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 Comments on HUD’s CDBG-DR Disaster Recovery Program

Responding to two requests for information from HUD, on February 21 HAC submitted comments on some of the specifically rural concerns involved in using the Community Development Block Grant Disaster Recovery (CDBG-DR) program.

The program does not receive regular annual funding in HUD’s appropriations bills. Instead, Congress provides funds to help with recovery from specific disasters after they occur. As a result, HUD has not been able to write regulations for the program. The department is now developing a “Universal Notice” that would standardize the CDBG-DR allocation and implementation process. HUD asked for input on the program’s rules and waivers and on its allocation formula. HAC combined its responses and submitted one letter.

Key Takeaways

  • To make CDBG-DR most effective in rural and Tribal areas, HUD must build local capacity itself, or require state grantees to do so.
  • To achieve geographic equity in the distribution of CDBG-DR resources, HUD must account for the difficulties of appraising rural properties, as well as for a variety of nontraditional housing and nontraditional forms of ownership that are common in rural places.
  • HUD, FEMA, the U.S. Department of Agriculture, and other agencies involved in the disaster recovery process should develop a single set of standardized forms and templates for applicants to use.

To learn more about HAC’s full recommendations, read our full comment letter. Other comments are posted here and here.

HAC Comments on CDBG-DR

Executive Order Calls for Creating Rural Economic Opportunity

Building on previous equity efforts that began his first day in office, an Executive Order issued by President Biden on February 16 asserts that the federal government will “invest in communities where Federal policies have historically impeded equal opportunity — both rural and urban — in ways that mitigate economic displacement, expand access to capital, preserve housing and neighborhood affordability, root out discrimination in the housing market, and build community wealth.”

The President’s directive also covers health, environmental justice, education, and other topics. It defines equity to include not only racial/ethnic and geographic equity, but also equitable treatment of individuals and communities based on religion, gender, gender identity and sexual preference, disability, and persistent poverty or inequality.

Particularly relevant to the work of HAC and our partners is the EO’s commitment to “build prosperity in rural communities”:

Agencies shall undertake efforts, to the extent consistent with applicable law, to help rural communities identify and access Federal resources in order to create equitable economic opportunity and advance projects that build community wealth, including by providing or supporting technical assistance; incentivizing the creation of good, high-paying union jobs in rural areas; conducting outreach to and soliciting input from rural community leaders; and contributing new resources and support to interagency programs such as the Rural Partners Network.

The EO tells federal agencies to establish Equity Teams, which will support their agencies’ external activities as well as training and diversity efforts with agency staff. A White House Steering Committee on Equity will coordinate overall activities.

 

Policy News from Congress

HAC’s Research Director Testifies to Senate Banking Committee on the State of Housing 2023

HAC was deeply honored by an invitation to testify at the first hearing held in the new 118th Congress by the Senate Banking, Housing, and Urban Affairs Committee. Titled The State of Housing 2023, the session featured Lance George, HAC’s Director of Research and Information, as one of  three witnesses.

A wide range of topics was covered by the witnesses’ testimony and the Senators’ questions. Among the key areas of concern were the gap between housing supply and need, the high cost of both homeownership and rental housing, and what congressional actions could address these challenges. Committee Chair Sherrod Brown (D-Ohio) asked specifically about the loss of rentals financed by USDA’s Section 515 program, a serious concern addressed by HAC research in 2016 and 2022.

Key Takeaways

Lance’s statement made five key points about the state of rural housing in 2023:

  • The pandemic left its mark on rural America and housing markets remain uncertain.
  • Rural mortgage markets are being impacted by interest rates and prices too.
  • Affordability is the greatest housing challenge in rural America, by far.
  • Manufactured housing is an often overlooked but important source of housing – especially in rural America.
  • Race matters across the rural spectrum – especially in housing.

Key policy recommendations, based on HAC’s full set of policy priorities for 2023, included:

  • Increase rural communities’ access to credit and capital and strengthen USDA and HUD homeownership supports.
  • Improve opportunities and financing for preserving aging rental properties and protecting tenants.
  • Authorize the powerful Rural Community Development Initiative and a significant cross-sectoral, flexible capacity building rural investment initiative.

Lance George

Lance George

HAC’s Director of Research & Information

Watch the Hearing


Policy News field

Housing Assistance Council Statement on $54 Million Funding Package for Homelessness in Rural America

Last week, the U.S. Department of Housing and Urban Development (HUD) announced a historic $315 million package of grants to help communities across the country provide both housing and supportive services to those experiencing homelessness. The Housing Assistance Council (HAC) celebrates the inclusion in this package of more than $54 million targeted to rural communities.

