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Project 2025 Housing Provisions

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HAC has reviewed, and summarizes below, the housing positions set forth in Mandate for Leadership: The Conservative Promise 2025, which is published by Project 2025 and which describes itself as “the conservative movement’s unified effort to be ready for the next conservative Administration to govern at 12:00 noon, January 20, 2025.” Axios has collected post-election statements by supporters of President-elect Donald Trump stating that this document is their agenda for Trump’s second term.

Across-the-Board Positions

The document’s chapters, written by different individuals, take a variety of approaches, but consistent themes include:

  • Put loyal political appointees in all leadership roles and positions of authority.
  • Eliminate everything related to equity.
  • Eliminate everything related to climate change.

Rural Housing

There is one mention of rural housing, which appears in the document’s HUD chapter as part of a paragraph encouraging Congress to support single-family housing. “Congress can propose tax credits for the renovation or repair of housing stock in rural areas so that more Americans are able to access the American Dream of homeownership.” (HAC’s analysis of Census Bureau data shows that a large proportion of the rural housing stock is neither dilapidated nor rented.)

Although the document has a chapter about USDA, its only mention of USDA’s Rural Housing Service is in the HUD chapter as part of explaining the function of the Government National Mortgage Association. The USDA chapter covers agriculture and food issues only, with nothing about USDA’s Rural Development agencies. It recommends that the department’s role be limited to agriculture and that a limited version of its food and nutrition programs be moved to the Department of Health and Human Services.

Department of Housing and Urban Development

Former HUD Secretary Ben Carson is listed as the author of the chapter on HUD, which asserts the primary importance of single-family homeownership and of local control of zoning and building regulations.

The document recommends several general steps for improving HUD, in addition to the across-the-board positions noted above:

  • “Conduct a thorough review of all subregulatory guidance that has been instituted outside of the Administrative Procedure Act.”
  • Restrict program eligibility “when admission would threaten the protection of the life and health of individuals and fail to encourage upward mobility and economic advancement through household self-sufficiency.” No details are provided on how such determinations would be made.
  • Reduce “the implicit anti-marriage bias in housing assistance programs.”
  • Strengthen work and work-readiness requirements.
  • Continue “modernization initiatives” for information systems and program offices.
  • Provide strong financial controls and financial reporting for HUD.

It also calls for eliminating a number of specific initiatives and approaches:

  • End Housing First policies.
  • End the Biden Administration’s Property Appraisal and Valuation Equity (PAVE) initiatives and reverse any Biden Administration actions that “threaten to undermine the integrity of real estate appraisals.”
  • Repeal the Affirmatively Furthering Fair Housing (AFFH) regulation “and any other uses of special-purpose credit authorities to further equity.”
  • Eliminate the Housing Supply Fund. This fund was proposed in President Biden’s 2023 budget, but was not created. It would have provided $25 billion to states and localities for affordable housing production and $10 billion to reduce affordable housing barriers.
  • Suspend all external research and evaluation grants in HUD’s Office of Policy Development and Research and “end or realign to another office any functions that are not involved in the collection and use of data and survey administration functions and do not facilitate the execution of regulatory impact analysis studies.”

The chapter seems inconsistent regarding tenant-based vouchers. It states that “the turn toward mobility vouchers constitutes an abandonment of America’s public housing stock.” A few paragraphs later, it recommends that “enhanced statutory authorities for local autonomy should extend to the prioritizing of federal rental assistance subsidies that emphasize choice and mobility in housing voucher subsidies over static, site-based subsidies and provide authority for maximal flexibility to direct PHA land sales that involve the existing stock of public housing units.” When public housing is sold, it says, the land can be “put to greater economic use, thereby benefiting entire local economies through greater private investment, productivity and employment opportunities, and increased tax revenue.”

