The Housing Assistance Council is an independent, non-partisan and regularly responds to Congressional committees, Member offices, federal agencies, and policy advocacy coalitions with the research and information needed to make informed policy decisions. Our research work, Rural Data Portal, and Veterans Data Central all provide valuable, educational context to frame the rural policy conversation. If you want to know how a new program or policy could impact America’s small towns and rural places, please don’t hesitate to contact us at policy@ruralhome.org.

Policy News field

HAC’s Research Director Testifies on Persistent Poverty on Capitol Hill

On Tuesday, November 15, 2022 at 10:00 am EST the Subcommittee on Housing, Community Development and Insurance convened a hybrid hearing entitled, “Persistent Poverty in America: Addressing Chronic Disinvestment in Colonias, the Southern Black Belt, and the U.S. Territories.” Lance George, HAC’s Director of Research and Information, provided testimony during the hearing.

Watch the Hearing

For more information on Persistent Poverty, read The Persistence of Poverty in Rural America.

HAC Advises Housing Protections and Education for H-2A Farmworkers

HAC responded on October 24, 2022, to a request for information from the U.S. Department of Agriculture’s Farm Service Agency (FSA), which is developing a Farm Labor Stabilization and Protection Pilot Program.  FSA says this “grant program will use up to $65 million in American Rescue Plan Act funding to provide support for agricultural employers in implementing robust labor standards to promote a safe, healthy work environment for both U.S. workers and workers hired from Northern Central American countries under the seasonal H-2A visa program.”

HAC’s comments noted that currently, the H-2A program requires employers to provide free housing to visa holders that complies with a set of guidelines. While the law requires these living quarters to be inspected before occupancy, Department of Labor (DOL) data shows that neither federal nor state governments have allocated sufficient resources to conduct these inspections. In 38 states, there is no regulation of farmworker housing or dedicated agency to perform the required inspections. States that do have housing inspection systems in place are often under resourced.

Key takeaways:

  • Affordable, Decent Housing

    The pilot program should incentivize accessible, affordable, and decent housing for farmworkers

  • Wellness Checks

    This pilot program should fund farmworker organizations and partner organizations who are on the ground and familiar with farmworker communities to perform regular wellness checks

  • Survey of Conditions

    The pilot program should fund a detailed, comprehensive survey on farmworker housing conditions

  • Appropriate Communication

    Services and information should be provided in appropriate languages and using appropriate communication techniques

  • Training in Rights

    Trainings and informational resources should be made available that cover workers’ rights (including housing) and how to report exploitative practices

Policy News town

Rural Setaside Included in Major New HUD Homeless Funding Initiative – UPDATED 9/19/22

Webinar recording and slides posted

A webinar titled Funding Opportunities: Learn More About HUD’s Special NOFO to Address Rural Homelessness and New Stability Housing Voucher Program, cosponsored by HAC, the National Alliance to End Homelessness, and the National Association of Housing and Redevelopment Officials, was presented on September 15, 2022. The webinar recording and slide presentations are now available online.

Introduction

On June 22, 2022, HUD released a Notice of Funding Opportunity (NOFO) titled “Continuum of Care Supplemental to Address Unsheltered and Rural Homelessness.” A total of $322 million in recaptured Continuum of Care (CoC) funds is available, comprised of $267.5 million for an “Unsheltered Homelessness Set Aside” and $54.5 million for a “Rural Set Aside.”

Any CoC that registered for the FY 2022 CoC program competition may apply under this NOFO. Projects under the Unsheltered Homelessness Set Aside may serve any geographic area within the CoC. A CoC whose service area includes places that meet the rural definition (below) may apply for either the Unsheltered Homelessness Set Aside or the Rural Set Aside, or both.

Projects that will serve places where CoCs have not previously worked are targeted for special attention within the Rural Set Aside. When HUD scores applications, 10 points out of the total 100 available are specifically for “projects that serve individuals and families in geographic areas that have high levels of homelessness, housing distress, or poverty, and are located where CoC services have until now been entirely unavailable, such as, for example, Trust Lands and Reservations.”

This Competition

CoC applications are due to HUD on October 20, 2022. Each CoC must design its own “collaborative process” to develop its proposal, including a process for project applications. A local organizations or government entity must apply to its area CoC to be included in the CoC’s application to HUD.

This competition is separate from the FY 2022 CoC program competition, which has not yet opened. Applications and awards for this competition will not impact those for the FY 2022 competition.

Eligible Project Applicants

Nonprofit organizations, states, local governments, instrumentalities of state and local governments, Indian Tribes, TDHEs, and PHAs are eligible to apply for project funding under either set aside in this competition. For-profit entities are not eligible to apply or to be subrecipients of grant funds.

Rural Definition

Counties and county equivalents where the Rural Set Aside can be used are listed in the NOFO’s Appendix B.

The rural definition used for this competition was adopted in the HEARTH Act, which provides that a rural area is a county that meets one of three criteria:

  1. It is completely outside of OMB-designated standard metropolitan statistical areas (i.e., it is nonmetropolitan).
  2. It is in an OMB-designated metropolitan statistical area and at least 75% of its population lives in census blocks classified as non-urban.
  3. It is located in a state that has a population density of less than 30 persons per square mile (as reported in the most recent decennial census), and that has at least 1.25% of its total acreage under federal jurisdiction, provided that no metropolitan city in such state is the sole beneficiary of the grant amounts awarded under this NOFO.

