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House Subcommittee Releases Rural Housing Funding Bill

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On May 18, 2023, the House Agriculture Appropriations Subcommittee approved a fiscal year 2024 funding bill for USDA, proposing to fund many rural housing programs at levels lower than those requested in the administration’s budget, and in some cases lower than the amounts appropriated in FY23 or FY22.

The full House Appropriations Committee scheduled its own mark-up for May 24, then postponed it without setting a new date.

The administration’s budget documents state that its $1.65 billion request for Section 521 would renew all current Rental Assistance contracts, including 27,000 contracts added by the American Rescue Plan Act. The subcommittee’s summary says its $1.607 billion “fully funds existing rental contracts to ensure rural residents will not be displaced,” but does not specifically mention the ARPA units and does not explain the discrepancy between its figure and the budget’s. The administration’s total also includes $6 million for RA in new Section 515 units; that amount is not included in the House bill because it would not provide Section 515 funding for new units.

The House bill would also rescind unspent monies from the American Rescue Plan Act and the Inflation Reduction Act and would prohibit USDA spending on climate-change-related items including energy efficiency.

The Senate has not yet released proposed appropriations bills.

— HAC’s analysis of FY24 appropriations for HUD is available here. As of May 22, 2023, neither the House nor the Senate has proposed HUD funding levels for FY24. —

 

USDA Rural Dev. Prog. (dollars in millions) FY22 Final Approp. FY23 Final Approp. FY24 Admin. Budget FY24 House Subcommittee Bill
502 Single Fam. Direct $1,250 $1,250 $1,500 $900
   Nat. Amer. SF Demo. — 7.5 12 5
502 Single Family Guar. 30,000 30,000 30,000 30,000
504 VLI Repair Loans 28 28 50 25
504 VLI Repair Grants 32 32 40 **
515 Rental Hsg. Direct Lns. 50 70 200 60
514 Farm Labor Hsg. Lns. 28 20 50 ***
516 Farm Labor Hsg. Grts. 10 10 18 ***
521 Rental Assistance 1,450 1,488 1,650 1,607
523 Self-Help TA 32 32 40 25
533 Hsg. Prsrv. Grants 16 16 30 **
538 Rental Hsg. Guar. 250 400 400 400
Rental Prsrv. Demo. (MPR) 34 36 75 34
542 Rural Hsg. Vouchers 45 48 38 48
Rental Prsrv. TA 2 2 0 0
Community Facil. Loans 2,800 2,800 2,800 2,800
Community Facil. Grants 40 25.3* 87 ****
   Tribal Colleges CF Grts 10 10 10 6
    Rural Cmnty. Dev’t Init. 6 6 22.8 5
    Rural Hospital Pilot – – 2 0
Community Facil. Guarantees 650 650 650 650

* An additional $325.5 million in FY23 CF grant funds will be used for “Congressionally Directed Spending” (earmarks). Specific projects are catalogued in the explanatory statement for the final bill.

** The proposed amounts for Section 504 grants and Section 533 grants total $35 million. After the House Appropriations Committee passes the bill and releases a report on it, the report will specify how that total will be divided.

*** The proposed amounts for Section 514 loans and Section 516 grants will be specified in the House committee report.

**** The proposed amount for non-earmarked Community Facilities grants will be specified in the House committee report. The subcommittee’s bill includes $313 million for “Community Project Funding” (earmarks).

White House Budget Requests Increases in Rural Housing Funding

March 13, 2023 — The White House’s detailed budget request for fiscal year 2024 would increase funding for almost all of USDA’s rural housing and community facilities programs.

View a recording or the slides from HAC’s webinar on Rural Housing in the Fiscal Year 2024 White House Budget, which examined the budget’s contents and what to expect over the coming months.

Initiatives Requiring Legislation

The budget proposes legislative changes for Section 502 direct homeownership loans and for multifamily housing preservation.

For the Section 502 direct program, subsidy “recapture” would be eliminated. Recapture requires that, when a low- or very low-income homeowner with a Section 502 loan sells the house or moves, they must repay the subsidy amounts they have received over the life of the loan. The administration estimates that eliminating this penalty for current borrowers would cost USDA $996 million. It also proposes that Section 502 direct loans made in 2024 will not to be subject to recapture.

Like last year’s budget, the FY24 request proposes to provide HUD vouchers rather than USDA vouchers for tenants who lose Section 521 Rental Assistance when the USDA Section 515 or 514 mortgage ends for the property where they live. The HUD budget includes $20 million for these vouchers. USDA also again asks Congress to “decouple” RA from USDA mortgages so that some tenants can continue to receive RA after their properties’ mortgages end.

