Policy News from Congress

Updated Sept. 14 – Rural Rental Housing and Repairs for Homeowners Included in Draft Bill

UPDATE September 14, 2021 – More rural housing funding has been added to the House Financial Services Committee’s portion of the reconciliation package. It now includes:

  • $4.36 billion for new construction, rehabilitation, and preservation of Section 515 rental housing and Section 514/516 farmworker housing;
  • $200 million for Section 521 Rental Assistance;
  • $70 million in budget authority for Section 502 direct homeownership loans (estimated to support loans totaling about $3.7 billion);
  • $95 million for Section 504 repair grants; and
  • $25 million for Section 523 self-help.

The bill sets no time limits for spending most of these funds, although the Rental Assistance money would expire on September 30, 2024.

Funding for HUD’s Self-Help Homeownership Opportunity Program (SHOP) was also added when the draft was revised. An additional $50 million would be available for SHOP over 10 years. As noted below, the bill provides substantial new funding for numerous HUD programs.

The Financial Services Committee began its consideration of the bill on September 13 and is continuing on September 14. The markup session will also consider a bill to reauthorize the Native American Housing Assistance and Self-Determination Act (NAHASDA), which would establish a new annual 5 percent setaside for tribes under USDA’s Section 502, 504, 515, 533, and 538 programs, as well as the Rural Utilities Service programs.

The Financial Service Committee’s portion of the reconciliation bill will be combined with pieces from other committees to create the full $3.5 trillion package. The House is expected to approve it. Then it will be considered in the Senate, where it needs only a majority vote to pass, but it is not yet clear whether enough Senators will vote for it.

 

September 9, 2021 – Congress’s $3.5 trillion reconciliation package includes $5 billion for USDA’s rural rental housing programs and $100 million for repairs to rural owner-occupied homes. The House Financial Services Committee released legislative text on September 9, providing details that were not previously available.

The $5 billion rural rental total would be used for new construction of Section 515 rental housing and 514/516 farmworker housing, and for preserving existing properties through the Multifamily Preservation and Revitalization program.

USDA’s Section 504 grant program, which covers the costs of health and safety repairs to owner-occupied homes in rural areas, would receive $100 million. These grants are usually available only to homeowners age 62 or older, but that age restriction would be waived for this pool of funds. The requirement that homeowners have very low incomes would remain in place.

The bill would also provide significant funding for numerous HUD programs including $35 billion for HOME and $8.5 billion for Community Development Block Grants. The colonias on the U.S.-Mexico border would receive a $1 billion setaside of CDBG funds.

The  Financial Services Committee will mark up this bill on September 13. (At the same session the committee will also consider two other bills, one to assist renters in the wake of the Supreme Court’s invalidation of the federal eviction moratorium, and one to reauthorize the Native American Housing Assistance and Self-Determination Act.)

All funds appropriated through the reconciliation bill would be in addition to the usual annual funding for these programs. Congress has not completed work on USDA’s or HUD’s annual appropriations for fiscal year 2022, which begins on October 1, 2021. The year is likely to begin with a continuing resolution holding programs at their FY21 levels.

Policy News from the Administration

HAC’s Statement on the End of the CDC’s Eviction Moratorium

The Housing Assistance Council (HAC) is concerned by the Supreme Court’s decision ending the national eviction moratorium. Without federal protection, hundreds of thousands of families now face the threat of eviction. Across America, many of these families will lose their homes.

“This pandemic and the unprecedented job loss it caused have exacerbated the housing challenges that rural communities have faced for a long time,” stated HAC CEO David Lipsetz. Millions of tenants, homeowners, and landlords across the country have fallen behind on rent and mortgage payments. Rural residents including Native Americans and farmworkers are among the Americans hardest hit by the pandemic and its housing impacts.

The end of the eviction moratorium is particularly troubling because housing loss poses serious dangers for renters’ health, as well as their finances. Eviction increases the risk of COVID-19 transmission and falls hardest on people of color, who are most likely to be evicted. Plus, renters with eviction records find it much harder to rent decent housing in the future since landlords often screen applicants with prior evictions.

Assistance to help cover rent, utilities, mortgages, and other costs is available from the federal government, states, and county or city governments. HAC has compiled links to resources for tenants, homeowners, and landlords on our website: ruralhome.org.

