For millions of low-income rural Americans, the USDA rural housing programs have provided the only path to affordable homeownership and reliable rental options in our nation’s smallest towns and rural regions. In defense of these communities, the Housing Assistance Council stands firmly opposed to the call for housing program consolidation in the Senate Budget Committee’s Majority Staff Report entitled “Housing Programs: The Need for One Roof.” Released in October 2020, following a hearing earlier in the fall on the same topic, this report takes the admirable goal of program streamlining to a counterproductive extreme.
The Rural Housing Service (RHS) at USDA is the only federal agency that focuses solely on affordable housing in rural America. Nearly 30 percent of all rural households are cost burdened – meaning that they pay more than 30 percent of their monthly income towards either rent or a mortgage. And when looking just at rural renters, the percent of cost burdened households is nearly 50 percent. The RHS programs are laser-focused on these families. They are designed to fill in the gaps in rural housing and rental markets. For example, to be eligible for the USDA single family home loan programs, an applicant must be unable to obtain credit elsewhere at reasonable rates and terms. Applicants are also permitted to purchase a home with little to no down payment, with a reduced interest rate and a term of over 30 years. These unique and critical factors alone indicate that the RHS programs are not duplicative of other programs at the Federal Housing Administration (FHA).
The Budget Committee’s report notes that there is bipartisan agreement that the system of federal housing programs needs improvement. We agree. There is much work to be done to both streamline and fully fund our nation’s affordable housing system. Wholesale consolidation, however, is not the answer for our rural communities – as HAC has long maintained. Shoehorning rural places into urban models and programs has left a legacy of hollowing out in our most remote and underserved communities – and the recommendations in this report would inadvertently continue that trend.