

516 Farm Labor Hsg.

9.9

10

9.9

**

9.8

523 Self-Help TA

41.9

37

37

37

0

533 Hsg. Prsrv. Grants

9.4

9.4

9.4

***

0

521 Rental Assistance (1-yr. contracts)
Preservation RA
New Construction 515 RA
New Construction 514/516 RA

980
(6)
(2.03)
(3.4)

966
0
(3)
(3)

955.6
0
(2.03)
(3)

955.6
0
(2.03)
(3)

906.7
0
(3)
(3)

542 Rural Hsg. Vouchers

16.4

18

16.4

14

16

Rental Prsrv. Demo. (MPR)

25

0

0

15

0

Rural Community Development Initiative

6.3

0

0

5

8.4

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

** Budget authority (the cost to the government) in the Farm Labor Housing program account would remain at FY10 levels, but the loan costs have risen as interest rates have risen, so the Section 514/516 program levels could be somewhat lower than FY10.

*** The CR provides for a reduction of $1.1 million in the Rural Housing Assistance Grants pool, which funds Section 504 loans, Section 533, and some other smaller programs.

HOUSE PASSES H.R. 1 WITH HOUSING CUTS, ACTION SHIFTS TO SENATE

On February 19, the House of Representatives passed H.R. 1, a continuing resolution for the remainder of fiscal year 2011, without changes to the housing program levels explained below. Congress is not in session the week of February 21. The Senate will begin considering the continuing resolution when it returns the week of February 28. It is not clear whether a bill will be completed by that Friday, March 4, when the current continuing resolution expires.

H.R. 1 WOULD KEEP MOST USDA RURAL HOUSING AT FY10 LEVELS but would Cut many HUD programs

Feb. 17, 2011 – H.R. 1, introduced on February 11 to fund the federal government for the rest of FY 2011, would fund most USDA rural housing programs at FY 2010 levels, although it would eliminate funding for preservation of rural rental housing. HUD funds would be cut more severely: H.R. 1 would eliminate two-thirds of the funding for CDBG and more than two-thirds for Section 202 and Section 811. It would eliminate housing counseling funds and would reduce funding for HOME, public housing, and Native American housing. It would continue funding for the Rural Innovation Fund and SHOP.

Details on H.R. 1’s proposals for USDA programs are available in the table here and for HUD are available here.

The House of Representatives is expected to pass H.R. 1 on February 17 or 18. President Obama has said he will veto this bill or other similar measures. The Senate will consider funding for the rest of FY11 the week of February 28, after a President’s Day recess.

CONTINUING RESOLUTION EXTENDED TO MARCH 4, 2011

December 22, 2010 – The federal government will operate through March 4 under a continuing resolution that keeps HUD programs and USDA rural housing programs at their FY 2010 levels. The new 112th Congress will make funding decisions covering the remainder of FY 2011. The text of the CR is available at https://thomas.loc.gov/home/approp/app11.html.

APPROPRIATIONS BILL WITHDRAWN – NEW CR LIKELY THROUGH FEBRUARY

Congress will likely enact a continuing resolution to keep the federal government in business until February. The current CR expires on Dec. 18. Final spending decisions for FY 2011 will come in the new 112th Congress. On Dec. 16 Senate Democrats abandoned efforts to pass a recently introduced omnibus spending bill for all of FY 2011. That bill would have increased USDA Sec. 502 direct loans to $1.8 billion and kept most other HUD and rural housing programs at 2010 levels.

Continuing Resolution Begins FY 2011 at 2010 Funding Levels

October 1, 2010 – Congress has passed, and President Obama signed, a continuing resolution that funds the federal government through December 3, 2010. USDA and HUD programs, as well as most others, are continued at FY 2010 levels, including the $697 million added to the Section 502 guarantee program in the July 2010 supplemental appropriations act. USDA is again authorized to waive fees for Section 502 guaranteed loans, as it was in the supplemental appropriations act. The full text of H.R. 3081, the 2011 Continuing Appropriations Act, is available here.