Funding Requests

The budget’s proposed $1.65 billion for Section 521 Rental Assistance would enable USDA to renew all of its RA contracts, including 27,000 contracts added by the American Rescue Plan Act.

The $200 million funding level for Section 515 is intended to provide enough for some new construction as well as preservation of existing properties. The Section 521 request includes $6 million to provide RA for the new Section 515 units.

The Rural Community Development Initiative, which funds capacity building for local organizations, would receive more than three times as much funding in FY24 as in FY23. The budget requests a leap from $6 million to $22.8 million, without explaining a particular reason for the increase. (RCDI is a setaside within the community facilities grants program but is not limited to recipients of CF funds.)

The budget asks Congress to authorize foreclosure authority for USDA RD’s multifamily office that would be equivalent to HUD’s.

All housing construction or rehabilitation would be required to improve energy or water efficiency, or address climate resilience.

Policy News from Congress

Housing Assistance Council Statement on FY 2023 Omnibus Bill

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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

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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

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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 from the Administration

Biden’s USDA Housing Budget Proposes Increases in Section 502 Mortgages and Rental Preservation

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The Biden administration’s first full budget request, covering the fiscal year that begins on October 1, 2021, would maintain this year’s spending levels on rural housing programs and make available more loans for rural homebuyers. The Section 502 direct loan program, though which USDA makes loans directly to first-time purchasers, would be raised from $1 billion to $1.5 billion. The Section 502 guarantee program, which guarantees mortgages made by banks, would increase from $24 billion to $30 billion.

Fiscal year 2022 funding for most rural housing programs would remain at the same levels as in fiscal year 2021, with modest increases for self-help housing, rental assistance, and rental vouchers. The budget also indicates that the American Jobs Plan – the administration’s infrastructure proposal – would provide an additional $2 billion in rural housing spending. It does not give any details about how that money would be used.

The budget proposes to eliminate some protections for Section 521 Rental Assistance (RA). It would delete a requirement that recaptured RA be reused for rehab, preservation, or RA, and it would eliminate longstanding provisions requiring a 12-month delay before recapturing unused RA from Section 514/516 farmworker housing and mandating that farmworker housing RA be reused in other farmworker housing if possible. Language that allows recaptured RA to be used for “current needs” would be left in place.

Also deleted would be a provision from FY20 and FY21 appropriations that allows owners to request RA renewals for 20-year periods, subject to annual appropriations, which fund RA contracts for one year at a time.

The Multifamily Preservation and Revitalization (MPR) program, the Section 542 voucher program, and both farmworker housing programs would be shifted to new places in the budgetary scheme, an administrative move that would not alter the functioning of any of these programs.

The administration’s budget is the first step in the annual appropriations process. Each house of Congress will now craft its own proposal and differences will be worked out in the months to come.

USDA Rural Dev. Prog.

(dollars in millions)

 FY20 Final Approp. FY21 Final Approp. Amer. Rescue Plan Act FY 22 Admin. Budget
502 Single Fam. Direct $1,000 $1,000 $656.6a  $1,500
502 Single Family Guar. 24,000 24,000 – 30,000
504 VLI Repair Loans 28 28 18.3a 28
504 VLI Repair Grants 30 30 – 30
515 Rental Hsg. Direct Lns. 40 40 – 40
514 Farm Labor Hsg. Lns. 28 28 – 28
516 Farm Labor Hsg. Grts. 10 10 – 10
521 Rental Assistance 1,375 1,410 100 1,450
523 Self-Help TA 31 31 – 32
533 Hsg. Prsrv. Grants 15 15 – 15
538 Rental Hsg. Guar. 230 230 – 230
Rental Prsrv. Demo. (MPR) 28 28 – 32
542 Rural Hsg. Vouchers 32 40 – 45
Rental Prsrv. TA 1 2 – 0
Rural Cmnty. Dev’t Init. 4 6 – 6

a The American Rescue Plan Act of 2021 provides $39 million in budget authority to refinance Section 502 direct loans and Section 504 loans for homeowners impacted by the coronavirus pandemic. USDA expects this funding to generate $656.6 million in Section 502 direct loans and $18.3 million in Section 504 loans.

 

Trump Administration Budget Outline Released

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Updated March 16, 2017, 4:30 p.m. Eastern – Links added at the bottom of this page to some relevant information from other housing organizations and news media.

March 16, 2017, 11:15 a.m. Eastern – The notes below cover the parts of the Trump Administration’s budget outline relevant to rural housing and community development. The budget document, named “America First: A Budget Blueprint to Make America Great Again,” is the first step in a long process. Its contents are proposals, not law. A more detailed budget request from the Administration will be released later, probably in May.