HAC works to ensure that everyone has a safe, decent, and affordable place to call home. We will continue to serve rural communities with dedication and compassion, just as we have for the last 50 years.

Policy News from Congress

Senate Proposes Some Increases for USDA Housing

August 5, 2021 – The Senate Appropriations Committee passed its FY22 USDA funding bill on August 4. While the House bill proposes a substantial increase in funding for the Multifamily Preservation and Revitalization program, the Senate bill would increase Section 515 funding rather than MPR. The Senate bill suggests increases in some other programs, but most of its figures are lower than the House’s.

The Senate bill would retain a provision in FY21 appropriations law, dropped by the administration’s budget and the House, that allows rental property owners to request 20-year terms for Rental Assistance contracts, subject to annual appropriations. The Senate and House would both keep provisions calling for incentives to nonprofits to preserve rental housing, reuse of recaptured Rental Assistance (RA), and use of recaptured RA from farmworker housing in other farmworker housing when possible, although those were left out of the administration’s budget request.

USDA Rural Dev. Prog.

(dollars in millions)

FY20 Final Approp. FY21 Final Approp. Amer. Rescue Plan Act FY22 Admin. Budget FY22 House Bill FY22 Senate Bill
502 Single Fam. Direct $1,000 $1,000 $656.6a $1,500 $1,500 $1,250
502 Single Family Guar. 24,000 24,000 30,000 30,000 30,000
504 VLI Repair Loans 28 28 18.3a 28 28 28
504 VLI Repair Grants 30 30 30 40 30
515 Rental Hsg. Direct Lns. 40 40 40 40 92
514 Farm Labor Hsg. Lns. 28 28 28 28 28
516 Farm Labor Hsg. Grts. 10 10 10 15 10
521 Rental Assistance 1,375 1,410 100 1,450 1,450 1,450
523 Self-Help TA 31 31 32 32 32
533 Hsg. Prsrv. Grants 15 15 15 25 15
538 Rental Hsg. Guar. 230 230 230 230 250
Rental Prsrv. Demo. (MPR) 28 28 32 60 32
542 Rural Hsg. Vouchers 32 40 45 45 45
Rental Prsrv. TA 1 2 0 2 2
Rural Cmnty. Dev’t Init. 4 6 6 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.

 

July 27, 2021 – The House passed H.R. 4502, a “minibus” package of seven appropriations bills, including USDA’s (see table below) and HUD’s.

July 1, 2021 – The full House Appropriations Committee approved its FY22 USDA funding bill on June 30, including increases in some rural housing programs as described below. The bill will be considered later this summer by the full House. The Senate has not yet released a proposal.

The House committee also released its report on the bill, providing additional information and directives from the committee, including a paragraph about farmworker housing.

Farm Labor Housing.—The Committee encourages USDA to explore opportunities to leverage its resources including its Food and Nutrition Programs, Community Facilities Programs, Housing Preservation Grants, and other programs, and to create partnerships with the Department of Labor’s Farmworker Housing outreach and technical assistance program, Health Resources and Services Administration’s Health Center Program, and the Administration for Children and Families Migrant and Seasonal Head Start Program, to coordinate and align resources to address the housing, nutrition and healthcare needs of this vulnerable population of essential workers who play a critical role in America’s food security. The Committee further encourages USDA to explore including service coordinators as an allowable expenditure for farm labor housing projects.

June 24, 2021 – As congressional action begins for fiscal year 2022 federal funding, the House Appropriations Committee has released a bill proposing increases in several of USDA’s rural housing programs.

Like the administration’s budget, the House bill would raise funding for Section 502 direct and guaranteed mortgage loans, Rental Assistance, and self-help housing. While the budget would increase the Multifamily Preservation and Revitalization (MPR) program to $32 million from $28 million in FY21, the House bill would provide a far larger boost, to $65 million. The House would also grow the Section 504 grant program for elderly low-income homeowners and the Section 533 Housing Preservation Grants program.

The House bill retains several provisions that are in current appropriations law but were dropped in the administration’s budget. These call for incentives to nonprofits to preserve rental housing, reuse of recaptured Rental Assistance (RA), and use of recaptured RA from farmworker housing in other farmworker housing when possible. Like the budget, however, it eliminates a provision from the FY20 and FY21 appropriations laws that allowed property owners to request RA contracts with 20-year terms.

