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Policy News from the Administration

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 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.

— HAC’s analysis of the HUD portion of the budget is available 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.”

USDA Rural Dev. Prog.

(dollars in millions)

FY21 Final Approp. Amer. Rescue Plan Act FY22 Admin. Budget FY22 Final Approp. FY23 Budget
502 Single Fam. Direct $1,000 $656.6 $1,500 $1,250 $1,500
502 Single Family Guar. 24,000 30,000 30,000 30,000
504 VLI Repair Loans 28 18.3 28 28 50
504 VLI Repair Grants 30 30 32 45
515 Rental Hsg. Direct Lns. 40 40 50 200
514 Farm Labor Hsg. Lns. 28 28 28 50
516 Farm Labor Hsg. Grts. 10 10 10 18
521 Rental Assistance 1,410 100 1,450 1,450 1,564
523 Self-Help TA 31 32 32 40
533 Hsg. Prsrv. Grants 15 15 16 30
538 Rental Hsg. Guar. 230 230 250 400
Rental Prsrv. Demo. (MPR) 28 32 34 75
542 Rural Hsg. Vouchers 40 45 45 38
Rental Prsrv. TA 2 0 2 0
Rural Cmnty. Dev’t Init. 6 6 6 12
Community Facil. Loans 2,800 2,800 2,800 2,800
Community Facil. Grants 32 32 40 52
      Tribal Colleges CF Grts 5 10 10 10
Community Facil. Guarantees 500 500 650 500

 

 

Policy News from the Administration

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.

— HAC’s analysis of USDA’s rural housing budget is available 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.

 

HUD Program

(dollars in millions)

FY21 Final Approp. FY22 Admin. Budget FY22 Final Approp. FY23 Admin. Budget
CDBG $3,475 $3,770 $4,841* $3,770
HOME 1,350 1,850 1,500 1,950
Self-Help Homeownshp. (SHOP) 10 10 12.5 10
Veterans Home Rehab 4 4 4 4
Tenant-Based Rental Asstnce. 25,778 30,442 27,370 32,130
    VASH setaside 40 0 50 0
    Tribal VASH 5 5 5 5
Project-Based Rental Asstnce. 13,465 14,060 13,940 15,000
Public Hsg. Capital Fund 2,942 3,678 3,388 3,720
Public Hsg. Operating Fund 4,864 4,917 5,064 5,060
Choice Neighbrhd. Initiative 200 250 350 250
Native Amer. Hsg. 825 1,000 1,002 1,000
Homeless Assistance Grants 3,000 3,500 3,213 3,576
Hsg. Opps. for Persons w/ AIDS 430 450 450 455
202 Hsg. for Elderly 855 928 1,033 966
811 Hsg. for Disabled 227 272 352 287
Fair Housing 72.6 85 85 86
Healthy Homes & Lead Haz. Cntl. 360 400 415 400
Housing Counseling 57.5 85.9 57.5 65.9

* The substantial increase in CDBG funding 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”).

Policy News from the Administration

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

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 $656.6 $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

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)

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?

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

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.