USDA:

  • Total funding reduced by 21% from the FY17 CR level; the CR level is too low for Sec. 521 Rental Assistance and Sec. 542 vouchers
  • No specific mention of RHS or rural housing programs
  • Eliminates Water and wastewater loan and grant program. “Rural communities can be served by private sector financing or other Federal investments in rural water infrastructure, such as the Environmental Protection Agency’s State Revolving Funds.”
  • “Reduces staffing in USDA’s Service Center Agencies to streamline county office operations, reflect reduced Rural Development workload, and encourage private sector conservation planning.”
  • Eliminates RBS “discretionary activities,” “a savings of $95 million from the 2017 annualized CR level.”

HUD:

  • Total funding 13.2% lower than the FY17 CR; the CR level is too low for HUD’s rental assistance programs
  • Eliminates CDBG, HOME, SHOP, Choice Neighborhoods, Section 4 (which funds Enterprise Community Partners, LISC, and Habitat for Humanity)
  • Increases lead funding to $130, an increase of $20 million over FY17 CR
  • Native American housing programs are not mentioned

Agencies and offices eliminated include:

Other programs eliminated include:

  • Weatherization Assistance in Energy Dept.
  • LIHEAP, calling it “a lower-impact program” that “is unable to demonstrate strong performance outcomes.”
  • CSBG, saying it duplicates other federal programs “and is also a limited-impact program.”
  • “Federal support for Amtrak’s long distance train services, which have long been inefficient and incur the vast majority of Amtrak’s operating losses”
  • CDFI Fund grants, $210 million savings from FY17 CR
  • Energy Star
  • “infrastructure assistance to Alaska Native Villages and the Mexico Border” from EPA

Other notes:

  • “Supports substance abuse treatment services for the millions of Americans struggling with substance abuse disorders. The opioid epidemic, which took more than 33,000 lives in calendar year 2015, has a devastating effect on America’s families and communities. In addition to funding Substance Abuse and Mental Health Services Administration substance abuse treatment activities, the Budget also includes a $500 million increase above 2016 enacted levels to expand opioid misuse prevention efforts and to increase access to treatment and recovery services to help Americans who are misusing opioids get the help they need.”
  • “Supports VA programs that provide services to homeless and at-risk veterans and their families to help keep them safe and sheltered.”
  • “All Federal agencies will be responsible for reporting critical performance metrics and showing demonstrable improvement. OMB will also regularly review agency progress in implementing these reforms to ensure there is consistent improvement.”
  • “Provides $1.5 billion, an increase of more than $100 million, for the U.S. Census Bureau to continue preparations for the 2020 Decennial Census. This additional funding prioritizes fundamental investments in information technology and field infrastructure, which would allow the bureau to more effectively administer the 2020 Decennial Census.”

Remember:

  • This is FY18 only; FY17 funding still up in the air; current CR for FY17 expires April 28
  • This is federal “discretionary” funding only; the full budget will cover mandatory spending (e.g., Social Security) and tax proposals, as well as more details on discretionary
  • Congress has to approve funding levels, and is expected to disagree with many of the cuts proposed by the Administration

Some links:

What Does the Administration's 2017 Budget Mean for Rural Housing? (Webinar)

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Materials Posted

Welcome | Power Point Presentation | Webinar Recording

The Administration’s proposed budget for fiscal year 2017 was released on February 9, 2016. What will it mean for rural housing programs? Join the Housing Assistance Council for a brief presentation and Q&A session.

Read more

What Does the 2016 Budget Mean for Rural Housing?

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Webinar Materials Posted

Power Point Presentation | Webinar Recording | HAC News

The Administration’s proposed budget for fiscal year 2016 was released on February 2. What will it mean for rural housing programs? Join the Housing Assistance Council for a brief presentation and Q&A session. Learn about the proposals for USDA and HUD programs. How would proposed changes and funding levels in these programs affect rural communities? How is the budget likely to be received on Capitol Hill? Ask your questions of the experts at HAC.

HAC News: April 3, 2013

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HAC News Formats. pdf

April 3, 2013
Vol. 42, No. 7

• April is Fair Housing Month • Budget release set for April 10 • HUD offers funds for Choice Neighborhoods and fair housing programs • Rules proposed for Rural Housing Stability Assistance Program • USDA limits post-foreclosure collections • Guidance issued on grandfathered rural definition • Metropolitan and micropolitan statistical areas revised • Daily Yonder series considers 50,000 population threshold for defining rural • Tonsager leaving USDA • All HUD offices to close for seven days • Section 538 industry forums scheduled • Sequestration could cut 140,000 Section 8 vouchers • Indian Housing Development Handbook updated • HAC responds to Reuters criticism of Section 502 guarantee program •


April 3, 2013
Vol. 42, No. 7

APRIL IS FAIR HOUSING MONTH. HUD has launched a national media campaign to educate people about the Fair Housing Act. To file a complaint visit HUD’s website or call 1-800-669-9777, or use HUD’s fair housing discrimination app for iPhone and iPad.