For renters, the document suggests imposing some new requirements or reviving ones previously attempted:

  • Revive a regulation proposed in the previous Trump administration to prohibit noncitizens, including all mixed-status families, from living in all federally assisted housing. This rule was never finalized and was withdrawn in 2021 by the Biden administration.
  • Implement unspecified “maximum term limits” for PBRA and TBRA residents.
  • Move the Real Estate Assessment Center from PIH to the Office of Housing and consider giving HUD the “flexibility for physical inspections through private accreditation.”
  • Make the HUD Secretary a member of the Committee on Foreign Investment in the U.S., “which will gain broader oversight authorities to address foreign threats, particularly from China with oversight of foreign ownership of real estate in both rental and ownership markets of single-family and multifamily housing, with trillions worth of real estate secured across HUD’s portfolio.”

For homebuyers, Project 2025 recommends:

  • Limit FHA mortgages to first-time buyers. FHA is also mentioned in the Treasury Department chapter, which asserts that “the missions of the Federal Housing Administration and the Government National Mortgage Association (‘Ginnie Mae’) must [be] right-sized to serve a defined mission,” without providing more detail.
  • Encourage shorter FHA mortgages by increasing the FHA mortgage insurance premium for all products above 20-year terms. “FHA should encourage wealth-building homeownership opportunities, which can be accomplished best through shorter-duration mortgages.”

The HUD chapter ends with a sweeping recommendation for statutory change: “Congress could consider a wholesale overhaul of HUD that contemplates devolving many HUD functions to states and localities with any remaining federal functions consolidated to other federal agencies (for example, by transferring loan guarantee programs to SBA; moving Indian housing programs to the Department of the Interior; moving rental assistance, mortgage insurance programs, and GNMA to a redesignated Housing and Home Finance Agency). Generally, this reform path could consolidate some programs, eliminate others that have failed to produce meaningful long-run results, and narrow the scope of many programs so that they are closer to what they were when they were created.”

GSEs, Financial Regulators, and CFPB

Project 2025’s Treasury Department chapter calls for ending the conservatorships of Fannie Mae and Freddie Mac and privatizing both enterprises. It suggests the Federal Reserve should be precluded from any future purchases of mortgage-backed securities and should wind down its MBS holdings.

The Treasury Department chapter also suggests that, to improve efficiency and reduce the size of the government, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Federal Reserve’s non-monetary supervisory and regulatory functions should be merged. Financial firms’ activities should not be restricted and regulations should be reduced. The Community Reinvestment Act is not specifically mentioned.

The document’s chapter on the Consumer Financial Protection Bureau proposes eliminating the agency.

Labor Department

The author of this chapter recommends that, because “the low cost of H-2A workers undercuts American workers in agricultural employment,” the H-2A farmworker visa program should be capped at the current number of annual visas and then phased out over 10 to 20 years. This approach, the document states, can “produc[e] the necessary incentives for the industry to invest in raising productivity, including through capital investment in agricultural equipment, and increasing employment for Americans in the agricultural sector.”

Presenting an “alternative view,” the writer notes that “some conservatives … credibly argue that, absent the H-2A program, many farmers would have to drastically increase wages, raising the price of food for all Americans, and that even such wage increases may not be sufficient to attract enough temporary American workers to complete the necessary farm tasks to get food products to market since those jobs are, by their nature, seasonal.”

This author also proposes that federal contracts should require a high proportion of contractor employees be U.S. citizens and that employers should be permitted to give hiring preference to citizens over work-authorized noncitizens. An “alternative view” holds that the government must limit its spending, so decisions about citizenship requirements for government contractors should be based on cost rather than “arbitrary quotas.”

Federal Emergency Management Agency

Project 2025 calls for reducing FEMA’s responsibilities and its expenditures.

  • Wind down and privatize the National Flood Insurance Program.
  • End FEMA grants for disaster preparedness.
  • Require states and localities to bear most of the cost of disaster response, except for the largest disasters.
  • Require states, localities, and private organizations getting FEMA grants to certify that they comply with federal immigration laws. Require state and local governments to certify that all their agencies (not just disaster response agencies) use E-Verify, and that they will share all information with federal law enforcement and immigration enforcement, including department of motor vehicles databases.