Funds Available

The maximum amount that each CoC can request is listed in the NOFO’s Appendix A. These amounts are calculated differently for the two set asides. For the Unsheltered Set Aside, each CoC is eligible for its Preliminary Pro Rata Need (PPRN) for the FY 2022 CoC Program Competition or $60 million, whichever is less. For the Rural Set Aside, the maximum is set at 150% of the combined PPRNs for the FY 2022 CoC Program Competition of all of the CoC’s rural areas.

Grant Terms

Grants under this NOFO will be for three-year terms. Grants for hard costs are not renewable. HUD expects that others will be renewable under regular CoC competitions, though they caution that they cannot guarantee what will happen in the future.

Eligible Activities

The Rural Set Aside can be used to finance more activities than the Unsheltered Set Aside, as summarized in the table below.

 

 

Unsheltered Set Aside

 

Rural Set Aside

 

Eligible activities

 

Permanent housing

Supportive services only

HMIS

Joint transitional housing and permanent housing-rapid re-housing

Planning costs (capped at 3% of maximum award amount)

Unified Funding Agency costs (capped at 3% of maximum award amount)

 

Permanent housing

Supportive services only

HMIS

Joint transitional housing and permanent housing-rapid re-housing

Rent or utilities in some situations

Emergency shelter costs

Repairs to make housing habitable

Capacity building activities (capped at 20% of total funds a CoC requests)

Emergency food and clothing

Costs to use federal inventory property

Staff and overhead directly related to carrying out activities in this list

 

Ineligible activities

 

Acquisition

New construction

Rehabilitation

 

Planning costs

Unified Funding Agency costs

 

Eligible Participants/Definition of “Homeless”

Characteristics of people who will be eligible to participate in projects funded under each set aside in this NOFO – i.e., those who are considered to be “homeless” – are listed in the table below.

 

 

Unsheltered Set Aside

 

Rural Set Aside

 

Eligible participants

 

People who are literally homeless, “except that persons coming from transitional housing must have originally come from places not meant for human habitation, emergency shelters, safe havens, or institutions where they resided for 90 days or less and originally came from places not meant for human habitation, safe havens, or emergency shelters”

Domestic violence victims

 

People who are literally homeless

People who are precariously housed

Domestic violence victims

Youth or families considered homeless under other statutes, if CoC obtains HUD approval, limited to certain types of projects, and capped at 10% of award

 

 

Ineligible participants

 

People who are precariously housed

Youth or families considered homeless under other statutes

 

None

 

Plan for Severe Service Needs

Each CoC applying under this NOFO must develop a “Plan for Serving Individuals and Families Experiencing Homelessness with Severe Service Needs.” For both the Unsheltered and Rural Set Asides, large portions of the application and the potential scoring points are based on these plans.

The NOFO defines Severe Service Needs as

any combination of the following factors: facing significant challenges or functional impairments, including any physical, mental, developmental or behavioral health disabilities regardless of the type of disability, which require a significant level of support in order to maintain permanent housing (this factor focuses on the level of support needed and is not based on disability type); high utilization of crisis or emergency services to meet basic needs, including but not limited to emergency rooms, jails, and psychiatric facilities; currently living in an unsheltered situation or having a history of living in an unsheltered situation; experiencing a vulnerability to illness or death; having a risk of continued or repeated homelessness; and having a vulnerability to victimization, including physical assault, trafficking or sex work.

Most of the plans’ components must be provided in applications for either Unsheltered or Rural funds. The outline of plan contents is provided in the table below, along with indications of where the requirements differ for Rural Set Aside applications.

 

 

Plan Component

 

Required for Unsheltered Set Aside

 

Required for Rural Set Aside

a. Leveraging housing resources
1. Development of new units and creation of housing opportunities Y Y
2. Landlord recruitment Y Y
b. Leveraging healthcare resources Y Y
c. CoC’s current strategy to identify, shelter, and house individuals and families experiencing unsheltered homelessness
1. Current street outreach strategy Y Y
2. Current strategy to provide immediate access to low-barrier shelter and temporary housing for individuals and families experiencing unsheltered homelessness Y N
3. Current strategy to provide immediate access to low barrier permanent housing for individuals and families experiencing unsheltered homelessness Y Y
d. Updating the CoC’s strategy to identify, shelter, and house individuals experiencing unsheltered homelessness with data and performance Y N
e. Identify and prioritize households experiencing or with histories of unsheltered homelessness Y Y
f. Involving individuals with lived experience of homelessness in decision making Y Y
g. Supporting underserved communities and supporting equitable community development Y Y

A different section of the NOFO contains a paragraph – which also appears in the FY 2021 CoC program NOFO – requiring applicants to identify steps they “will take” to ensure that traditionally marginalized populations (such as racial and ethnic minorities and persons with disabilities) will be able to meaningfully participate in “the planning process.” It is not clear whether, or how, this requirement would apply to the process of developing the severe needs plan, since this plan must be completed in order to be included in the application along with the proposal for steps applicants “will take” in developing future plans.

Application Scoring

For the Unsheltered Set Aside, HUD will select CoCs for awards based on the CoCs’ scores. All projects of the selected CoCs will be funded, up to the funding cap for those CoCs. For the Rural Set Aside, however, HUD will score the individual projects included in each application and select the highest scoring projects, up to the CoC’s maximum funding amount.

HUD will score the rural projects on a 100-point scale. Up to 50 points will correspond to HUD’s score for the CoC’s overall Rural Set Aside application. Up to 40 points will be based on the CoC’s ranking of the project (CoCs are required to rank all project applications for either set aside). Finally, another 10 points may be awarded to “projects that serve individuals and families in geographic areas that have high levels of homelessness, housing distress, or poverty, and are located where CoC services have until now been entirely unavailable, such as, for example, Trust Lands and Reservations.”