“The announcement of $54.4 million in grants to combat rural homelessness is a critical step toward achieving the goal of reducing homelessness by 25% by 2025, set forth in the Administration’s recently released Federal Strategic Plan to Prevent and End Homelessness,” said David Lipsetz, CEO of the Housing Assistance Council. “While the most recent count showed less than a half-percent increase in homelessness overall from 2020 to 2022, predominantly rural Continuums of Care experienced a 6% increase. These targeted grants across over half the country—27 states, which are collectively home to over two-thirds of rural Americans—can help reverse this troubling trend.”

Continuums of Care, the entities that coordinate federal homelessness response efforts, to build their capacity to address the unique homelessness and housing challenges in rural America. In particular, rural communities can apply for capacity-building support—not usually an eligible use of HUD homeless funding, but an important factor in many small towns and rural places. Importantly, this initiative also targets rural communities that have historically not had access to HUD homeless assistance grants.

“The announcement provides a model for bipartisan, evidence-based policymaking in the current political environment,” added Lipsetz. “First, Democrats and Republicans on Congressional Appropriations Committees joined together to authorize HUD to deploy unspent funds for this purpose. Second, while rural communities typically struggle to access competitive federal funding despite demonstrable need because of capacity constraints, HUD not only set aside funding for rural America but specifically sought applications to serve communities that had not previously received Homeless Assistance Grants.”

Policy News from Congress

Housing Assistance Council Statement on FY 2023 Omnibus Bill

This bipartisan agreement maintains funding for USDA’s rural rental housing portfolio and makes a game-changing investment in manufactured housing.

The Housing Assistance Council appreciates Congress continuing to invest in rural communities through the latest omnibus spending bill and hopes that the next Congress will take further steps in 2023 to address the housing crisis in rural America.

The appropriations agreement reached this week makes significant contributions to affordable rural rental housing through the U.S. Department of Agriculture’s housing programs. It also provides $225 million in funding for a new manufactured housing financing and improvement program to be administered by the U.S. Department of Housing and Urban Development.

“This bipartisan agreement maintains funding for USDA’s rural rental housing portfolio and makes a game-changing investment in manufactured housing,” said HAC CEO David Lipsetz. “Rural communities will use this funding to preserve existing affordable housing, build more, and lay the foundation for a better future.”

More than half of all manufactured homes are in rural places. In May, HAC’s Director of Research and Information Lance George testified to Congress that manufactured housing “should continue to be a high-quality, affordable housing option” for rural America.  By creating the first dedicated funding stream targeted to this essential affordable housing stock, this omnibus spending bill takes a critical first step toward achieving just that.

HAC also appreciates the omnibus’s continued support of capacity building programs through USDA and HUD. Congress has long recognized that housing programs only work when there are local partners helping to build, manage, and maintain affordable homes. With a modest investment in the capacity of small towns’ local housing organizations, rural communities can navigate the complexities of federal programs and modern housing finance. As the only national intermediary dedicated solely to rural housing, HAC is gratified to see HUD’s Rural Capacity Building program receive its first increase in program history, from its founding in 2012 at $5 million to $6 million in FY 2023. This will enable HAC and other RCB grantees to provide training and technical assistance to community-based organizations across rural America.

Yet the omnibus leaves too many rural Americans’ housing problems unaddressed. Most of the housing programs at both USDA and HUD enter 2023 with about the same resources they had in 2022, even as mortgage and rent costs are increasing across the country, USDA-financed rental developments are losing their affordability, and homelessness is increasing in rural areas. HAC calls on the 118th Congress to be bolder – to increase support for proven solutions and to innovate. Both the annual appropriations process and the 2023 Farm Bill offer opportunities for action. HAC’s detailed suggestions can be found here and here.

Everyone deserves a safe, healthy, and affordable place to call home. Through the upcoming Farm Bill and the next appropriations cycle, the 118th Congress will have the opportunity to make even more transformative investments that could make that vision a reality.

Policy News from Congress

Final FY23 Spending Bill Boosts Some Rural Housing Programs

Most USDA rural housing programs will see modest boosts or flat funding for fiscal year 2023 in the omnibus spending bill congressional leaders released on December 20, 2022, which is expected to be enacted later this week. Funding for the Section 514 farmworker housing program will drop, however, from $28 million in FY22 to $20 million this year. The Community Facilities grant account is hit even harder, falling from $40 million in FY22 to $25.3 million this year, although the bill does add $50 million for CF grants to disaster areas.