Updated March 20 – What would a federal government shutdown mean for rural housing?

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Updated, March 20, 2024 – Some parts of the government may shut down briefly this weekend while Congress finishes the process of passing a final funding measure, but the HUD and USDA housing programs will not be affected. Their final appropriations for fiscal year 2024 (October 1, 2023-September 30, 2024) were set earlier this month. HAC has posted more details about USDA’s funding levels here and about HUD’s here.

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The information provided below is still accurate, but is no longer relevant for fiscal year 2024.

Update, October 2, 2023 – A last-minute agreement on a continuing resolution keeps the government running through November 17. It includes a provision allowing USDA to renew Section 521 Rental Assistance contracts as they expire, even if that requires a higher proportion of annual funding than the prorated amount for the first 48 days of the fiscal year.

The next steps towards funding for the entire fiscal year are not yet clear. The House and Senate have proposed different FY24 funding levels for USDA and HUD, and the House voted on but did not pass its USDA appropriations bill on September 28. Follow HAC’s reporting on appropriations in the HAC News (subscribe here) and on our web pages for USDA and HUD funding.

Update, September 29, 2023 – Congress has not made effective progress towards avoiding a shutdown on October 1. USDA has posted updated shutdown contingency plans, including one for Rural Development. The RD plan seems to be essentially the same as the 2021 version HAC originally summarized here. Since the updated plan indicates that USDA will be able to spend Rental Assistance funds so long as it has them, this post has been updated to remove questions about the lack of an advance appropriation for Rental Assistance.

The federal government, or parts of it, close when funding (appropriations) lapses. None of the fiscal year 2024 appropriations bills have been enacted yet, and ongoing differences between factions on Capitol Hill make temporary funding unlikely. A shutdown could begin on October 1, 2023, when fiscal year 2023 ends. If a continuing resolution (CR), or a series of them, keeps the government operating beyond October 1, a shutdown could occur whenever the final CR ends. Federal agencies have prepared shutdown plans.

A brief federal government shutdown probably would not impact most people who receive housing assistance but, at some point after the first few days, the housing effects would begin to be noticeable. In fiscal year 2019, a record 35-day shutdown from December 22, 2018 to January 25, 2019 led some owners of USDA-financed rental properties, unaware that the agency had enough Section 521 Rental Assistance (RA) funding to last through January, to threaten to evict tenants who could not pay full rent on their own. Fortunately, Congress reached a funding agreement before any RA renewals were missed that February.

As HAC considers what a shutdown will mean, some important questions remain open and are included in the analysis below. HAC and other national rural housing organizations have reached out to USDA RD’s multifamily and political leadership with these questions and will update this information when we receive a response.

KEY TAKEAWAYS

  • A brief federal government shutdown probably would not impact most people who receive housing assistance but, at some point after the first few days, the housing effects would begin to be noticeable.
  • Section 521 Rental Assistance contracts would continue to be renewed during a shutdown “if funding is available,” according to USDA Rural Development’s shutdown plan, dated September 2023.
  • If the agency has used up all its RA funds, “additional servicing options” could be provided to rental properties. When the government closed in December 2018 and January 2019, for example, USDA considered permitting owners to use project reserves to cover costs, but the shutdown ended before a final decision was made.
  • No new rural housing loans, grants, or loan guarantees would be committed during a shutdown.
  • HUD’s monthly subsidy programs – including public housing operating subsidies, housing choice vouchers, and multifamily assistance contracts – would operate only while funding remained available, according to HUD’s August 2023 contingency plan. If they ran out of money during a shutdown, they would cease to operate.

WHAT SHUTS DOWN

USDA Rural Development

Rural Development’s contingency plan, dated September 2023, indicates that State Directors, their staff, and some employees in the Washington, DC national office and the Customer Servicing Center in St. Louis would continue working during a shutdown.

