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Status of Section 502 Funds in the FY 2013 Continuing Resolution

On Thursday, October 25, Tom Carew of FAHE notified HAC that some USDA RD State offices are saying that they are out of Section 502 direct funds until the spring.

HAC spoke to USDA RD staff, who provided the explanation below of how 502 direct funds were distributed under the CR for the first six months of FY 2013. Some states asked for and have already used their full six months allocation. But some funds also were held back and are still available for special cases, as outlined below.

Explanation from USDA RD

Under the FY 2013 six month Continuing Resolution (CR), the Single Family Housing Direct 502 Loan Program received $347 Million in FY2013 loan level funding. The final Direct 502 loan annual appropriations have yet to be determined and the balance we receive for the remainder of the year will depend on what program level is approved. It is expected that the funds received from the CR may have to support our programs for the next six months.
Of the $347 Million received for 502 Direct Loans, 25% percent was kept in the National Office Reserve Fund (NORF) and the remaining 75% was distributed to the states, as follows
National Office Reserve Fund equals 25% of the total received.
-$70 Million (20%) is reserved for special loan types (Self Help, RHLP, CDFI, and applications packaged under an approved intermediary agreement) States that have these special loan types are not expected to use their formula allocations to obligate these loans, but rather request funding from the National Office reserve to cover them.
-$17 Million (5%) is reserved for NORF requested priorities (REO, subsequent, Colonias, Underserved, and Hardships loans).
State allocations represent 75% of the total received
-The remaining $260M (75%) was allocated to states. Each state* received a base allocation of $2 Million ($1.2M Low, $800K VL) with remaining funds allocated according to the 1940-L state allocation formula, with 60% of allocated funds to Low and 40% to Very low income categories.
*With the exception of West Pac which received an administrative allocation of $1 Million