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

The bill’s funding levels support rental preservation efforts, although the measure does not decouple (separate) Section 521 Rental Assistance from USDA Section 514 and 515 mortgages. It substantially increases USDA’s Section 538 rental housing loan guarantees, which are used for preservation as well as new construction, from $230 million in FY22 to $400 million in FY23. This program has been fully utilized in the past two years – an indication of strong demand – and the administration’s budget had requested the additional funds. Section 515 direct rental housing loans receive a smaller increase, from $50 million this year to $70 million next year.

The Section 514 farm labor housing loan program, however, is cut from $28 million to $20 million. Section 516 grants hold steady at $10 million.

The bill also supports USDA’s new initiative to improve homeownership opportunities for Native Americans, allocating $7.5 million for Native CDFIs to make Section 502 direct loans to Native Americans.

Emergency funding is provided for some of the rural housing programs, to be used in places where presidentially declared disasters occurred in FY22. The Rural Housing Assistance Grants account – which includes both Section 504 repair grants for low-income elderly homeowners and also Section 533 Housing Preservation Grants for owner-occupied or rental housing – receives $60 million. Community Facilities programs get $75.3 million, $50 of which is specifically for grants to repair essential community facilities. These CF grants can cover up to 75 percent of the cost of a repair.

The bill mandates smoke detectors in rental housing that is constructed, rehabilitated, or repaired with Section 515 or Section 514/516 funds, or funding from any of several HUD rental programs. The requirement will take effect in December 2024.

The table below shows the dollar amounts provided for USDA rural housing and community facilities programs.

USDA Rural Dev. Prog. (dollars in millions) FY22 Final Approp. FY23 Budget FY23 House Bill FY23 Senate Bill FY23 Final
502 Single Fam. Direct $1,250 $1,500 $1,500 $1,500 $1,250
Nat. Amer. Single Fam. Demo 20.8 12 20.8 7.5
502 Single Family Guar. 30,000 30,000 30,000 30,000 30,000
504 VLI Repair Loans 28 50 28 30 28
504 VLI Repair Grants 32 45 32 32 32
515 Rental Hsg. Direct Lns. 50 200 150 100 70
514 Farm Labor Hsg. Lns. 28 50 30 35 20
516 Farm Labor Hsg. Grts. 10 18 16 14 10
521 Rental Assistance 1,450 1,564 1,494 1,488 1,488
523 Self-Help TA 32 40 33 32 32
533 Hsg. Prsrv. Grants 16 30 16 16 16
538 Rental Hsg. Guar. 250 400 300 400 400
Rental Prsrv. Demo. (MPR) 34 75 40 45 36
542 Rural Hsg. Vouchers 45 38 38 50 48
Rental Prsrv. TA 2 0 2 5 2
Community Facil. Loans 2,800 2,800 2,800 2,800 2,800
Community Facil. Grants 40 52 68.1 100 25.3
Rural Cmnty. Dev’t Init. 6 12 8 7 6
Tribal Colleges CF Grts 10 10 10 10 10
Cong. Directed Spending* 126.9 202.3 325.5
Community Facil. Guarantees 650 500 650 650 650

* Congressionally Directed Spending (earmarks) accounts for a large portion of the Community Facilities Grant spending in both the House and Senate bills, and in the final bill. Specific projects, which were listed in the House and Senate committee reports, are catalogued in the explanatory statement for the final bill.

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

HUD Spending Bill Creates New Manufactured Housing Program and Emphasizes New Construction

Final fiscal year 2023 funding levels for most HUD programs remain steady or receive slight increases in the omnibus spending bill congressional leaders released on December 20, 2022, which is expected to be enacted later this week. The measure also shifts some funds around in small programs that are important to rural areas, and creates new efforts to improve manufactured homes and to increase the supply of affordable housing.

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

Rural Considerations

The explanatory statement that accompanies the bill “urges the Department to enhance its efforts to provide decent, affordable housing and to promote economic development for Americans living in rural areas. When designing programs and making funding decisions, the Department shall take into consideration the unique conditions, challenges, and scale of rural areas.”

Among the bill’s provisions, the Self-Help Homeownership Opportunity Program (SHOP) receives a small increase from $12.5 million in FY22 to $13.5 million in FY23. Similarly, the Rural Capacity Building (RCB) program inches up from $5 million last year to $6 million for the current year. The Veterans Housing Rehabilitation and Modification Pilot Program, however, which is funded in the same account as SHOP and RCB, drops to $1 million from its $4 million in FY22.

