Senate Bill Holds Line on Most USDA Housing Programs, But Unable to Restore Cuts to Section 502 and Self-Help

On July 11, 2024, the Senate Appropriations Committee approved a fiscal year 2025 funding bill that would keep many of USDA’s rural housing programs at their current funding levels. Where the bill does not adopt current levels, it largely follows the administration’s budget request. Section 502 direct loans are a notable exception: the Senate would raise this homeownership program to $1 billion from its FY24 level of $880 million, but even with the increase the program would remain substantially below its FY23 level of $1.25 billion. The administration’s budget request asked for a return to $1.25 billion. Self-help technical assistance is another exception, with a proposed level of $25 million rather than the $32 million that was appropriated in FY23 and requested in the budget.

— HAC’s analysis of FY25 appropriations for HUD programs is available here.  —

Details on the Senate and House bills are provided in the table below.

The Senate bill would expand the current decoupling pilot, which allows Section 515 properties to continue receiving Section 521 Rental Assistance after the Section 515 mortgage is paid off. The Senate proposes to allow 5,000 units of decoupled RA rather than the current 1,000. The House bill would also continue the pilot, but would keep it at 1,000 units.

The funding levels proposed for two capacity-building programs, the Rural Community Development Initiative and rental preservation TA, are stated differently in the Senate bill and in the report that accompanies it. The table below shows the figures from the bill itself. For RCDI, the bill text shows a $5 million funding level, but the report shows only $1 million. For rental preservation, the bill provides $2 million but the report says $1 million.

While the House bill includes a provision blocking implementation of new energy efficiency standards for some USDA-financed homes, the Senate bill does not.


($ in millions)
FY23 Final FY24 Final FY25 Budget FY25 House,

H.R. 9027

FY25 Senate,

S. 4690

FY25 Final(a)
502 SF Direct Loans $1,250 $880 $1,250 $950 $1,000
     Nat. Amer. SF Demo 7.5 5 7.5 5 7.5
502 SF Guar. Loans 30,000 25,000 30,000 25,000 25,000
504 VLI Repair Loans 28 25 28 18 25
504 VLI Repair Grants 32 25 30 12 30
515 MF Direct Loans 70 60 70 48 65
514 Farm Labor Hsg. Loans 20 15 25 12.5 25
516 Farm Labor Hsg. Grants 10 7.5 10 0 7.5
521 Rental Asst. 1,488 1,608 1,690 1,684 1,691
523 Self-Help TA 32 25 32 20 25
533 Hsg. Prsrv. Grants 16 10 16 8 10
538 MF Guar. Loans 400 400 400 400 400
542 Vouchers 48 48 38(b) 54 50.4
Rental Prsrv. Demo (MPR) 36 34 90 28 36
Rental Prsrv. TA 2 1 0 0 2(d)
Rural Cmty. Dev’t Init. 6 5 6 4 5(e)
Cmty. Facil. Direct Loans 2,800 2,800 1,250 1,000 $1,250
Cmty. Facil. Grants 25 5 22 (c) 5
   Tribal Colleges CF Grants 10 8 10 6 8
   Energy Cmties. Grants 10
Cmty. Facil. Guar. 650 650 650 650 650

Abbreviations key

  • MF: Multfamily (Rental)
  • SF: Single-Family (Homeownership)
  • TA: Technical Assistance
  • VLI: Very Low-Income

(a) This column will be filled in as the FY25 funding process progresses.

(b) This $38 million is to renew vouchers already issued. Most tenants in USDA-financed rental properties where mortgages end or are paid off would receive Section 521 Rental Assistance under the Administration’s decoupling proposal. An additional $20 million is included in the HUD tenant protection vouchers account to provide new vouchers for tenants “in USDA properties that are unable to refinance, participate in the multi-family preservation and rehabilitation options, or decouple.”

(c) The amount proposed for non-earmarked Community Facilities grants in the House bill remains unclear after release of the committee’s report. It shows a grant level of $472 million, which includes Congressionally Directed Spending (earmarks).

(d) The Senate bill’s text shows $2 million for rental preservation TA, but the report accompanying the bill shows $1 million.

(e) The Senate bill’s text shows $5 million for RCDI, but the report accompanying the bill shows $1 million.

House Bill Proposes Cuts to Smaller Rural Housing Programs

UPDATE July 11, 2024 – On July 10 the full House Appropriations Committee approved its Agriculture appropriations bill for FY25. The full Senate Appropriations Committee has approved a bill as well, but has not yet released the full text. The Senate committee’s summary of its bill provides numbers for two of the rural housing programs: it says the bill includes $1 billion for Section 502 direct and $1.691 billion for Section 521 Rental Assistance.

On July 10, 2024, the full House Appropriations Committee is marking up appropriations bills for USDA, Transportation-HUD, and Labor. The committee has released its reports on these bills, which provide additional details that were not available at the subcommittee level.

The committee’s report on the USDA funding bill makes clear that, while the committee supports the larger rural housing programs such as Section 502 direct and guaranteed homeownership loans, Section 521 Rental Assistance, and tenant vouchers, it proposes cuts in the smaller programs, all of which are important to lower income rural residents.