SENATE COMMITTEE SUPPORTS USDA RURAL HOUSING PROGRAMS FOR 2011

July 20, 2010 – The text of the Senate Appropriations Committee’s USDA funding bill for FY 2011 is now available. S. 3606 boosts Section 502 single-family loans and holds most other rural housing programs level. The Committee rejected the Obama Administration’s proposed elimination of USDA’s rural rental preservation demonstration program, known as MPR, and also kept Section 515 rental housing at its FY 2010 level of $69 million. The most significant increase was a doubling of the loan level for Section 502 guaranteed loans to $24 billion. Section 502 direct loans received a modest increase to $1.2 billion, the Administration’s request.

The Committee bill would impose fees on Section 502 guaranteed loans (a 3.5 percent origination fee and 0.5 percent servicing fee), making the program self-financing. The Committee’s summary of the bill notes that “in the face of the recession private mortgage lenders have retrenched leaving Rural Development’s loan programs as a principle [sic] source of home financing in rural areas. . . . Regarding guaranteed loans, a fee increase is authorized which will allow the Agency to provide $24 billion in new loans at no cost to the government.”

The table below has more details.

USDA Rural Development Program
(dollars in millions)

FY09 Approp.

FY10
Approp.

FY11 Budget
Proposal

FY11 Senate Bill
(S. 3606)

Loans

502 Single Fam. Direct

$2,121.5a

$1,121

$1,200

$1,200

502 Single Family Guar.

16,699 a

12,000

12,000

24,000

504 Very Low-inc. Repair

34.4

34.4

34

34

514 Farm Labor Hsg.

20

27.3

27

27.2

515 Rental Hsg. Direct

69.5

69.5

95.2

69.5

538 Rental Hsg. Guar.

129.1

129.1

129.1

129.1

Rental Prsrv. Revlg. Loans

2.9

1.8

0

2.7

Grants & Payments

504 Very Low-inc. Repair

29.7

31.6

31

31.6

516 Farm Labor Hsg.

9.1

9.9

10

9.9

523 Self-Help TA

38.7

41.9

37

41.9

533 Hsg. Prsrv. Grants

8.9

9.4

9.4

9.4

521 Rental Assistance (1-yr. contracts)
Preservation RA
New Construction 515 RA
New Construction 514/516 RA

902.5
(6)
(2.03)
(3.4)

980
(6)
(2.03)
(3.4)

966
0
(3)
(3)

971.6
(6)
(3)
(3)

542 Rural Hsg. Vouchers

5

16.4

18

16.4

Rental Prsrv. Demo. (MPR)

20

25

0

25

a. Includes Recovery Act funds.

Posted: July 22, 2010

SENATE COMMITTEE VOTES TO INCREASE SECTION 502 FUNDS

July 16, 2010 – On July 15 the Senate Appropriations Committee reviewed and approved a USDA appropriations bill for FY 2011 that would increase funds for Section 502 direct and guaranteed loans. The Committee’s summary of the bill does not indicate whether it restores funding for rental preservation efforts, which were zeroed out in the Administration’s budget proposal. (For details on the budget, scroll down.)

The entire Rural Development section of the Committee’s summary states:

The bill includes $2.768 billion in discretionary budget authority for rural development programs, which is a decrease of $168 million from the fiscal year 2010 enacted level and an increase of $85 million above the President’s request. Generally, the bill provides level funding for water and waste water, community facilities, business, renewable energy, and electric and telecommunications loans and grants.

Increases are provided for both direct and guaranteed single family housing loans. In the face of the recession private mortgage lenders have retrenched leaving Rural Development’s loan programs as a principle source of home financing in rural areas. An additional $34 million is provided for direct loans, which will support a total program level of $1.2 billion in new loans. Regarding guaranteed loans, a fee increase is authorized which will allow the Agency to provide $24 billion in new loans at no cost to the government.