Rental Assistance

RD’s plan says that Section 521 Rental Assistance would continue “if funding is available.”

The amount needed for RA can vary considerably from month to month. The RA payments each month are for the RA contracts that expired during that month, and each payment obligates a full year of RA funding. For example, the RA contracts that expired during August 2023 and were renewed in late August or early September will not be impacted again until they expire in August 2024. How much RA funding does USDA have on hand? How long will that amount last?

The contingency plan provides that, if the agency has used up all its RA funds, “additional servicing options” could be provided to rental properties. In 2019, for example, USDA was considering permitting owners to use project reserves to cover costs. The shutdown ended before the agency completely ran out of RA money, so they did not have to decide whether to allow the use of reserves. Has USDA RD planned for such a possibility this year?

Has RD developed plans for communicating with property owners/managers and with tenants if a shutdown occurs and while it continues?

Loans, grants, and servicing

According to USDA’s contingency plan, no new loans or grants would be committed during a shutdown. No new loan guarantees would be issued under any of the housing programs or the community facilities program. For Section 502 guaranteed loans only, lenders and borrowers could choose to proceed with closing if USDA had already issued a valid conditional commitment. The lender would be assuming the risk until the shutdown ended and a guarantee was issued.

RD activities that are considered necessary to preserve the government’s property would continue during a shutdown, and loans and escrow accounts are considered to be government property. Therefore RD would keep processing nightly updates for each RD financial system, making insurance and tax payments from borrowers’ escrow accounts, and “reconciling and submitting for initial processing” collection activity including amortized payments and payoff activity. Some foreclosure sales would go forward. Servicing of existing guaranteed loans would continue, including processing loss claims.

HUD

HUD’s plan is dated August 30, 2023. It explains that, since 2019, appropriations language has allowed HUD’s salaries and expenses funding to be carried over into the next fiscal year, with wording similar to that used for the Rental Assistance advance appropriations. Thus, if FY24 begins without an appropriation, HUD may have some FY23 funds remaining for staff to continue working at full force, at least temporarily. The department’s senior leadership would decide how much of that funding to use and for what functions.

Programs operating with HUD funding that was obligated before a shutdown would continue to operate. Much of the Federal Housing Administration’s and Ginnie Mae’s work would continue during a shutdown. Monthly subsidy programs, however – including public housing operating subsidies, housing choice vouchers, and multifamily assistance contracts – would operate only while funding remained available. If they ran out of money during a shutdown, they would cease to operate.

Treasury

The Treasury Department’s plan, dated December 2022, states that the CDFI Fund’s programs would not operate during a shutdown, without providing any further details.

WHO KEEPS WORKING

Generally, during a shutdown, federal staff in the affected agencies do not work unless their functions are considered essential. Furloughed employees are also not allowed to do their jobs voluntarily while the government is closed. In the past, Congress and the President have usually agreed to pay furloughed employees retroactively after a shutdown ends, but they are not required to do so.

Presidential appointees (i.e., agency officials who were confirmed by the Senate) are not furloughed. They are not paid, however, unless funds for their salaries are appropriated after the shutdown ends. “Schedule C” employees, also known as political appointees (these jobs do not require Senate confirmation), are subject to the same rules as civil service employees to determine whether their roles are essential during a shutdown.

WHAT A SHUTDOWN MEANS FOR GOVERNMENT CONTRACTS

An Office of Management and Budget document explains that during a shutdown a federal contractor can proceed with work that is not impacted by the lapse in funding. For example, if an agency has already obligated funds representing the entire price under a contract or task order before the funding lapse began, the contractor can conduct the work. At the agency, however, routine operational and administrative activities relating to contract or grant administration cannot continue.