HUD may adjust its final project selections to ensure that at least one CoC in each HUD region is funded and that not more than 10 CoCs from a single state are funded.

Links for Additional Information

HUD email address for questions: SpecialCoCNOFO@hud.gov

HUD page where all information and supporting resources for this competition will be posted: https://www.hud.gov/program_offices/comm_planning/coc/specialCoCNOFO

HUD Continuum of Care program page: https://www.hud.gov/program_offices/comm_planning/coc

HUD page to locate a CoC serving a particular area: https://www.hudexchange.info/grantees/find-a-grantee/

HUD standard funding opportunity page for this NOFO: https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps/fy21coc_urh

Official grants.gov page for this NOFO: https://www.grants.gov/web/grants/view-opportunity.html?oppId=341301

Site where CoC applications will be entered: https://esnaps.hud.gov/

 

*   *   *

New HUD Rural Homelessness Initiative Announced

On June 22 HUD announced a $365 million Initiative for Unsheltered and Rural Homelessness that will be distributed through Continuums of Care (CoC) and public housing authorities (PHAs) by means of two Notices of Funding Opportunity. The application deadline for CoCs is October 20. HUD is using recaptured CoC and Housing Choice Voucher funding from prior fiscal years to support the initiative.

The initiative includes $322 million in CoC program grants to be distributed by HUD’s Community Planning and Development division:

  • $267.5 million to fund homeless outreach, permanent housing, supportive services, and other costs as part of a comprehensive community approach to solve unsheltered homelessness in 20-40 communities with high incidences of unsheltered homelessness; and
  • $54.5 million targeted to rural communities, prioritizing those with high need but a history of being unable to access CoC grants. HUD is utilizing congressionally granted authority to expand the eligible uses for these funds beyond normal restrictions to enable rural communities to apply for grants to support capacity-building, transportation, and other needs more acutely felt in rural areas.

The division of Public and Indian Housing will distribute $43 million — approximately 4,000 new incremental vouchers — which will be allocated to PHAs with a priority for those that are partners in comprehensive community approaches to solve homelessness.

Policy News field

HAC Submits Community Reinvestment Act Comments

 

The Community Reinvestment Act is essential to communities across the nation. Through CRA, financial services have been made available to many places that might otherwise be overlooked. In spring 2022 the three federal agencies that regulate banks and other lenders – the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation – jointly issued a proposed new CRA rule. This proposal, and the many efforts which will follow, are critically important to ensure not only that current CRA-related activities and investments continue but that they expand to reach populations and communities for which access to affordable finance is still elusive.

This is especially important in rural communities across the country as many are considered high credit need areas. CRA modernization will help incentivize more lending in these areas and increase community development activities. As rural communities continue to change, the CRA must adjust as well to reflect modern lending practices. The proposed rule has the potential to further increase lending in high need rural areas, but HAC has a number of recommendations to optimize CRA’s impact.

HAC believes a final rule could further increase CRA’s impact on underserved rural communities if it:

  1. includes activities in rural communities as an additional impact factor, informed by the most precise, density-based definitions already used by policymakers and the research community;
  2. ensures uniform treatment of all CDFIs and supports the most transformative CDFI activities in underserved rural communities;
  3. modifies the definition of affordable housing to enable housing providers to respond effectively to the unique income demographics and constraints on government capacity of rural communities;
  4. clarifies how consequential the impact factors can be for a bank’s community development test performance and overall rating; and
  5. prevents banks with a substantial number of rural assessment areas from “gaming” the NPR’s performance benchmarks under the retail lending test.

To learn more about HAC’s full recommendations, read our full comment letter.

Other comments submitted to OCC are posted online and can be reviewed here.

Policy News town

HAC Concerned about Buy America Requirements

HAC Comments to USDA, July 2022

On July 29, the Housing Assistance Council (HAC) submitted comments to the U.S. Department of Agriculture (USDA), which proposed to establish waivers from Buy America requirements for purchases of de minimis, small grants, and minor components of infrastructure projects.

Key Takeaways

  • Housing and community facilities should not be considered public infrastructure under the Build America, Buy America Act.
  • If housing and community facilities are considered public infrastructure, it would be in the public interest to waive the Buy America preference for USDA’s programs to finance these construction projects so that scarce funds and staff resources can be devoted to addressing the current housing crisis.
  • Waivers for purchases of de minimis, small grants, and minor components of infrastructure projects would also be in the public interest.

HAC Comments to HUD, July 2022

HAC expressed concern about the impact of “Buy America” requirements on affordable housing in comments it submitted to the U.S. Department of Housing and Urban Development (HUD) on July 15, 2022.

Key Takeaways

  • Buy America preferences should not apply to assisted housing. HUD’s priority should be to address the affordable housing crisis. Furthermore, the law defines infrastructure as projects that benefit the general public, while assisted housing is available to only a subset of the general population.
  • HUD should not apply Buy America preferences to owner-occupied housing because the Office of Management and Budget has specifically stated that private homes are not considered to be infrastructure.
  • HUD should not apply Buy America preferences when HUD assistance is used for infrastructure that is built solely to support affordable housing, as is the case with the Self-Help Homeownership Opportunity Program (SHOP).
  • HUD should not apply Buy America preferences to housing that receives less than $250,000 in federal funding, to developments with fewer than eight units, or to situations when HUD funding covers only a small portion of the per unit development cost.
  • HUD should issue expedited waivers for materials that experience price spikes.
  • HUD should provide guidance to help reduce administrative burdens on entities that receive HUD funding.