In addition to the cuts in self-help, home repair, and rental housing noted below, the bill proposes no funding for Section 516 farm labor housing grants, which received $7.5 million this year. It would reduce Section 514 farm labor loans from $15 million in FY24 to $12.5 million in FY25. Section 514 loans were at $20 million in FY23.

The report also makes clear the scope of the proposed reductions in the Section 504 repair grants program, from $25 million in FY24 to $12 million in FY25, and the Section 533 Housing Preservation Grants program, from $10 million this year to $8 million next year. The FY24 levels for both of those programs were lower than their FY23 appropriations.

House Bill Proposes Rural Housing Cuts, Though Not for Purchase Mortgages or Rental Vouchers

June 11, 2024 — The House Appropriations Subcommittee released its fiscal year 2025 funding proposal for USDA on June 10, 2024, and will hold a markup at 6:00 pm Eastern time on June 11. As expected, the bill would fund most USDA housing programs at levels lower than those enacted for FY24 or proposed in the administration’s FY25 budget.

The House measure would increase Section 502 direct loans to $950 million, higher than the $880 million level for FY24 but not at the $1.25 billion provided in FY23 or requested in the FY25 budget. It would keep the Section 502 guaranteed loan program at $25 billion and Section 538 guaranteed multifamily loans at $400 million.

The bill appears to provide no funding at all for Section 516 farmworker housing grants, which are used by nonprofit developers alongside Section 514 loans.

Homeownership Housing

Despite its support for home purchase programs, the House bill would reduce funding for self-help housing, Section 504 home repair loans and grants, and Section 533 Housing Preservation Grants.

Rental Housing

The bill proposes cuts in rental preservation programs, reducing Section 515 loans from $60 million in FY24 to $48 million and the Multifamily Preservation and Revitalization (MPR) program from its current $34 million to $28 million. It shows some support for tenants, however, with Section 521 Rental Assistance funding almost at the level requested by the administration’s budget, an increase in Section 542 vouchers, and continuation of the 1,000-unit demonstration program that decouples Rental Assistance from USDA mortgages reaching the end of their terms.

Energy Efficiency

The House bill would prohibit use of any USDA housing funds to implement a recent determination made jointly by HUD and USDA that would require some federally supported new housing construction, including single-family homes supported by USDA’s Section 502 direct, Section 502 guaranteed, or Section 523 self-help programs, to meet updated energy efficiency standards. The ban, tucked into Section 743 in the bill’s “general provisions,” is reminiscent of an amendment defeated in the Senate in October 2023. That proposed amendment would have prevented HUD implementation of the same energy efficiency standards.

Community Facilities

The bill would cut funding for Community Facilities direct loans by two-thirds, from $2.8 billion in FY24 to $1 billion in FY25.

Administration Proposes Small Increases in Many Rural Housing Programs

The Biden Administration’s budget for fiscal year 2025, released on March 11, 2024, would hold funding at FY23 levels for most of USDA’s rural housing programs. In effect, it would restore the cuts made in the final FY24 appropriations bill, which was passed after the budget was prepared. Details are provided in the table below.

The recording and slides from HAC’s March 13 webinar on Rural Housing in the Fiscal Year 2025 White House Budget are posted here.

Homeownership Housing7

Like last year’s budget proposal, this year’s would eliminate subsidy “recapture” for the Section 502 direct program. Recapture requires that, when a low- or very low-income homeowner with a Section 502 direct 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 $1.12 billion. It also proposes that Section 502 direct loans made in 2025 will not to be subject to recapture.

The budget would require that funding for housing construction or rehabilitation be targeted to projects that improve energy or water efficiency, implement green features, including clean energy generation or building electrification, electric car charging station installations, or address climate resilience of properties.

The budget also proposes three changes that were just adopted in the final FY24 funding bill, which had not been passed yet when the budget was prepared. These include extending the length of self-help and site-development loans from two years to five, and standardizing foreclosure procedures consistent with HUD’s.

Rental Housing

The administration again asks for legislative language to “decouple” Section 521 Rental Assistance from Section 515 and 514 mortgages, so that when a USDA rental housing mortgage ends for any reason, the tenants can continue to receive Rental Assistance. The final FY24 bill authorized a limited pilot to decouple up to 1,000 units of RA, but the budget does not propose any limits.

The budget requests Section 542 voucher funding be used only to renew “legacy vouchers,” $11.79 million in unobligated voucher funds be rescinded, and $20 million be added to provide HUD tenant protection vouchers for tenants “in USDA properties that are unable to refinance, participate in the multi-family preservation and rehabilitation options, or decouple.”


House Committee Approves 60% Cut in HOME Program Funding

UPDATE July 11, 2024 – The full House Appropriations Committee approved the proposed FY25 Transportation-HUD spending bill on July 10. The Senate Appropriations Committee has begun releasing summaries of its FY25 bills, but T-HUD is not yet available.