WHAT HAPPENED IN FY19

Fiscal year 2019 began on October 1, 2018 with parts of the federal government, including USDA and HUD, open under continuing resolutions. After a final CR expired, they did close down on December 22. The government reopened on January 25, 2019, under another CR that expired on February 15. A final consolidated appropriations act was signed into law by President Trump on February 15.

USDA Rural Development

The first HAC News issue after the shutdown began, published on January 15, 2019, reported that limited functions were continuing at USDA’s national office in Washington, DC and the Customer Service Center in St. Louis. Loan closings were not taking place and applications were not being processed.

Rental Assistance

USDA RD was able to renew Section 521 Rental Assistance contracts that expired in December and January. If the shutdown had continued, however, the agency would not have had enough money to renew the approximately 700 RA contracts that expired in February and 1,000 in March.

By January 25, 2019, when a deal was reached for a three-week CR, the HAC News reported that USDA was considering short-term measures, such as allowing owners to use project reserves to cover costs, but had not yet finalized any plans or notified property owners/managers. The need for providing information directly from USDA had become clear when managers of USDA-financed properties in Arkansas, Louisiana, Missouri, and Mississippi sent notices to tenants telling them their RA was ending in January and they would be responsible for paying their full rent, then backpedaled when informed by USDA the RA would be paid.

After the shutdown ended, the February 11, 2019 HAC News quoted a notice USDA sent to owners and managers of USDA-financed properties with Section 521 Rental Assistance: “We are pleased to inform you that Rental Assistance for Section 514/515 properties has been obligated through April. … We understand that the most recent lapse in appropriations created anxiety and uncertainty regarding the status of your contract obligations. We are hopeful that this communique and the fact that all contracts are obligated through April will provide you reassurance and operational predictability in your management of these critical low-income resources throughout rural America. Thank you for your partnership in delivering the Rural Housing Service affordable housing mission.”

A January 2019 memo from the National Housing Law Project explained the rights of federally assisted tenants during the government shutdown. NHLP is preparing an updated memo for a possible October 2023 shutdown.

Homeownership Programs

On February 1, 2019, after the shutdown ended, USDA’s single-family programs office announced it would issue new Certificates of Eligibility to all Section 502 direct applicants who had valid COEs on December 21 before the government shut down. The agency did not have enough money to obligate additional Section 502 direct loans until it received funding beyond February 15, however.

Section 504 repair loans and grants were available on February 1. USDA planned to prioritize applicants with immediate health and safety hazards.

Other Impacts

There were additional housing-related impacts from the FY19 shutdown, and only a few are summarized below.

Some HUD Project-Based Rental Assistance contracts expired early in the shutdown, as reported in the January 15, 2019 HAC News. About 21,500 households with average incomes under $13,000 per year were impacted by the expiration of 650 PBRA contracts that ended in December. More were expiring in January and February and HUD would need to determine whether it had funds available to renew them. Property owners could use their reserves, if available, to cover shortfalls. Public housing capital funding was unavailable, and operating funds would not be able to carry public housing authorities beyond February.

The shutdown’s effect in Indian Country was “substantial and unique,” the Center for Indian Country Development at the Minneapolis Federal Reserve reported, although calculating a dollar amount was not possible. Because of the unique relationship between the U.S. and Tribes, Tribal services are often closely tied to federal funding. Government employment is disproportionately high in Indian Country, Tribal staff such as those who plow reservation roads were furloughed, and Tribal education funds were in danger.

Disaster spending, particularly funding for Puerto Rico’s recovery from Hurricane Maria in 2017, was also delayed by the 2019 shutdown. Congress had appropriated $20 billion in CDBG-DR funds for Puerto Rico, but only $1.5 billion of that money was approved before the shutdown, and HUD did not disburse it during the shutdown. HUD approval of disaster spending plans or amendments from California, Florida, Georgia, Missouri and the U.S. Virgin Islands was also put on hold.