Build America, Buy America

HUD, the U.S. Department of Agriculture (USDA), and other federal agencies are subject to a “Build America, Buy America” (BABA) requirement in the Infrastructure Investment and Jobs Act of 2021, which mandates that iron, steel, manufactured products, and construction materials used in infrastructure projects be American made. The provision applies to most federally funded infrastructure projects; it is not limited to projects funded through the 2021 Act.

Any preferences for American-made products that were in effect before the Infrastructure Act passed remain in place.

Federal agencies were required to publish initial lists showing which of their programs could be subject to the Buy America preference. The Office of Management and Budget issued guidance for federal agencies regarding compliance and set up a website to track agency requests for waivers.

HUD Implementation

On June 1, HUD requested public comment to help implement BABA for its programs. It asked questions such as what HUD-financed projects might fall under exemptions from the preference, how materials are currently sourced, and more. It also asked what HUD programs might be considered to fund infrastructure in addition to those on its initial list, which includes HOME, the Community Development Block Grant program, and SHOP.

The deadline for comments was later extended to July 15.

HUD has moved to waive the buy America requirement while the department works on implementing it. HUD announced it was providing two waivers, both effective on May 14 (the statutory deadline for implementation) unless it issued a later announcement changing the date. HUD’s general waiver is effective for six months. Its waiver for Tribal recipients of HUD funds lasts for one year.

USDA Implementation

USDA did not include any of its Rural Development agency’s housing or community facilities programs on its initial list of infrastructure programs, which focuses instead on utilities and broadband programs. In a recent request to OMB, however, RD did include housing and CF along with others on a list of programs it intends to evaluate under the new law.

USDA Rural Development, like HUD, hopes to delay the requirements’ effectiveness temporarily. It asked OMB to approve a waiver that would last six months after the date of approval.

Treasury Implementation

The Treasury Department’s list of programs that may be subject to BABA’s requirements does not include any Community Development Financial Institution Fund programs. It does include the Homeowner Assistance Fund, a program intended to help homeowners impacted by the coronavirus pandemic, and the Coronavirus State and Local Fiscal Recovery Funds programs, which help state, local, and Tribal governments and can be used for housing.

 

Policy News from Congress

Senate Proposes Rural Housing Funding Increases

The Senate Appropriations Committee proposes rural housing funding levels for the upcoming fiscal year much like those in the administration’s budget request and the bill passed by the House. On July 28, the committee released its version of all 12 appropriations bills for fiscal 2023, which begins on October 1, 2022.

The fate of these bills is unclear. The Senate has not scheduled action on any of them. The House has passed a “minibus” bill that combines appropriations measures for several agencies, including the U.S. Department of Agriculture (USDA) and the Department of Housing and Urban Development (HUD), but the fiscal year is expected to begin with a continuing resolution holding government spending at FY22 levels. Final appropriations are not likely to be completed until after the midterm elections in early November.

— HAC’s analysis of FY23 appropriations for HUD is available here.  —

Homeownership

The Senate committee’s USDA bill would keep most of the rural single-family housing programs at or near their current funding levels. It endorses the request in USDA’s budget to provide almost $21 million to expand the Native American relending pilot program, which enlists a Native Community Development Financial Institution to work with tribes and Native homebuyers.

Rental Housing

The Senate bill would provide $100 million for Section 515, twice as much as in FY22 but lower than the $200 million requested by the administration – which proposed to finance new Section 515 construction for the first time since fiscal year 2011 – and the $150 million in the House bill. Like the House, this bill also rejects USDA’s request for enough Section 521 Rental Assistance (RA) funding to renew the RA contracts created under the American Rescue Plan Act.

To support efforts to preserve existing USDA-financed rental housing, the bill would adopt legislative language proposed in USDA’s budget, allowing RA to be “decoupled” from the Section 515 and Section 514 mortgage programs. As a last resort, if there is no other way to preserve a property as affordable housing, RA could continue to be used even after the mortgage is paid off. The Senate bill would impose a limit on this tactic so that it could be used for no more than 15,000 units in FY23. That ceiling seems unlikely to pose a problem: HAC has reported that 21,693 units left the Section 515 portfolio over a five-year period from early 2016 to 2021, an average of fewer than 4,350 units per year.

In another preservation effort, the bill would more than double technical assistance funding to help nonprofits and public housing authorities purchase and preserve USDA-financed rental properties. The program, which received $2 million in FY22 and was not included in the administration’s budget, would get $5 million.

The explanatory statement released to accompany the bill – equivalent to a committee report for a bill passed by a congressional committee – criticizes USDA for not having developed a rental preservation plan.

Multifamily Technical Assistance Report.—The Committee reminds the Department that the fiscal year 2017 Appropriations Act required the Department to conduct research and identify policy, program reforms, and incentives for preserving rural rental housing and a report summarizing those findings to be submitted to the Committee 2 years later. The report is now 3 years overdue and the Committee directs the Department to submit the completed report within 30 days of enactment of this Act.

Capacity Building

The Senate bill would increase funding for the Rural Community Development Initiative (RCDI) from $6 million in FY22 to $7 million in FY23. The House-passed bill would provide $8 million for RCDI next year, and the administration’s budget requested $12 million.

The Senate bill includes $10 million for the Rural Partners Network. It would also provide $15 million for the Institute for Rural Partnerships, first funded in the FY22 USDA appropriations bill.

