White House Budget Requests Increases in Rural Housing Funding
The White House’s detailed budget request for fiscal year 2024 would increase funding for almost all of USDA’s rural housing and community facilities programs. (The official details released on March 13 confirm the information provided in USDA’s budget summary, which was posted on its website on March 9.) The figures are presented in the table below.
— HAC’s analysis of FY24 appropriations for HUD is available here. —
HAC will present a webinar on Rural Housing in the Fiscal Year 2024 White House Budget on Wednesday, March 15. Register here and join HAC’s policy staff to learn about rural housing and community facilities highlights from both the USDA and HUD sections of the budget.
Initiatives Requiring Legislation
The budget proposes legislative changes for Section 502 direct homeownership loans and for multifamily housing preservation.
For the Section 502 direct program, subsidy “recapture” would be eliminated. Recapture requires that, when a low- or very low-income homeowner with a Section 502 loan sells the house or moves, they must repay the subsidy amounts they have received over the life of the loan. The administration estimates that eliminating this penalty for current borrowers would cost USDA $996 million. It also proposes that Section 502 direct loans made in 2024 will not to be subject to recapture.
Like last year’s budget, the FY24 request proposes to provide HUD vouchers rather than USDA vouchers for tenants who lose Section 521 Rental Assistance when the USDA Section 515 or 514 mortgage ends for the property where they live. The HUD budget includes $20 million for these vouchers. USDA also again asks Congress to “decouple” RA from USDA mortgages so that some tenants can continue to receive RA after their properties’ mortgages end.
The budget’s proposed $1.65 billion for Section 521 Rental Assistance would enable USDA to renew all of its RA contracts, including 27,000 contracts added by the American Recovery and Reinvestment Act.
The $200 million funding level for Section 515 is intended to provide enough for some new construction as well as preservation of existing properties. The Section 521 request includes $6 million to provide RA for the new Section 515 units.
The Rural Community Development Initiative, which funds capacity building for local organizations, would receive more than three times as much funding in FY24 as in FY23. The budget requests a leap from $6 million to $22.8 million, without explaining a particular reason for the increase. (RCDI is a setaside within the community facilities grants program but is not limited to recipients of CF funds.)
The budget asks Congress to authorize foreclosure authority for USDA RD’s multifamily office that would be equivalent to HUD’s.
All housing construction or rehabilitation would be required to improve energy or water efficiency, or address climate resilience.
|USDA Rural Dev. Prog. (dollars in millions)||FY22 Final Approp.||FY23 Final Approp.||FY24 Admin. Budget|
|502 Single Fam. Direct||$1,250||$1,250||$1,500|
|Nat. Amer. SF Demo.||—||7.5||12|
|502 Single Family Guar.||30,000||30,000||30,000|
|504 VLI Repair Loans||28||28||50|
|504 VLI Repair Grants||32||32||40|
|515 Rental Hsg. Direct Lns.||50||70||200|
|514 Farm Labor Hsg. Lns.||28||20||50|
|516 Farm Labor Hsg. Grts.||10||10||18|
|521 Rental Assistance||1,450||1,488||1,650|
|523 Self-Help TA||32||32||40|
|533 Hsg. Prsrv. Grants||16||16||30|
|538 Rental Hsg. Guar.||250||400||400|
|Rental Prsrv. Demo. (MPR)||34||36||75|
|542 Rural Hsg. Vouchers||45||48||38|
|Rental Prsrv. TA||2||2||0|
|Community Facil. Loans||2,800||2,800||2,800|
|Community Facil. Grants||40||325.5*||87|
|Tribal Colleges CF Grts||10||10||10|
|Rural Cmnty. Dev’t Init.||6||6||22.8|
|Rural Hospital Pilot||–||–||2|
|Community Facil. Guarantees||650||650||650|
* Most of the CF grant funds in FY23 will be used for “Congressionally Directed Spending” (earmarks). Specific projects are catalogued in the explanatory statement for the final bill.