 

HAC in the News

Groups Urge HUD and USDA to Finalize Efficiency Requirements for U.S.-Backed Homes

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ACEEE, HAC, and Sierra Club logos

A federal proposal to ensure new homes supported by U.S.-backed mortgages and federal housing programs meet updated energy efficiency criteria garnered widespread support from stakeholders today. Groups advocating for affordable housing, energy efficiency, and climate mitigation united in urging the administration to finalize the action promptly.

The groups were joined by more than 6,000 individuals across the country who supported the proposal in public comments gathered by Sierra Club and submitted to regulators today.

The U.S. Department of Housing and Urban Development (HUD) and Department of Agriculture (USDA) proposed updating their efficiency requirements in May by issuing a preliminary determination. If the action is finalized, future residents of the homes at issue compared to homes under the current criteria will save an estimated $14,500 for single-family homes and $6,000 per multifamily unit overall, net of costs, over the lifetime of the homes thanks to lower energy bills, HUD and USDA calculated. It would avert 2 million metric tons of carbon dioxide emissions for each year of new homes, the agencies said.

Jonathan Harwitz, director of public policy at the Housing Assistance Council, said: “Keeping housing affordable includes making utility costs affordable. We encourage HUD and USDA to move forward with this determination, and also to find ways to help cover upfront costs and to educate those who finance and build affordable housing.”

Lowell Ungar, federal policy director at the American Council for an Energy-Efficient Economy, said: “The longer we build brand-new inefficient homes, the more needless energy costs and climate pollution we’ll see for decades ahead. Just by meeting their legal mandate, the agencies will help ensure tens of thousands of new homes have lower energy bills and less risk of spiking costs. The analysis is clear; now they need to act promptly to get the job done.”

Jessica Tritsch, building electrification campaign director at the Sierra Club, said: “Too often renters and folks in low-income housing are left behind from programs that offer energy efficient housing and lower utility bills. This move by HUD will help ensure better access to climate-friendly appliances and healthier, more affordable homes. Adopting these new energy efficiency building codes is long overdue. We are committed to holding HUD, and other federal and state agencies, accountable to help low-income homeowners and renters access clean, safe, energy efficient housing.”

Background:

In bipartisan laws in 1992 and 2007, Congress directed HUD and USDA to periodically strengthen efficiency criteria for new homes purchased with federally backed loans such as Federal Housing Administration (FHA) and USDA mortgages, along with new homes with funding from other HUD programs, like the HOME Investment Partnerships grants for affordable housing. These homes—about 200,000 new ones each year—are primarily for low- and moderate-income homeowners and renters.

These criteria follow a model building energy code known as the International Energy Conservation Code (IECC) for single family houses and smaller multifamily buildings, and ASHRAE Standard 90.1 for high-rise multifamily buildings. The law requires HUD and USDA to update the criteria when the codes are updated every three years as long as the agencies determine that doing so would not negatively affect the availability or affordability of covered housing. But the regulators have not updated the criteria since 2015.

The agencies finally issued a preliminary determination for public comment in May for the 2021 IECC and Standard 90.1-2019 (the current requirements are the 2009 IECC and 90.1-2007). A provision in the omnibus spending bill enacted at the end of 2022 also requires the Department of Veterans Affairs to update its loan requirements based on the HUD-USDA criteria.

Houses and multifamily buildings meeting these criteria generally have more insulation in the walls and roofs, better air sealing and windows, and more energy-efficient systems, including better-sealed ducts. The homes waste less heat and allow more efficient heating and cooling with smaller HVAC systems.

Today is the final day for stakeholders to comment on the preliminary determination. When the agencies issue a final determination, they will implement the updated efficiency criteria in each covered program over a few months.

Media contacts:

ACEEE – Ben Somberg, 202-658-8129, bsomberg@aceee.org

HAC – Dan Stern, 202-516-6882, dan@ruralhome.org

Sierra Club – Shannon Van Hoesen, 202-604-2464, shannon.vanhoesen@sierraclub.org

The American Council for an Energy-Efficient Economy (ACEEE), a nonprofit research organization, develops policies to reduce energy waste and combat climate change. Its independent analysis advances investments, programs, and behaviors that use energy more effectively and help build an equitable clean energy future.