The bill doubles the Healthy Homes funding for home modifications and renovations to help low-income elderly homeowners remain in their homes. In FY22 this effort received $15 million, of which $5 million was set aside for rural areas. In FY23 the total is $30 million, with a $10 million rural setaside.

Manufactured Housing

A new Preservation and Reinvestment Initiative for Community Enhancement (PRICE) will receive $225 million to preserve and revitalize manufactured housing. The funds will be distributed over five years as competitive grants to states, local governments, resident-owned manufactured housing communities, cooperatives, nonprofits, community development financial institutions, Tribes, and other entities designated by HUD. Grantees must provide a 50 percent match for the federal funds.

These grants can be used for homes that are not in manufactured housing communities, or in manufactured housing communities that are owned by resident-controlled entities or are legally required to remain affordable for the long term. Eligible uses of funds include infrastructure, planning, resident and community services (including relocation assistance and eviction prevention), resiliency activities (defined as reconstruction, repair, or replacement to protect the health and safety of manufactured housing residents and to address weatherization and energy efficiency needs), and assistance for land and site acquisition. The funds can be used to replace pre-1976 mobile homes, but not to repair them. HUD must prioritize applications that primarily benefit low- or moderately low-income residents and preserve long-term housing affordability for residents of manufactured housing or a manufactured housing community.

Within the $225 million total, $25 million is set aside for a pilot program to provide grants to assist in the redevelopment of manufactured housing communities as affordable replacement housing. Eligible activities include relocation assistance or buy-outs for residents of a manufactured housing community or downpayment assistance for the residents.

New Construction

The bill establishes two new efforts to increase the supply of affordable housing. First, it provides $75 million under the Continuum of Care program for new construction, acquisition, or rehabilitation of new permanent supportive housing.

Second, it creates a new grant program – dubbed a “Yes In My Back Yard” program in the explanatory statement – to incentivize affordable housing production. HUD will receive $85 million for competitive grants to state and local governments, metropolitan planning organizations, and multijurisdictional entities to identify and remove barriers to affordable housing production and preservation.

Smoke Alarms

The bill imposes a new requirement for smoke alarms in units assisted by the public housing, Tenant-Based Rental Assistance, Project-Based Rental Assistance, Section 202, Section 811, and Housing Opportunities for Persons with AIDS programs. The same mandate is added for the USDA Section 515 and 514/516 rental programs. The requirement will take effect in December 2024.

The table below shows the dollar amounts provided for HUD programs in regular appropriations. A different title in the bill provides additional amounts to be used for disaster relief; for HUD, these are $2.66 billion for Tenant-Based Rental Assistance, $969,000 for Project-Based Rental Assistance, and $3 billion for CDBG Disaster Relief.

HUD Program (dollars in millions) FY22 Final Approp. FY23 Admin. Budget FY23 House Bill FY23 Senate Bill FY23 Final
CDBG $3,300* $3,770 $3,300 $3,525 $3,300
HOME 1,500 1,950 1,675 1,725 1,500
Self-Help Homeownshp. (SHOP) 12.5 10 12.5 17 13.5
Veterans Home Rehab 4 4 0 4 1
Tenant-Based Rental Asstnce. 27,370 32,130 31,043 30,182 27,600
      VASH setaside 50 0 50 85 50
      Tribal VASH 5 5 5 5 7.5
Project-Based Rental Asstnce. 13,940 15,000 14,940 14,687 13,938
Public Hsg. Capital Fund 3,388 3,720 3,670 3,405 3,200
Public Hsg. Operating Fund 5,064 5,060 5,063 5,064 5,109
Choice Neighbrhd. Initiative 350 250 450 250 350
Native Amer. Hsg. 1,002 1,000 1,000 1,052 1,020
Homeless Assistance Grants 3,213 3,576 3,604 3,545 3,633
Hsg. Opps. for Persons w/ AIDS 450 455 600 468 499
202 Hsg. for Elderly 1,033 966 1,200 1,033 1,075
811 Hsg. for Disabled 352 288 400 288 360
Fair Housing 85 86 86 85 86
Healthy Homes & Lead Haz. Cntl. 415 400 415 390 410
Housing Counseling 57.5 65.9 70 63 57.5

* A 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”). In FY23, just under $3 billion is added for earmarks. These figures are not included in the table.