The House Agriculture Appropriations Subcommittee will review the draft bill at a mark-up on June 25, 2021. The full House Appropriations Committee will consider it on June 30. The Senate has not yet begun its appropriations process.

 

USDA Rural Dev. Prog.

(dollars in millions)

FY20 Final Approp. FY21 Final Approp. Amer. Rescue Plan Act FY22 Admin. Budget FY22 House Bill
502 Single Fam. Direct $1,000 $1,000 $656.6a $1,500 $1,500
502 Single Family Guar. 24,000 24,000 30,000 30,000
504 VLI Repair Loans 28 28 18.3a 28 28
504 VLI Repair Grants 30 30 30 c
515 Rental Hsg. Direct Lns. 40 40 40 40
514 Farm Labor Hsg. Lns. 28 28 28 b
516 Farm Labor Hsg. Grts. 10 10 10 b
521 Rental Assistance 1,375 1,410 100 1,450 1,450
523 Self-Help TA 31 31 32 32
533 Hsg. Prsrv. Grants 15 15 15 c
538 Rental Hsg. Guar. 230 230 230 230
Rental Prsrv. Demo. (MPR) 28 28 32 60
542 Rural Hsg. Vouchers 32 40 45 45
Rental Prsrv. TA 1 2 0 2
Rural Cmnty. Dev’t Init. 4 6 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.

b. The House bill provides a total of $17.8 million in budget authority for the Section 514 and 516 farm labor housing programs. When the Appropriations Committee prepares a report on the bill, that document will state the program amounts.

c. The House bill provides a total of $65 million for Section 504 grants and Section 533 grants. When the Appropriations Committee prepares a report on the bill, that document will show how the total is to be divided between the two programs.

 

Policy News from the Administration

HAC Recommends FHFA and the GSEs Prioritize Addressing Inequity

HAC submitted comments in response to the Federal Housing Finance Agency’s (FHFA) Request for Input on the Enterprises’ 2022-2024 Duty to Serve Underserved Markets Plans. Through the Duty to Serve mandate, the Enterprises (Fannie Mae and Freddie Mac) are tasked with increasing liquidity and investment capital in three traditionally underserved markets: Rural Housing, Manufactured Housing, and Affordable Housing Preservation. HAC’s comment noted that secondary housing market policy is and has historically been part of a system that is delivering vastly different outcomes for people depending on where they are born – and this inequity must be addressed by more ambitious Duty to Serve investment and purchase goals.

Key Takeaways from HAC’s Comments

  • Be Ambitious

    More ambitious purchase and investment goals are needed as we enter the next phase of Duty to Serve.

  • Prioritize Equity

    Racial and geographic equity should be core to the Duty to Serve mission.

  • Encourage Partnership

    Strong rural partnerships are essential to Duty to Serve’s success.

  • Measure Success

    More transparent data is needed for stakeholders to truly understand and evaluate the success of Duty to Serve.

Policy News from Congress

Updated July 29 – FY22 Funding Bill Moves Forward in House

Updated, July 29, 2021 – The full House passed H.R. 4502, a “minibus” containing several FY22 appropriations bills, including the bills for both HUD and USDA.

 

Update, July 16, 2021 – The House Appropriations Committee has approved the Transportation-HUD funding bill. It is expected to be considered by the full House as part of a “minibus” package of several FY22 appropriations bills, which will also include the Agriculture bill.

 

On July 16, 2021 the House Appropriations Committee will consider a fiscal year 2022 funding bill for the Departments of Transportation and Housing and Urban Development. The bill was approved on July 12 by the T-HUD Appropriations Subcommittee.

The House bill would set funding levels for many HUD programs at or above the amounts requested in the President’s budget and would provide substantial increases above FY21 levels for almost all programs. Details are provided in the table below.