The House Appropriations Subcommittee on Agriculture passed a bill on June 30, which funds rural housing loans and grants at $1.322 billion, $101.8 million below the 2010 level but $71.9 million above the President’s 2011 budget request. Rural housing programs will most likely stay at 2010 levels.

The full House and Senate bills have not yet been made public. HAC will post additional information here as it becomes available.

Posted: July 16, 2010

Budget Proposes Level Funding for Most USDA Rural Housing Programs,
None for Rental Preservation Demo

February 1, 2010 – The Obama Administration’s budget for fiscal year 2011, released February 1, zeroes out initiatives that were created in past appropriations legislation but never authorized, including USDA’s rural rental preservation demonstration program, known as MPR. Section 515 rental housing would be increased from $69 million to $95 million; Section 515 funds can be used for some preservation activities, but not all that were available through MPR.

The budget does fund vouchers for tenants whose rents rise because of rental prepayment, because Section 542 authorizes a USDA voucher program. Without MPR, Section 521 Rental Assistance for preserved properties would not be needed, so there is no set-aside for preservation RA. The budget does propose to provide RA for newly constructed Section 515 rental and Section 514/516 farm labor housing.

Most other USDA rural housing programs would remain at FY 2010 levels, although Section 523 self-help technical assistance would be reduced somewhat to $37 million.

USDA Rural Development Program
(dollars in millions)

FY 2009 Approp.

FY 2010
Approp.

FY 2011 Budget

Loans

502 Single Fam. Direct

$1,121.5

$1,121

$1,200

502 Single Family Guar.

6,223.9

12,000

12,000

504 Very Low-inc. Repair

34.4

34.4

34

514 Farm Labor Hsg.

20

27.3

27

515 Rental Hsg. Direct

69.5

69.5

95.2

538 Rental Hsg. Guar.

129.1

129.1

129.1

Rental Prsrv. Revlg. Loans

2.9

1.8

0

Grants & Payments

504 Very Low-inc. Repair

29.7

31.6

31

516 Farm Labor Hsg.

9.1

9.9

10

523 Self-Help TA

38.7

41.9

37

533 Hsg. Prsrv. Grants

8.9

9.4

9.4

521 Rental Assistance (1-yr. contracts)

Preservation RA
New Construction 515 RA
New Construction 514/516 RA

902.5

(6)
(2.03)
(3.4)

980

(6)
(2.03)
(3.4)

966

0
(3)
(3)

542 Rural Hsg. Vouchers

5

16.4

18

Rental Prsrv. Demo. (MPR)

20

25

0

Rural Cmnty. Dev’t Init.

6.3

6.3

0

The budget documents explain the proposed termination of the MPR program this way:

The 2011 Budget does not fund the . . . multifamily housing demonstration program because there is no authority for the demonstration program. Moreover, the program primarily serves developers of multifamily housing properties, rather than the low- and very-low income tenant base that it is intended to help.

. . . For the multifamily housing programs, the 2011 Budget for USDA’s Rural Housing Service focuses assistance on the low- and very-low income tenant population. While repair and rehabilitation of the portfolio is important, funding through an open-ended demonstration program has been carried out since 2006 and the most cost-effective and justified repairs hae been achieved. At this point, additional funding in the demonstration program could be seen as over-subsidizing the multifamily housing property owners. Meanwhile, the traditional way to fund revitalization has been through the multifamily housing direct loan program with rehabilitation loans. While the 2011 Budget proposes to terminate funding for the multifamily housing revitalization demonstration program, it proposes to increase the multifamily housing direct loan program from $70 million to $95 million, ensure that more affordable rental housing opportunities are created for the very-low income tenant base in rural America.

__________________________

Posted: February 1, 2010
Last Updated: April 15, 2011

If you have problems accessing any of the material on this page, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.