Community Facilities

The explanatory statement accompanying the Senate committee’s bill tells USDA to find ways to expand community eligibility for community facilities grants.

Community Facilities Eligibility.—The Committee is concerned by the ineligibility of projects under the Community Facilities Grant program located in significantly rural and low-income areas that are defined as distressed but do not qualify for grant funding under this program. The Department is required to evaluate the program’s income and service area-based eligibility standards and identify ways to approve community access to these grants, including whether basing eligibility on national rather than state median household income could benefit areas located in predominantly poor, rural States.

 

USDA Rural Dev. Prog. (dollars in millions) FY21 Final Approp. Amer. Rescue Plan Act FY22 Final Approp. FY23 Budget FY23 House Bill FY23 Senate Bill
502 Single Fam. Direct $1,000 $656.60 $1,250 $1,500 $1,500 $1,500
Nat. Amer. Single Fam. Demo 20.8 12 20.8
502 Single Family Guar. 24,000 30,000 30,000 30,000 30,000
504 VLI Repair Loans 28 18.3 28 50 28 30
504 VLI Repair Grants 30 32 45 32 32
515 Rental Hsg. Direct Lns. 40 50 200 150 100
514 Farm Labor Hsg. Lns. 28 28 50 30 35
516 Farm Labor Hsg. Grts. 10 10 18 16 14
521 Rental Assistance 1,410 100 1,450 1,564 1,494 1,488
523 Self-Help TA 31 32 40 33 32
533 Hsg. Prsrv. Grants 15 16 30 16 16
538 Rental Hsg. Guar. 230 250 400 300 400
Rental Prsrv. Demo. (MPR) 28 34 75 40 45
542 Rural Hsg. Vouchers 40 45 38 38 50
Rental Prsrv. TA 2 2 0 2 5
Community Facil. Loans 2,800 2,800 2,800 2,800 2,800
Community Facil. Grants 32 40 52 68.1 100
Rural Cmnty. Dev’t Init. 6 6 12 8 7
Tribal Colleges CF Grts 5 10 10 10 10
Cong. Directed Spending* 126.9 202.3
Community Facil. Guarantees 500 650 500 650 650

* Congressionally Directed Spending (earmarks) accounts for a large portion of the proposed Community Facilities Grant spending in both the House and Senate bills. Specific projects are listed in the House and Senate committee reports.

House Passes USDA Funding Bill

July 20, 2022 – The full House of Representatives passed the USDA appropriations bill as part of a “minibus” that combines several funding bills, including those for USDA and HUD. The Senate has not yet begun actions on FY23 appropriations, and a continuing resolution is expected to be needed to begin the fiscal year on October 1, 2022.

House Funding Bill Includes Modest Increases for Some Rural Housing Programs, Though Less Than USDA Requested

On June 14, the House Agriculture Appropriations Subcommittee approved a funding bill for fiscal year 2023, which begins on October 1, 2022. The House bill proposes less funding for several rural housing programs than the administration’s budget did, while also rejecting the administration’s cut in Community Facilities guaranteed loans.

The full committee will consider the bill on June 23.

The House would increase the Section 515 rental housing program and the MPR rental preservation program above current levels, but not to the extent proposed by the administration. It would raise the Rural Community Development Initiative capacity building program from this year’s $6 million to $8 million in FY23 rather than the $12 million USDA requested. The rental preservation technical assistance program would receive $2 million again under the House bill, although USDA did not propose any funding for it.

It is not clear whether the bill is intended to fund renewals of the Section 521 Rental Assistance contracts added by the American Rescue Plan Act, but it proposes lower funding for Section 521 than the administration’s budget, which explicitly stated it did include the new contracts. Also, the House bill does not adopt USDA’s proposal to “decouple” the Section 521 Rental Assistance program from the Section 515 and 514/516 programs, which would allow properties to continue to receive Rental Assistance after their USDA mortgages end.

Like USDA’s budget, the House bill would expand USDA’s pilot program for Native American mortgage lending, which provides funds to Native CDFIs to be reloaned to homebuyers.

Budget Requests Increases in Most Rural Housing Programs

The Biden Administration’s budget for fiscal year 2023 proposes funding increases for almost every U.S. Department of Agriculture rural housing program, along with some important program changes for preservation of aging rental housing.

The March 28, 2022 budget release is only the first step in the process of developing federal appropriations for the fiscal year that begins on October 1, 2022. HAC held a webinar to review the budget’s contents and what to expect over the coming months; view the slides and recording here.

Rental Housing

The USDA budget proposes to quadruple Section 515 rental housing from $50 million in FY22 to $200 million in FY23, with the funds to be used for preserving existing Section 515 properties. The Multifamily Preservation and Revitalization program, which finances efforts to upgrade and maintain aging units constructed with Section 515 financing or the Section 514/516 farmworker housing program, would jump from $34 million this year to $75 million in FY23.

Farmworker housing loans and grants would almost double, with $6 million in Section 521 Rental Assistance set aside for new Section 514/516 units. The Section 538 loan guarantee program would see a large increase as well. (Details are provided in the table below.)

The $1.564 billion requested for Section 521 Rental Assistance renewals “will enable 272,000 existing contracts to be renewed, including making permanent the approximately 27,000 units that were brought into the program by the American Rescue Plan Act supplemental funding,” according to USDA’s budget explanation. The same document states, however, that RA assisted 284,194 tenant households in FY21.

The budget also asks Congress to “decouple” Rental Assistance from Section 515. Currently the programs are linked: RA cannot be made available to a property unless it has a USDA Section 515 or 514 loan. Separating them, so that RA could be offered after a property pays off its USDA mortgage, would help keep properties affordable for their tenants.