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 Comments on Community Investment Focus on Capacity Building and Capital Access

Several federal government agencies recently formed an Interagency Community Investment Committee (ICIC), focused on the operations and execution of federal programs that facilitate the flow of capital and the provision of financial resources into historically underserved communities, including communities of color, rural communities, and Tribal nations. The ICIC requested public input on ways the agencies can promote economic conditions and systems that reduce racial disparities and produce stronger economic outcomes for all communities. According to the request for comment, responses may be used to inform ICIC’s future actions to improve the operations and delivery of federal community investment programs through stronger federal collaboration. The committee is composed of representatives from the Department of the Treasury, Small Business Administration, Department of Commerce, Department of Transportation, Department of Housing and Urban Development, and Department of Agriculture.

Key Takeaways

  1. Support capacity building for local organizations embedded in their communities.
  2. Provide equitable access to capital for rural America.
  3. Address rural needs, particularly in persistent poverty areas, directly.
  4. Accelerate interagency coordination and sharing of best practices.
  5. Improve data and information accuracy and availability.

Read HAC’s comments, submitted on December 19, 2022. Other comments are posted here.

HAC Comments on Community Investment Focus on Capacity Building and Capital Access
HACs Policy Priorities for 2023

HAC’s 2023 Rural Housing Policy Priorities

For over 50 years, the Housing Assistance Council (HAC) has been the voice for the poorest of the poor in the most rural places. Our deeply rooted work in communities across the country informs our research and drives our policy positions. Our independent and non-partisan work with members of Congress, federal agencies, affordable housing and community development organizations, and other stakeholders ensures the most vulnerable rural populations – especially those in high-needs regions like the Mississippi Delta, rural Appalachia, farmworker communities, the Southwest border colonias, and Indian Country – have improved access to safe and affordable housing opportunities.

Rural America is home to about 20 percent of the U.S. population and covers more than 90 percent of the U.S. landmass. Its small towns and rural regions are diverse demographically and economically, and face a wide array of local challenges and opportunities for developing their communities and housing. While each place is unique, HAC has documented several themes. Persistent poverty is a predominantly rural condition. Habitable rural housing is in severely short supply. The adequate housing that does exist is often unaffordable because rural incomes are low and run well below the national median. Rural housing lacks adequate plumbing and kitchen facilities at a rate above the national average. Overcrowding is not uncommon in some rural regions. Decades of stagnant rural house prices have denied owners the wealth and mobility so often associated with buying a home. And racial inequity is endemic as the result of housing policies and banking practices that excluded rural people of color. Complicating these challenges, a lack of reliable rural data obscures rural realities.

In addressing these issues, HAC’s policy priorities include:

  1. Building the capacity of local affordable housing and community development organizations deeply rooted in rural places;
  2. Expanding access to credit and safe, affordable lending in underserved rural communities;
  3. Improving the overall quality, availability and affordability of housing to buy and rent in small towns and rural places; and
  4. Preserving, increasing and tailoring resources for federal affordable housing programs serving rural populations.

We invite you to view our 2023 Policy Priorities and explore the various policy issues facing rural communities.

HAC's Policy Priorities for 2023

 

Policy News field

HAC Submits Comments on Colonia Census Tract Definition

HAC submitted comments in response to the October 5, 2022 Notice of Proposed Rulemaking (NPRM) on the Enterprise Duty to Serve Underserved Markets Amendments published by the Federal Housing Finance Agency (FHFA). HAC has conducted significant research on housing finance, including numerous aspects of Fannie Mae’s and Freddie Mac’s statutory Duty to Serve Underserved Markets. The regulatory change under consideration, in fact, is based on HAC research for Fannie Mae. Thus HAC is well positioned to comment on this proposal.

HAC generally supports FHFA’s proposed definition and use of “colonia census tracts” to target efforts by Fannie Mae and Freddie Mac (the Enterprises) to meet the credit needs of these high-poverty rural areas. As the NPRM explains, the colonia census tract model is based on Colonias Investment Areas, a concept developed by HAC for use by Fannie Mae in meeting its Duty to Serve the colonias. HAC’s research makes clear that using census tracts containing colonias as a basis for identifying and evaluating colonias activities would not only provide clarity, but would also meet the goals of the Duty to Serve statute and regulations.

Key Takeaways

  1. Census tracts are the best available geography for a revised colonia definition, as HAC’s research has demonstrated, and HAC supports FHFA’s proposal to base its definition on tracts.
  2. Focusing activities in the places FHFA identifies as colonias census tracts would meet the goals of the Duty to Serve requirement.
  3. Alternative definitions have proven to be too broad or too difficult to use.
  4. HAC recommends providing greater weight to Duty to Serve activities in colonia census tracts in rural areas than to those in urban or suburban places, because rural tracts have greater needs.
  5. The colonias census tract database should be updated more often than every ten years if interim changes warrant.

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

HAC Final Comments on the Colonias Definition