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).

* 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.

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.

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.

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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.