 

HUD Program

(dollars in millions)

FY20 Final Approp. FY21 Final Approp. FY22 Admin. Budget FY22 House Bill
CDBG $3,425 $3,475 $3,770 $4,688
HOME 1,350 1,350 1,850 1,850
Self-Help Homeownshp. (SHOP) 10 10 10 15
Veterans Home Rehab 4 4 4
Tenant-Based Rental Asstnce. 23,874 25,778 30,442 29,216
    VASH setaside 40 40 20
    Tribal VASH 1 5 5 5
Project-Based Rental Asstnce. 12,570 13,465 14,060 14,010
Public Hsg. Capital Fund 2,870 2,942 3,678 3,718
Public Hsg. Operating Fund 4,549 4,864 4,917 4,922
Choice Neighbrhd. Initiative 175 200 250 400
Native Amer. Hsg. 825 825 1,000 950
Homeless Assistance Grants 2,777 3,000 3,500 3,420
Hsg. Opps. for Persons w/ AIDS 410 430 450 600
202 Hsg. for Elderly 793 855 928 1,033
811 Hsg. for Disabled 202 227 272 352
Fair Housing 70.3 72.6 85 85
Healthy Homes & Lead Haz. Cntl. 290 360 400 460
Housing Counseling 53 57.5 85.9 100

 

Policy News from the Administration

HAC Recommends Federal Actions for Rural Equity

HAC submitted comments in response to an Office of Management and Budget request for input on whether federal agency policies and actions equitably serve all eligible individuals and communities, including rural residents. Noting that rural and persistently poor places have historically been and continue to be underserved by federal programs, HAC recommended a focus on capacity building, access to capital, and proactive and deliberate tailoring of federal programs to produce lasting rural equity.

Key Takeaways from HAC’s Comments

 

  • Rural Inclusion

    HAC is thrilled to see rural and persistently poor places included explicitly in the Executive Order on equity that President Biden released on his first day in office, and that is the basis for this OMB effort.

  • Historic Disinvestment

    Rural and persistently poor places have historically been and continue to be underserved by federal programs.

  • Focus on Equity

    We need federal focus on capacity building, access to capital, and proactive and deliberate tailoring of federal programs to produce lasting rural equity.

HAC and rural CDFIs receive “massive” $353 million investment

The US Treasury announced it is investing $1.25 billion of COVID-19 relief funds in Community Development Financial Institutions (CDFIs). We are excited to announce that the Housing Assistance Council (HAC) has received the maximum award: $1,826,265.

HAC will invest our $1.8 million award through our Loan Fund to support affordable housing organizations across rural America. As Eileen Neely, director of HAC’s Loan Fund explains, “$1.8 million means we can invest in more rural communities and help more low-income Americans get housed.”

Overall, the US Treasury is awarding $353 million to rural CDFIs. “This massive investment in rural CDFIs will help unlock the potential of rural communities,” said David Lipsetz, President & CEO of the Housing Assistance Council. “We are thrilled for the opportunity to expand our work for disinvested rural communities.”

Everyone deserves a safe, decent, and affordable place to call home. This award strengthens HAC’s work to make that vision a reality for rural America.

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.

 

Policy News from Congress

Congressional Hearing Addresses Refinancing for Rural Homeowners

On May 6, 2021 the House Appropriations Subcommittee on Agriculture held a virtual hearing on the Biden administration’s plans for the U.S. Department of Agriculture’s Rural Development mission area, which covers housing, community facilities, utilities and business. Broadband internet connection was the subject raised most often by members of the subcommittee.

Justin Maxson, the Deputy Under Secretary for RD, delivered written testimony and a prepared statement based on the FY22 budget “blueprint” released by the administration on April 9, which does not include any specifics on USDA’s housing programs.

AMERICAN RESCUE PLAN ACT FUNDS

Some details about the $39 million appropriated for USDA’s single-family direct loan programs in the American Rescue Plan Act, the most recent coronavirus relief package, were provided by Chad Parker, Acting Administrator of the Rural Housing Service. He said the funds will be used to refinance loans to existing USDA borrowers who have been under forbearance during the pandemic.

USDA expects to issue guidance to its staff later in May and then to begin accepting applications for these refinances in late May or early June. USDA anticipates the dollar value of these loans will be about $650 million for Section 502 direct mortgages and $18.8 million for Section 504 home repair loans, Parker said. The $39 million figure in the statute refers to budget authority, the amount it will actually cost the government to provide the new loans. The American Rescue Plan Act also appropriated $100 million to provide Section 521 Rental Assistance for tenants who do not already receive it. USDA has already issued guidance for field staff regarding these funds.

RENTAL PRESERVATION AND OTHER HOUSING TOPICS

Responding to a question from Bishop, Parker reported that USDA has 171 shovel-ready projects in line to receive FY21 funding under the Multifamily Preservation and Revitalization Program. In the longer term, he said, it will be important to address the past underfunding of the multifamily programs and to provide Section 521 Rental Assistance for currently unassisted tenants.