BUDGET RELEASE SET FOR APRIL 10. The Obama Administration’s budget for FY14 will be released April 10. HAC will post information and analyses at ruralhome.org as early as possible that day.

HUD OFFERS FUNDS FOR CHOICE NEIGHBORHOODS AND FAIR HOUSING PROGRAMS. PHAs, tribal entities, local governments, nonprofits, and for-profits applying with a public entity are eligible to apply for Choice Neighborhoods Planning grants by May 28; contact HUD staff, choiceneighborhoods@hud.gov. Eligibility for Fair Housing Initiatives Program funds varies by component; apply by June 11. Fair housing enforcement organizations and nonprofits can apply by April 22 for Fair Housing Organization Initiative Continuing Development funds. The contact for all the fair housing programs is Myron P. Newry, HUD, 202-402-7095.

RULES PROPOSED FOR RURAL HOUSING STABILITY ASSISTANCE PROGRAM. RHSP, a new HUD program, was authorized by the 2009 HEARTH Act to help address rural homelessness. The grants are intended for counties, who may designate nonprofits or local governments as applicants. The proposed rule would create a new definition of “rural.” It would also revise HUD’s definition of “chronically homeless.” Comments are due May 28. Contact Ann Marie Oliva, HUD, 202-708-4300.

USDA LIMITS POST-FORECLOSURE COLLECTIONS. After critical coverage by the Wall Street Journal and CBS News, RD has decided to stop collecting its losses from Section 502 direct and guaranteed borrowers who lose their homes to foreclosure. The agency will not drop collection efforts that have already begun, however, and will also pursue borrowers whom it believes have the resources to repay government losses. More details are provided in a press release from HAC and the National Housing Law Project and in a second Wall Street Journal article.

GUIDANCE ISSUED ON GRANDFATHERED RURAL DEFINITION. USDA RD issued Administrative Notice 4711 on March 28, explaining that community facilities, business, and utilities programs must apply 2010 Census data to area eligibility determinations as of March 27, but the final FY13 appropriations bill delays the change for housing programs until September 30 (see HAC News, 3/21/13). The housing programs will base area eligibility on pre-2010 Census determinations, including grandfathering, for applications that are complete by September 30, 2013 or filed in response to NOFAs published by September 30, 2013, provided that funds are obligated by December 31, 2013 or the agency administrator grants a waiver. For more information, contact an RD office.

METROPOLITAN AND MICROPOLITAN STATISTICAL AREAS REVISED. An Office of Management and Budget bulletin lists new area delineations. HAC’s initial analysis will be posted online soon.

DAILY YONDER SERIES CONSIDERS 50,000 POPULATION THRESHOLD FOR DEFINING RURAL. The online rural news site has published three commentaries examining USDA RD’s recent recommendation (see HAC News, 3/6/13) to increase the size of places eligible for its non-housing programs, and welcomes additional submissions.

TONSAGER LEAVING USDA. Under Secretary for Rural Development Dallas Tonsager has resigned. An official statement does not indicate his future plans.

ALL HUD OFFICES TO CLOSE FOR SEVEN DAYS. HUD has posted frequently asked questions on its sequestration information page, explaining that virtually all HUD staff will be furloughed and offices closed on seven days between May and August. The exact dates will be posted online when available.

SECTION 538 INDUSTRY FORUMS SCHEDULED. USDA will hold phone or web meetings about the guaranteed rental program in July and November. To receive announcements by email, contact Monica Cole, RD, 202-720-1251.

SEQUESTRATION COULD CUT 140,000 SECTION 8 VOUCHERS. A new Center on Budget and Policy Priorities paper, “Sequestration Could Deny Rental Assistance to 140,000 Families: Cuts Come at a Time of Rising Need for Housing Assistance and Will Exacerbate Homelessness,” notes that thousands of others could face rent increases. A CBPP blog post summarizing the report is also online.

INDIAN HOUSING DEVELOPMENT HANDBOOK UPDATED. The 2013 version of the National American Indian Housing Coalition’s guide covers planning, funding sources, homeownership strategies, and a summary of relevant Indian law.

HAC RESPONDS TO REUTERS CRITICISM OF SECTION 502 GUARANTEE PROGRAM. HAC’s analysis of Reuters’ article (see HAC News, 3/21/13) is available on HAC’s site and on Shelterforce magazine’s Rooflines blog.

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