To protect tenants whose properties leave the USDA portfolio without decoupling, the administration proposes to provide $20 million in HUD Tenant Protection Vouchers. Based on the assumption that decoupling and the availability of HUD vouchers will eliminate the need for new USDA vouchers, the budget requests only enough Section 542 funding to renew existing assistance.

Homeownership

The budget proposes to increase funding for all USDA’s homeownership programs. It would also provide $20.8 million to expand the Native American Section 502 Relending pilot program. The pilot has enabled Native Community Development Financial Institutions to assist Native American homebuyers in tribal communities of South Dakota and North Dakota.

Rural Partnership Program

Pursuing an idea proposed in the Build Back Better Act, which has not been passed by Congress, the budget proposes $39 million for the Rural Partnership Program. In a statement about the budget, Agriculture Secretary Tom Vilsack described it as “a renewed and expanded initiative to leverage USDA’s extensive network of county-based offices to help people in high poverty counties, including energy communities.”

Placemaking

The budget would provide $3 million for the Rural Placemaking Innovation Challenge “to provide planning support, technical assistance, and training to foster placemaking activities in rural communities.” [NOTE: This sentence was corrected on March 29 to say $3 million. When this post was published, it stated incorrectly that the amount was $3 billion.]

Energy Efficiency and Climate Resilience

All USDA housing production would be required to “improve energy or water efficiency, indoor air quality, or sustainability improvements, implement low-emission technologies, materials, or processes, including zero-emission electricity generation, energy storage, building electrification, or electric car charging station installations; or address climate resilience of multifamily properties.”

 

Policy News from Congress

Senate’s HUD Funding Bill Increases SHOP, Leaves Out New Manufactured Housing Proposal

Funding increases for many Department of Housing and Urban Development (HUD) programs would be provided by a just-released Senate Appropriations Committee bill, including a raise for the Self-Help Homeownership Opportunity Program (SHOP) to $17 million from its current $12.5 million level.

— HAC’s analysis of appropriations for USDA’s rural housing programs for FY23 is available here. —

The committee’s proposal for fiscal year 2023 HUD funding does not, however, include the new $500 million Manufactured Housing Improvement and Financing Program that was adopted by the House in its HUD appropriations bill (described in more detail below). Neither the Senate bill nor its House counterpart includes the new Housing Supply Fund proposed in the administration’s budget (also described below).

The Senate bill also does not match either the House’s proposal to create 140,000 new vouchers, or the HUD budget’s proposal to add 200,000 vouchers targeted to individuals fleeing domestic violence and persons experiencing homelessness.

Some other important measures are included in the Senate committee’s bill in addition to its funding provisions. One would reauthorize the Native American Housing Assistance and Self-Determination Act (NAHASDA). Another, the Reforming Disaster Recovery Act, would permanently authorize the CDBG Disaster Recovery program and make other changes intended to get disaster recovery aid to survivors more quickly.

The Senate Appropriations Committee released the HUD funding bill on July 28 along with other appropriations bills for fiscal 2023, which begins on October 1, 2022. The fate of these proposals is unclear. The Senate has not scheduled action on any of them. The House has passed a “minibus” bill that combines appropriations measures for several agencies, including HUD and the U.S. Department of Agriculture, but the fiscal year is expected to begin with a continuing resolution holding government spending at FY22 levels. Final appropriations are not likely to be completed until after the midterm elections in early November.

HUD Program (dollars in millions) FY21 Final Approp. FY22 Final Approp. FY23 Admin. Budget House Bill Senate Bill
CDBG $3,475 $4,841* $3,770 $3,300 $3,525
HOME 1,350 1,500 1,950 1,675 1,725
Self-Help Homeownshp. (SHOP) 10 12.5 10 12.5 17
Veterans Home Rehab 4 4 4 0 4
Tenant-Based Rental Asstnce. 25,778 27,370 32,130 31,043 30,182
VASH setaside 40 50 0 50 85
Tribal VASH 5 5 5 5 5
Project-Based Rental Asstnce. 13,465 13,940 15,000 14,940 14,687
Public Hsg. Capital Fund 2,942 3,388 3,720 3,670 3,405
Public Hsg. Operating Fund 4,864 5,064 5,060 5,063 5,064
Choice Neighbrhd. Initiative 200 350 250 450 250
Native Amer. Hsg. 825 1,002 1,000 1,000 1,052
Homeless Assistance Grants 3,000 3,213 3,576 3,604 3,545
Hsg. Opps. for Persons w/ AIDS 430 450 455 600 468
202 Hsg. for Elderly 855 1,033 966 1,200 1,033
811 Hsg. for Disabled 227 352 288 400 288
Fair Housing 72.6 85 86 86 85
Healthy Homes & Lead Haz. Cntl. 360 415 400 415 390
Housing Counseling 57.5 57.5 65.9 70 63

* The substantial increase in CDBG funding for FY22 was driven nearly entirely by the return, after a 10-year absence, of $1.5 billion for the Economic Development Initiative for the purpose of funding Community Projects/Congressionally Directed Spending (popularly known as “earmarks”).

House Passes HUD Appropriations

July 20, 2022 – The full House of Representatives passed the HUD appropriations bill as part of a “minibus” that combines several funding bills, including those for USDA and HUD. The Senate has not yet begun actions on FY23 appropriations, and a continuing resolution is expected to be needed to begin the fiscal year on October 1, 2022.

