BJ Kinds (center), construction manager with Delta Design Build Workshop, frames a house in Eastmoor on Sept. 2, 2020.
Photo: Rory Doyle/ There is More Work to be Done
Rory Doyle/ There is More Work to be Done

Transformational Rural Resources & Reconciliation

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We are living through a momentous time. Trillions of dollars are flowing into communities to help address the impacts of the pandemic and position our nation to lead into the future. But, like water, federal funding often flows to the path of least resistance and historically this inertia has left behind rural areas, persistently poor counties, and communities of color. As Congress enters discussions on infrastructure, a focus on targeting these transformational resources to address long-existing patterns of rural poverty has never been more important.

There has been no lack of news coverage over the last year about Americans fleeing the big city for a quieter, more socially distanced small-town life. High-amenity rural communities across the country are seeing explosive growth that has led some to announce the beginning of a rural renaissance for American millennials. But this trend does not hold true for under-resourced rural places, which have often suffered under the weight of persistent poverty for decades.

Fortunately, Congress has recognized this need and infrastructure reconciliation conversations have included critical resources for rural affordable housing and community development. Many of these resources align with HAC’s 2021 Rural Housing Policy Priorities. Here are some highlights on these resources:

  • USDA Rural Housing Service Resources

    • A transformational investment in rural multifamily housing, including $4.36 billion for new construction, rehabilitation, and preservation of Section 515 rental housing and Section 514/516 farmworker housing, as well as $200 million for Section 521 Rental Assistance. With thousands of USDA multifamily units maturing and leaving the program each year and no funding for new construction in a decade, this investment could right the ship and preserve an estimated 38,720 units.
    • Additional support for rural affordable homeownership, including $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.

  • Rural Partnership Program (RPP)

    • The Rural Partnership Program (RPP) is a newly proposed program that is funded at nearly $4 billion and would provide flexible grants to support rural and tribal community development and capacity building. The proposed program has two parts: grants to support direct activities and projects, and grants to support the organizations responsible for providing technical assistance and capacity to administer the grants.

  • Other critical resources for rural housing

    • $25 million in additional funding for the Self-Help Homeownership Opportunity Program (SHOP) at HUD, which is a critical tool for rural affordable homeownership. HAC’s SHOP program has created nearly 10,000 homes in rural places across the country.
    • A $1 billion setaside of Community Development Block Grant (CDBG) funds for colonias on the U.S.-Mexico border. These generally unincorporated communities along the U.S.-Mexico border in California, Arizona, New Mexico, and Texas are characterized by high poverty rates and substandard living conditions, often lacking potable drinking water, water and wastewater systems, paved streets, and access to standard mortgage financing. This investment in colonias will allow these communities to develop the basic infrastructure they desperately need.

The new Administration has made geographic equity for rural places a priority, and we are hopeful that Congress will recognize the unique needs of rural areas and maintain these resources as the negotiations move forward. Rural communities are worthy of investment—and now is the time to make that investment in the future of rural America. If you would like to learn more about HAC’s policy priorities, click here.

Policy News from Congress

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

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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

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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 the Administration

HAC Recommends FHFA and the GSEs Prioritize Addressing Inequity

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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 the Administration

HAC Recommends Federal Actions for Rural Equity

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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 in the News

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

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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

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

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

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

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

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

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

USDA Rural Dev. Prog.

(dollars in millions)

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

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

 

Policy News from Congress

Congressional Hearing Addresses Refinancing for Rural Homeowners

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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

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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.”

Policy News from the Administration

Updated – Infrastructure Proposal Includes Housing, Broadband and a new Rural Partnership Program

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UPDATED March 31, 2021, 6:00 pm – The Biden administration released a sweeping infrastructure proposal today that includes both housing and rural economic development. Titled “The American Jobs Plan,” the proposal includes a wide array of subjects.

Rural, tribal and underserved areas are mentioned repeatedly in the White House’s fact sheet summarizing the plan, including in the housing section. HAC supports the inclusion of increased rural housing resources in the infrastructure plan, especially around USDA multifamily preservation and capacity building.

