The Senate Agriculture Appropriations Subcommittee marked up its proposal for fiscal year 2018 funding for USDA, including the rural housing programs, on July 18. The full Senate Appropriations Committee is scheduled to consider the bill on July 20. The text of the bill will not be available until after the full committee markup. HAC has learned what the funding levels are for a few of the rural housing programs, and a few are available in statements released by the subcommittee (here and here). Funding levels not shown in the table below will be available when the bill text is released.

The House Appropriations Committee completed work on its bill on July 12. It adopted one housing-related change to the subcommittee’s bill, making H-2A visa holders eligible for Section 514/516 farmworker housing. [tdborder][/tdborder]

a. Would become part of Rural Economic Infrastructure Grant program.
b. Budget proposes to rescind unobligated funds from three programs: $11 million from Sec. 523 self-help, $4 million from Sec. 514/516 farm labor housing, and $4 million from MPR.
c. Includes $40 million in advance funding for FY18, so total available in FY17 is $1.365 billion and total available in FY18 would be $1.385 billion.

On June 27, 2017 the House Appropriations Committee released its draft agriculture appropriations bill for fiscal year 2018. The Agriculture Appropriations Subcommittee will review the bill on June 28.

The House bill does not eliminate rural housing programs, as was proposed by the Administration. It does reduce funding for many programs below FY17 levels, as indicated in the table below.

It does follow the Administration in defunding the Rural Community Development Initiative, a capacity-building program. It does not specifically mention the Administration’s proposal to reorganize Rural Development and some other parts of USDA, but it does prohibit use of any funding to reorganize offices, programs, or activities.

The House bill adopts the Rural Economic Infrastructure Account proposed in the Administration’s budget, and moves several Rural Development programs into that pool: Section 504 grants, Section 533 grants, community facilities grants, grants for telemedicine distance learning, and broadband transmission grants. The Administration would eliminate Section 533 Housing Preservation Grants rather than moving them to the infrastructure account. The House would provide $122.7 million for the new account rather than the $162 million proposed by the Administration. Like the Administration’s budget, the House would set aside half of its funding total – $60 million – for Appalachia. The House also establishes a minimum amount for each program, 15 percent of the total, or $18.4 million. It is not entirely clear whether that minimum would apply to Section 504 and 533 combined, or to each separately.

For rental housing preservation, the House bill follows the final FY17 appropriations law. Like that legislation, it does not extend the voucher program to cover properties where mortgages matured, but it does require USDA to help nonprofits and PHAs to preserve rental properties. Nonprofits and PHAs would be allowed to receive returns on investment and asset management fees when purchasing rental properties to preserve them. [tdborder][/tdborder]

The omnibus spending bill for FY17, announced on May 1, provides full funding for USDA and HUD housing programs. It rejects the cuts in these programs proposed by the Trump Administration.

For many programs of both USDA RD and HUD, the omnibus includes the highest amount from the bills considered in the House or Senate last year. Some programs – such as USDA’s Section 542 vouchers and HUD’s Lead Hazard Reduction – receive more than last year’s bills would have provided.

The omnibus will be considered by the House Rules Committee on Tuesday, May 2. The committee is expected to recommend passage by the full House. The House floor vote may happen as early as Wednesday. Then the bill will go to the Senate. Under the Continuing Resolution currently in effect, both houses of Congress must pass the bill and President Trump must sign it by midnight on Friday, May 5.

USDA Funding

The omnibus bill increases funding for both Section 502 direct loans and the Section 523 self-help program. It raises Section 515 to $35 million, higher than the FY16 appropriation and the amount requested in the Obama Administration’s budget, although not as high as the figure in the Senate’s FY17 bill.

Several of the omnibus’s provisions address the need for rental housing preservation and tenant protections. In addition to providing the $1.405 billion in Section 521 Rental Assistance funding requested by the Obama Administration, it also includes $19.4 million for Section 542 vouchers for tenants in properties with prepaid mortgages. It does not extend the voucher program to cover properties where mortgages matured, but it does require USDA to continue helping nonprofits and public housing authorities to preserve rental properties:

The Secretary shall implement provisions to provide incentives to nonprofit organizations and public housing authorities to facilitate the acquisition of Rural Housing Service (RHS) multifamily housing properties by such nonprofit organizations and public housing authorities that commit to keep such properties in the RHS multi-family housing program for a period of time as determined by the Secretary, with such incentives to include, but not be limited to, the following: allow such nonprofit entities and public housing authorities to earn a Return on Investment (ROI) on their own resources to include proceeds from low income housing tax credit syndication, own contributions, grants, and developer loans at favorable rates and terms, invested in a deal; and allow reimbursement of organizational costs associated with owner’s oversight of asset referred to as ‘‘Asset Management Fee’’ (AMF) of up to $7,500 per property (pp. 39-40).

The bill also directs USDA to “study effective means” to preserve properties with maturing mortgages to transfer Section 515 properties exiting the program due to mortgage maturity to qualified nonprofit organizations to preserve the properties in the Rural Housing Service multi-family program” (p. 113). Finally, it appropriates $1 million for technical assistance “to facilitate the acquisition of RHS multi-family housing properties in areas where the Secretary determines a risk of loss of affordable housing” (p. 113).

Finally, an Explanatory Statement accompanying the bill tells USDA to provide “a detailed analysis of the accuracy of the project-based forecasting tool used to estimate rental assistance needs” within 120 days after the bill is enacted (p. 20). [tdborder][/tdborder]

HUD Funding

The omnibus provides full renewal funding for HUD programs, including CDBG, HOME, SHOP, which would have been eliminated by the Trump Administration’s proposal . It also includes $10 million for Section 202 that HUD can use either for new construction – the first such funding since 2011 – or for new Senior Preservation Rental Assistance Contracts (p. 1583 ).