Bishop also asked about options for relieving the “subsidy recapture” burden when a homeowner with a Section 502 direct loan sells their home and is then required to repay the subsidy provided through the low-interest USDA mortgage. USDA would welcome a change in that requirement, Parker replied, but it is imposed by statute and would have to be removed by Congress. He noted that the recaptured subsidy is used for the program, so eliminating the recapture requirement would increase the program’s cost.

USDA STAFFING AND LOCAL CAPACITY

Maxson’s testimony emphasized the need to increase Rural Development’s staffing. RD’s “portfolio is currently more than twice as large as it was 10 years ago with a staff that is 30% smaller,” his written statement asserted. In addition, within three years a third of RD’s professional staff will be eligible for retirement.

Bishop noted that local community capacity is also important to ensure full use of USDA’s resources, and Maxson agreed.

Maxson referred several times to what he called the “StrikeForce 2.0” initiative, for example telling Rep. Henry Cuellar (D-TX) that effort would help coordinate among federal agencies in order to meet the needs of the colonias along the U.S.-Mexico border. The budget blueprint describes StrikeForce as “a renewed and expanded initiative to leverage USDA’s extensive network of offices to help people in high poverty communities tap into Federal resources.” The original StrikeForce initiative was launched during the Obama Administration and was used in several states.

Appearing with Maxson and Parker, and responding to questions about their agencies, were Karama Neal, Administrator of the Rural Business-Cooperative Service, and Christopher McLean, Acting Administrator of the Rural Utilities Service.

Policy News from the Administration

Biden Budget Outline Calls for More HUD Funding and Expanded Rural StrikeForce

April 9, 2021 – The Biden Administration’s first budget request, released today, outlines priorities including increases in some Department of Housing and Urban Development programs but does not mention the U.S. Department of Agriculture’s rural housing programs. A more detailed budget will be issued later this spring.

The Administration proposes to increase funding above current levels for the Rural e-Connectivity broadband program, rural water and wastewater programs and USDA’s civil rights office. It also:

Partners with Rural Leaders to Grow Rural Economies and Tackle Rural Poverty. The discretionary request provides $32 million for a renewed and expanded initiative to leverage USDA’s extensive network of offices to help people in high poverty communities tap into Federal resources, referred to as the “Strikeforce” initiative. USDA will coordinate with other Federal agencies on an all-of-Government approach to connect rural stakeholders with Federal programs and resources.

The StrikeForce initiative, which was used in several states, was launched during the Obama Administration.

Rural development is also mentioned in a paragraph about Community Development Financial Institutions:

Invests in American Communities and Small Businesses. To support and empower the Nation’s most vulnerable communities, including many rural communities, the discretionary request provides $330 million, an increase of 22.2 percent above the 2021 enacted level for annual appropriations, to support expanding the role of Community Development Financial Institutions (CDFIs), which offer loans to start-ups and small businesses to promote the production of affordable housing and community revitalization projects. This investment builds on an unprecedented level of support for the CDFI industry in 2021, including more than $3 billion in direct funding, $9 billion for investments in CDFIs and Minority Depository Institutions, and provisions in the American Rescue Plan Act of 2021 encouraging CDFI participation in the $10 billion State Small Business Credit Initiative.

HUD funds requested in the budget document include:

  • 200,000 new vouchers;
  • $1.9 billion for the HOME program, an increase of $500 million over FY21 funding;
  • support for an additional 100,000 homeless households;
  • $800 million for modernization and rehabilitation of HUD-supported housing;
  • $3.2 billion for public housing modernization;
  • $180 million to support 2,000 units of new permanently affordable housing for the elderly and persons with disabilities;
  • $900 million for Native American housing;
  • $3.8 billion for the Community Development Block Grant program,  including “a targeted increase of $295 million to incentivize communities to direct formula funds toward the modernization and rehabilitation of public infrastructure and facilities in historically underfunded and marginalized communities facing persistent poverty”;
  • $400 million, a $40 million increase, for prevention of lead and other hazards; and
  • $85 million for fair housing.

The HUD section of the document states that, “The discretionary request supports access to homeownership for underserved borrowers through the Federal Housing Administration’s (FHA) mortgage insurance programs.”