HOUSING

Acknowledging the severe shortage of affordable housing options in the United States, the White House would invest $213 billion to produce, preserve and retrofit affordable homes, including 500,000 for low- and middle-income homebuyers. The summary does not indicate how most of these funds would be divided among existing and new programs, except for $40 billion for public housing capital needs.

The proposal would:

  • “Produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy efficient, and electrified housing units. Through targeted tax credits, formula funding, grants, and project-based rental assistance, President Biden’s plan will extend affordable housing rental opportunities to underserved communities nationwide, including rural and tribal areas.
  • “Build and rehabilitate more than 500,000 homes for low- and middle-income homebuyers. President Biden is calling on Congress to take immediate steps to spur the construction and rehabilitation of homes for underserved communities. Specifically, he is calling on Congress to pass the innovative, bipartisan Neighborhood Homes Investment Act (NHIA). Offering $20 billion worth of NHIA tax credits over the next five years will result in approximately 500,000 homes built or rehabilitated, creating a pathway for more families to buy a home and start building wealth.
  • “Eliminate exclusionary zoning and harmful land use policies. For decades, exclusionary zoning laws – like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing – have inflated housing and construction costs and locked families out of areas with more opportunities. President Biden is calling on Congress to enact an innovative, new competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing.
  • “Address longstanding public housing capital needs. Years of disinvestment have left our public housing in disrepair. President Biden is calling on Congress to invest $40 billion to improve the infrastructure of the public housing system in America. This funding will address critical life-safety concerns, mitigate imminent hazards to residents, and undertake energy efficiency measures which will significantly reduce ongoing operating expenses. These improvements will disproportionately benefit women, people of color, and people with disabilities.
  • “Put union building trade workers to work upgrading homes and businesses to save families money. President Biden’s plan will upgrade homes through block grant programs, the Weatherization Assistance Program, and by extending and expanding home and commercial efficiency tax credits. President Biden’s plan also will establish a $27 billion Clean Energy and Sustainability Accelerator to mobilize private investment into distributed energy resources; retrofits of residential, commercial and municipal buildings; and clean transportation. These investments have a particular focus on disadvantaged communities that have not yet benefited from clean energy investments.”
RURAL PARTNERSHIP PROGRAM

The administration proposes a new $5 billion Rural Partnership Program “to help rural regions, including Tribal Nations, build on their unique assets and realize their vision for inclusive community and economic development. This program will empower rural regions by supporting locally-led planning and capacity building efforts, and providing flexible funding to meet critical needs.”

BROADBAND

The proposal calls for building high-speed broadband infrastructure to reach everyone in the country. It would prioritize support for broadband networks owned, operated by or affiliated with local governments, nonprofits and co-operatives because those providers feel “less pressure to turn profits and [have] a commitment to serving entire communities.” It would set aside funds for broadband infrastructure on tribal lands and would consult tribal nations in program administration.

RACIAL JUSTICE

The White House summary refers in several places to racial equity and the need to remedy past discrimination. It notes, for example, that low-income people and people of color are more likely than others to be affected by natural disasters and more likely to lack broadband internet access. It “targets 40 percent of the benefits of climate and clean infrastructure investments to disadvantaged communities.”

WATER AND WASTEWATER

The plan intends to “upgrade and modernize America’s drinking water, wastewater, and stormwater systems, tackle new contaminants, and support clean water infrastructure across rural America. Aging water systems threaten public health in thousands of communities nationwide. President Biden will modernize these systems by scaling up existing, successful programs, including by providing $56 billion in grants and low-cost flexible loans to states, Tribes, territories, and disadvantaged communities across the country. President Biden’s plan also provides $10 billion in funding to monitor and remediate PFAS (per- and polyfluoroalkyl substances) in drinking water and to invest in rural small water systems and household well and wastewater systems, including drainage fields.”

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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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