House HUD Appropriations Bill Proposes New Vouchers and New Manufactured Housing Program

The House’s draft FY23 appropriations bill for HUD would increase the department’s total funding above both the FY22 level and the amount requested in the administration’s budget. (See table below.) The House Appropriations Committee estimates the bill would fund more than 140,000 new housing vouchers targeted to individuals and families experiencing or at risk of homelessness and approximately 5,600 new units for seniors and persons with disabilities.

The House’s HUD bill would provide $500 million for a new Manufactured Housing Improvement and Financing Program to preserve and revitalize manufactured homes and their communities (including pre-1976 mobile homes). Grants would be distributed through a competition, with eligible applicants including states, local governments, Tribes, nonprofits, CDFIs, resident-owned manufactured housing communities or coops, and possibly other entities. Funds could be used for “infrastructure, planning, resident and community services (including relocation assistance and eviction prevention), resiliency activities, and providing other assistance to residents or owners of manufactured homes, which may include providing assistance for manufactured housing land and site acquisition.”

House appropriators propose to increase the total funding for HOME to $1.675 billion from FY22’s $1.5 billion and to set aside $50 million of it to provide down payment assistance for first-time, first-generation home buyers.

The SHOP program would remain at its FY22 level of $12.5 million. The bill does not include funding for the small $4 million Veterans Home Rehabilitation program.

The bill would not create the Housing Supply Fund proposed in the administration’s budget.

The House Transportation-HUD appropriations subcommittee will hold a markup on June 23 and the full House Appropriations Committee is scheduled to consider the bill on June 30.

HUD Budget Proposes New Housing Investments

The Biden Administration’s budget for fiscal year 2023 proposes substantial investments in existing Department of Housing and Urban Development (HUD) programs (details are in the table below) and new initiatives targeted to:

  • Increasing affordable housing supply;
  • Expanding rental assistance and increasing its impact on households experiencing homelessness and family mobility; and
  • Addressing climate change.

The March 28 budget release is only the first step in the process of developing federal appropriations for the fiscal year that begins on October 1, 2022. HAC held a webinar to review the budget’s contents and what to expect over the coming months; view the slides and recording here.

Increasing Affordable Housing Supply

The budget proposes $50 billion in mandatory spending to increase and streamline affordable housing production. HUD would administer $35 billion of this total as a Housing Supply Fund, consisting of two elements:

  • $25 billion in formula grants to be distributed to “State and local housing finance agencies and their partners, territories, and Tribes” to support streamlined financing tools for multifamily and single-family units, producing housing for both renters and homebuyers. The funding is intended to facilitate the production and preservation of smaller developments that struggle to obtain financing in the current housing finance system. The budget specifically notes that “many rural and midsize jurisdictions need a path to development that includes smaller building footprints to better integrate with existing communities.”
  • $10 billion in grants to: 1) support state and local jurisdictions that adopt policies that remove barriers to affordable housing and development; and 2) incentivize funding of housing-related infrastructure such as environmental planning, transportation, and water/sewer infrastructure.

The remaining $15 billion in mandatory funding is to be administered by the Department of the Treasury, divided into:

  • $10 billion in additional Low Income Housing Tax Credits (LIHTC); and
  • $5 billion in grants to Community Development Financial Institutions to support financing for construction, acquisition, rehab and preservation of rental and homeownership housing, with an emphasis on increasing the participation of small-scale developers and contractors. The grants will seek to:
    • increase the climate resiliency and energy efficiency of affordable housing;
    • focus on underserved markets, including single-family, small properties (1-4 units) and small multifamily properties with fewer than 100 units;
    • expand homeownership opportunities by targeting single-family properties for individuals and families with incomes up to 120 percent of the Area Median Income (AMI) and up to 150 percent of AMI in high cost areas (including acquisition and rehabilitation); and
    • preserve affordable housing that is at risk of conversion to market rate.

Additional investments in existing HUD programs designed to complement the Housing Supply Fund grants include $2 billion in funding for the HOME Investment Partnerships program ($150 million above the FY 2022 enacted level), $100 million in funding for 1,100 new units in the Section 202 Supportive Housing for the Elderly Program, and 900 new units in the 811 Permanent Supportive Housing Program for Persons with Disabilities.

Rental Assistance, Homelessness, and Family Mobility

In addition to renewing all existing project-based rental assistance (PBRA) contracts and Housing Choice Vouchers (HCV) currently in use, the budget proposes $1.6 billion in funding to expand the Housing Choice Voucher program by 200,000 subsidies – the largest one-year expansion since the program’s inception – with the incremental subsidies targeting individuals fleeing domestic violence and persons experiencing homelessness. This effort to combat homelessness is coupled with a $576 million increase in the Homeless Assistance Grants account to $3 billion. The budget also includes $445 million in mobility services connected to use of HCVs in a broad range of communities.

Addressing Climate Change

In addition to the sustainability and resilience incentives in the Housing Supply Fund, the HUD budget includes:

  • $300 million to increase energy efficiency and climate resilience in public housing;
  • $150 million in funding for housing initiatives on Native American lands to increase energy efficiency and climate resilience and improve water conservation; and
  • $250 million to rehabilitate HUD multifamily properties to be healthier, more energy efficient, and climate-resilient.