The Housing Assistance Council (HAC) is a national nonprofit that supports affordable housing efforts throughout rural America. Since 1971, HAC has provided below-market financing for affordable housing and community development, technical assistance and training, research and information, and policy formulation to enable solutions for rural communities.

The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person’s right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action.

Debt ceiling compromise limits spending, rescinds some HUD and USDA housing funds

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The Fiscal Responsibility Act – the recently enacted compromise that suspends the debt ceiling until January 1, 2025 – makes fewer cuts than the Limit, Save, Grow Act passed by the House in April, but it almost certainly will limit federal spending on housing aid for the next two fiscal years. In addition to the well-publicized work requirements for SNAP and TANF recipients, reallocation of IRS funding, and revised environmental reviews, the measure includes a variety of other provisions, several of which impact rural housing.

  • It rescinds any unspent funds from the $39 million for Section 502 direct loans and 504 loans that was provided in the American Rescue Plan Act. (The June 8, 2023 HAC News reported incorrectly that $2 million in rental preservation technical assistance funds were also rescinded. The compromise did not rescind any preservation TA monies.)
  • It rescinds unspent monies appropriated by pandemic relief laws for the Emergency Rental Assistance and Homeowner Assistance Fund programs, and funds that were appropriated in the CARES Act but have not yet been spent by HUD for Tenant-Based Rental Assistance, Project-Based Rental Assistance, Native American housing, Section 811, and Section 202.
  • It caps overall FY24 funding for discretionary programs at around FY23 levels. Despite this limit on total spending, specific programs may receive amounts that are higher or lower than their FY23 levels. As it does every year, the appropriations process in Congress will make key decisions for individual programs.
  • Overall discretionary spending can increase only 1% from FY24 to FY25. The annual appropriations bills will set amounts for individual programs.
  • If appropriations do exceed the limits in FY24 or FY25, a sequester would make across-the-board cuts to discretionary programs.
  • Discretionary spending increases are also capped at 1% for fiscal years 2026-2029, but Congress can waive these caps if it chooses. It has no such option for FY24 and FY25.
  • If Congress uses a continuing resolution to fund any part of the government beyond January 1 of FY24 or FY25, funding for that year would be reduced. If a CR were still in effect on April 30, the funding cut would be applied to the entire year.
HAC in the News

HAC receives $6,325,000 from HUD to invest in rural communities and rural housing

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Contact: Dan Stern, dan@ruralhome.org
(202) 516-6882

Washington, DC, May 15, 2023 – The Housing Assistance Council (HAC) has been awarded a total of $6,325,000 funding from the U.S. Department of Housing and Urban Development (HUD) to invest in the capacity of rural communities and help rural families achieve homeownership. HAC was awarded $4,000,000 from the Self-Help Homeownership Opportunity Program (SHOP) and $2,325,000 in Rural Capacity Building (RCB) funding. The funds represent a portion of HUD’s $22 million investment into rural communities through the SHOP and RCB programs.

The funding was announced in conjunction with an event in Russellville, AR at which HUD Deputy Secretary Adrianne Todman toured several homes that are being built using funds from HAC’s SHOP program with local partner Universal Housing Development Corporation.

HUD’s official press release announcing the award included the following statement from Secretary Marcia L. Fudge “Today, we are investing in homeownership and expanding access to affordable housing to rural communities. The SHOP program provides a unique pathway for first-time homeowners and underserved groups to buy a home. At HUD, we care about rural America and these capacity building grants are further evidence of our commitment.”

SHOP funding will allow rural homebuyers to invest their sweat equity and hard work towards the construction of their own homes in rural communities. HAC will use its RCB funding to assist a group of eligible rural organizations to undertake affordable housing and community development activities in disadvantaged and other target communities around the country.

