The House Appropriations Committee’s Agriculture Subcommittee approved its FY16 agriculture appropriations bill on June 18, 2015. The bill would keep almost all USDA rural housing programs at FY15 appropriations levels, rejecting most of the Administration’s requested increases and decreases.

The House Appropriations Committee’s Agriculture Subcommittee approved its FY16 agriculture appropriations bill on June 18, 2015. The bill would keep almost all USDA rural housing programs at FY15 appropriations levels, rejecting most of the Administration’s requested increases and decreases.

The Obama Administration’s FY16 budget request sought to cut the Section 523 self-help homeownership program from $27.5 million in 2015 to $10 million in 2016. The House bill, however, keeps funding for Section 523 at $27.5 million. This program enables local housing organizations to help rural residents build their own homes.

The Obama budget also proposes to add funds in the Section 515 rental loan program and the Section 521 Rental Assistance program. These monies would be used to construct new rental properties and preserve existing ones in persistently poor places. The committee bill rejects these additions. It increases Rental Assistance funds slightly to $1.167 billion, the amount the Administration said will be needed to keep up with inflation.

The House bill also omits some Administration changes to Rental Assistance. The budget would have charged tenants a minimum of $50 per month rent, allowed RA contracts to be shorter than one year, and given USDA discretion to decide which RA contracts to renew. The only change included in the bill, however, is one requested in the FY15 budget and included in the final FY15 appropriation: Rental Assistance contracts would not be renewed if they use up all their funds before the end of their 12-month contract periods. This provision affects a few RA contracts each year in properties that have relatively high monthly costs, usually because they have taken new loans in order to make repairs or improvements. HAC understands that USDA is also developing administrative processes to help provide the correct amount for each RA contract so that this problem will occur even less often.

The Administration budget also recommended more than doubling the amount for Section 542 vouchers and offering them to tenants when Section 515 mortgages mature and are paid off. Currently vouchers are available only when property mortgages are paid early. According to the budget, “total funding of $15 million will support 3,968 vouchers.” Rural housing organizations, however, have estimated that $25.7 million would be needed. The House bill includes only $7 million, the amount appropriated in FY15. It does not provide for expansion of the voucher program to tenants in maturing mortgage properties.[tdborder][/tdborder]

Updated June 24, 2015