 

Policy News field

HAC’s Comments on Duty to Serve for Native American Communities

The FHFA requested comments on Fannie Mae and Freddie Mac’s Duty to Serve plans for Native American communities. Dave Castillo, CEO of Native Community Capital and a HAC Board Member, provided oral comments, accompanied by longer written comments, on behalf of HAC. Housing finance in Native American communities has been a stunning example of both racial and geographic inequity at both the policy and private market levels for decades. If implemented robustly, Duty to Serve has the potential to improve the lives of people living in the most underserved communities. HAC has several improvements that we think should be made to best serve Native communities’ need:

Key Takeaways

  • Allow GSE Equity Investments for Native CDFIs

    Equity investments would allow CDFIs serving Native communities to strengthen their capital structures, leverage additional debt capital, and, as a result, increase lending and investing in their communities.

  • Increase purchase goals for mortgages on Native lands

    Fannie Mae has no set goal and Freddie Mac’s is very modest. Increasing these would show the Enterprises’ commitments to Native housing and help Native communities house more people adequately.

  • Establish Native lending teams

    These teams would focus on Native communities and help ensure that these communities are treated equitably and with cultural competency.

  • Create Native-tailored mortgage products

    Tribal lands have unique property ownership structures and creating loan structures that can meet Native communities’ specific needs would help increase investments and economic growth.

  • Increase LIHTC investment in Native communities

    Despite how successful LIHTC has been in many communities, rural and Native communities have not been able to benefit equitably from these tax credits. The Duty to Serve plans have goals to invest in rural communities but adding goals for Native communities specifically would ensure that they are served as well.

Policy News from Congress

HAC’s Stakeholder Comments on Rural Housing Service Programs

HAC submitted comments to Senators Tina Smith (D-MN) and Mike Rounds (R-SD), the Chair and Ranking Member of the Housing, Transportation, and Community Development Subcommittee of the Senate Banking Committee, in response to their call for recommendations on how to improve the U.S. Department of Agriculture’s (USDA) Rural Housing Service (RHS) programs. RHS programs are a critical source of housing for our nation’s small towns and rural places. HAC hopes that Senators Smith and Rounds will use these stakeholder comments to help improve the efficiency and impact of RHS programs, especially as more multifamily properties leave the USDA portfolio.

Topline Takeaways  

  • Multifamily

    HAC strongly recommends that the Senators authorize important multifamily preservation programs and simplify the process for transferring properties to non-profit owners in order to help more properties remain in RHS programs and maintain their affordability. HAC also recommends that the Senators investigate the rental assistance programs available in rural areas and extend these to more rural renters.  

  • Single family

    HAC recommends that the Senators improve the Section 504 program which provides grants for single family home repair. Simplifying and making this program’s funds more accessible would help more families stay in their homes and preserve single family homeownership. 

  • Capacity building

    Many communities have the willingness and desire to help improve their housing opportunities but lack the technical skill or capacity to accomplish their goals. HAC recommends authorizing capacity building programs that would help communities develop the tools they need to thrive. 

  • RHS staffing and operations

    HAC recommends improving the workflow within RHS and updating the technology the RHS staff uses to increase efficiency and help RHS better serve rural communities.  

Read HAC’s Comments

HAC Comments on RHS Reforms

USDA Rural Development State Directors Named

This table identifies State Directors for U.S. Department of Agriculture Rural Development offices named by the Biden Administration as of July 6, 2022. These positions do not require Senate confirmation.

HAC will keep this list up to date as we learn of new appointments. Please send additions or corrections to HAC staff.

 

STATE STATE DIRECTOR
Alabama (AL) Nivory Gordon, Jr.
Alaska (AK) Julia Hnilicka
Arizona (AZ) Charlene Fernandez
Arkansas (AR) Jill Floyd
California (CA) Maria Gallegos Herrera
Colorado (CO) Armando Valdez
Connecticut (CT) Scott Soares
Delaware (DE) David Baker
Florida (FL) and Virgin Islands (VI) Lakeisha Hood
Georgia (GA) Reggie Taylor
Hawaii (HI) and Western Pacific Chris Kanazawa
Idaho (ID) Rudy Soto
Illinois (IL) Betsy Dirksen Londrigan
Indiana (IN) Terry Goodin
Iowa (IA) Theresa Greenfield
Kansas (KS) Christy Cauble Davis
Kentucky (KY) Thomas Carew
Louisiana (LA) Deidre Deculus Robert
Maine (ME) Rhiannon Hampson
Maryland (MD) David Baker
Massachusetts (MA) Scott Soares
Michigan (MI) Brandon Fewins
Minnesota (MN) Colleen Landkamer
Mississippi (MS) Trina George
Missouri (MO) Kyle Wilkens
Montana (MT) Kathleen Williams
Nebraska (NE) Kate Bolz
Nevada (NV) Lucas Ingvoldstad
New Hampshire (NH) Sarah Waring
New Jersey (NJ) Jane Asselta
New Mexico (NM) Patricia Dominguez
New York (NY) Brian Sheldon Murray
North Carolina (NC) Reginald Speight
North Dakota (ND) Erin Oban
Ohio (OH) Jonathan McCracken
Oklahoma (OK) Kenneth Corn
Oregon (OR) Margaret Hoffmann
Pennsylvania (PA) Bob Morgan
Puerto Rico (PR) Luis R. Garcia (acting)
Rhode Island (RI) Scott Soares
South Carolina (SC) Saundra Glover
South Dakota (SD) Nikki Gronli
Tennessee (TN) Arlisa Armstrong
Texas (TX) Lillian Salerno
Utah (UT) Michele Weaver
Vermont (VT) Sarah Waring
Virgin Islands (VI) Lakeisha Hood
Virginia (VA) Perry Hickman
Washington (WA) Helen Price Johnson
West Virginia (WV) Ryan Thorn
Wisconsin (WI) Julie Lassa
Wyoming (WY) Glenn Pauley