“HAC’s decades long partnership with HUD has provided affordable homes for people and increased capacity for organizations in rural communities across the United States,” said David Lipsetz, President & CEO of the Housing Assistance Council. “These awards will improve the lives of countless rural people and highlight HUD’s commitment to rural America!”

About the SHOP Program

The Self-Help Homeownership Opportunity Program (SHOP) awards grant funds to eligible national and regional nonprofit organizations and consortia. Funds must be used for eligible expenses to develop decent, safe, and sanitary non-luxury housing for low-income persons and families who otherwise would not become homeowners. Examples are for purchasing home sites and developing or improving the infrastructure needed to set the stage for sweat equity and volunteer-based homeownership programs for low-income persons and families. Homebuyers must be willing to contribute significant amounts of their own sweat equity toward the construction or rehabilitation of their homes.

About the RCB Program

The Rural Capacity Building (RCB) program enhances the capacity and ability of rural housing development organizations, Community Development Corporations (CDCs), Community Housing Development Organizations (CHDOs), local governments, and Indian tribes to carry out affordable housing and community development activities in rural areas for the benefit of low- and moderate-income families and persons. The Rural Capacity Building program achieves this by funding national organizations with expertise in rural housing and rural community development who work directly to build the capacity of eligible beneficiaries.

About the Housing Assistance Council

The Housing Assistance Council (HAC) is a national nonprofit that supports affordable housing efforts throughout rural America. Since 1971, HAC has provided below-market financing for affordable housing and community development, technical assistance and training, research and information, and policy formulation to enable solutions for rural communities.

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Policy News town

HAC’s Comments on Affirmatively Furthering Fair Housing

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In February 2023, the U.S. Department of Housing and Urban Development (HUD) requested public comments on a proposed regulation that is intended to ensure that HUD and entities receiving funding from HUD will “Affirmatively Further Fair Housing” (AFFH). This rule would implement the Fair Housing Act’s requirement for HUD and its awardees to proactively take meaningful actions to overcome patterns of segregation, promote fair housing choice, eliminate disparities in housing-related opportunities, and foster inclusive communities that are free from discrimination. The 2023 proposed rule is based on a 2015 rule that was never fully implemented.

HAC supports many aspects of HUD’s proposal. HAC also supports suggestions for improvements made in comment letters prepared by the National Community Reinvestment Coalition and National Housing Law Project, and HAC — along with many other organizations — signed those letters. In addition, to emphasize some points that are particularly relevant to AFFH efforts in rural America, HAC submitted its own comment letter.

In its letter, HAC makes three primary points regarding state and local governments’ development of AFFH Equity Plans:

  • Community engagement must be offered in many different ways.
  • Analyses must be conducted in smaller geographic areas.
  • Data on USDA-supported housing must be specifically included.

Read HAC’s full comments here.

HUD AFFH 2023 Comment Letter
Policy News town

HAC’s Comments on HUD’s 2023 Learning Agenda

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HAC submitted comments to the Department of Housing and Urban Development’s (HUD) Request for Information on their Fiscal Year 2023 Learning Agenda. There is a lack of rural research on a variety of housing topics, and HUD can play a role in investing in high-quality research and data to better define rural needs.

HAC’s comments suggested these areas and topics as ripe for HUD research investment:

  • Farmworker housing conditions
  • Manufactured housing issues
  • The fate of housing units leaving the federally subsidized housing stock
  • The impact of rural Area Median Incomes on HUD program access
  • Rural data in the American Housing Survey

Read HAC’s full comments here.

HUD Learning Agenda 2023 Comment Letter
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.

 

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50 Years for Rural America

Over 50 years HAC has worked in every U.S. state and the territories. Learn more about what our work means for rural communities.

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Housing Assistance Council   |  1828 L Street. N.W., Suite 505, Washington, D.C. 20036
(202) 842-8600  |  (202) 347-3441  |  hac@ruralhome.org

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