June 27, 2024 – The HOME program would be dramatically smaller under the FY25 spending bill approved by an appropriations subcommittee on June 26, 2024. The bill, which will be considered by the full Appropriations Committee on July 10, would also block implementation of the Biden administration’s proposed Affirmatively Furthering Fair Housing rule and the recent energy efficiency determination made by HUD and USDA.

Details are provided in the table below.

— HAC’s analysis of FY24 appropriations for USDA housing programs is available here. —

The summary of the House bill provided by the Transportation-HUD Appropriations Subcommittee says that it funds “full renewal for all currently-leased, tenant-based rental assistance vouchers, all project-based rental assistance contracts, and all housing for the elderly and persons with disabilities contracts.” It would cut HOME, however, to $500 million from $1.25 billion in FY24. The Self-Help Homeownership Opportunity Program (SHOP) would be cut from $12 million in FY24 to $9 million next year. And the Choice Neighborhoods program would receive no funding at all.

The Senate has not yet released its version of the bill.

($ in millions)
FY23 Final FY24 Final FY25 Budget FY25 House FY25 Senate* FY25 Final*
CDBG $3,300 $3,300 $2,900 $3,300
HOME 1,500 1,250 1,250 500
PRICE Manuf. Hsg. 225 10 0 10
Self-Help Hmownrshp (SHOP) 13.5 12 9 9
Veterans Home Rehab 1 0 0 0
Rural Cap’y Bldg (RCB) 6 6 5 5
Tenant-Based Rental Asst. 27,600 32,387 32,756 32,272
     VASH 50 15 0 0
     Tribal VASH 7.5 7.5 5 8
     Replacemts for 521 RA 20**
Project-Based Rental Asst. 13,938 16,010 16,686 16,195
Public Hsg. Capital Fund 3,200 3,410 3,312 3,047
Public Hsg. Operating Fund 5,109 5,501 5,238 5,097
Choice Neighborhd. Initiative 350 75 140 0
Native Amer. Hsg. 1,020 1,344 1,053 1,455
Homeless Asst. Grants 3,633 4,051 4,060 4,060
Hsg. Oppties for Persons w/ AIDS (HOPWA) 499 505 505 505
202 Hsg. for Elderly 1,075 913 931.4 931.4
811 Hsg. for Disabled 360 208 256.7 256.7
Fair Hsg. 86 86.4 86.4 85
Healthy Homes & Lead Control 410 345 350 335
Hsg. Counseling 57.5 57.5 57.5 57.5

* These columns will be filled in as the FY25 funding process progresses.

** Up to $20 million would be set aside to provide tenant protection vouchers to tenants who had USDA Section 521 Rental Assistance but are losing it because their building is losing or ending its USDA mortgage.

Administration’s Budget Requests Substantial New HUD Funding

March 12, 2024 – The Biden Administration’s budget for fiscal year 2025, released on March 11, 2024, includes proposals for HUD and other housing programs – USDA, the Low-Income Housing Tax Credit, and others – that are part of broader Administration efforts to help meet increasing housing costs and address homelessness. If the budget were adopted as proposed, several pieces of this mosaic would be mandatory funding rather than discretionary, and others would be tax credits. Discretionary funds are subject to annual appropriations, while mandatory spending is not, so it is not subject to the caps on discretionary spending imposed by the 2023 debt limit agreement.

The recording and slides from HAC’s March 13 webinar on Rural Housing in the Fiscal Year 2025 White House Budget are posted here.

Discretionary Funds

The budget would reduce funding for many of HUD’s housing production programs, including HOME, CDBG, SHOP, and Native American housing. It requests a total of $1.053 billion for Native American housing, just barely above the $1.02 billion provided in FY23 and notably lower than the $1.34 billion just adopted for FY24.

Tenant support fares somewhat better. For example, the budget proposes a total of almost $32.8 billion for Tenant-Based Rental Assistance (Housing Choice Vouchers), of which $29.25 billion is intended to renew all existing vouchers. An additional $241 million would provide 20,000 new incremental vouchers. (Separately, the mandatory funding proposals would guarantee vouchers to all extremely low-income veterans and all youth aging out of foster care.)

The budget also requests $30 million for the Recovery Housing Program, which allocates funds to states to provide temporary housing for individuals recovering from substance use disorders, including opioids.

Proposed New Mandatory Spending

The Administration’s proposals for mandatory spending programs cover production of new units, tenant assistance, and homelessness solutions.

  • Extremely low-income housing supply subsidy: $15 billion
    • New Project-Based Rental Assistance: $7.5 billion
    • Preserve distressed public housing: $7.5 billion
  • Innovation Fund for Housing Expansion: $20 billion
  • Housing vouchers for vulnerable low-income populations: $22 billion
    • all youth aging out of foster care: $9 billion
    • extremely low-income veterans: $13 billion
  • First-generation homebuyer down payment assistance: $10 billion
  • Sustainable eviction prevention reform: $3 billion
  • Homelessness grants: $8 billion
  • Emergency rental assistance for older adults at risk of homelessness: $3 billion

Tax Credit Proposals

  • The budget would expand the Low-Income Housing Tax Credit to build or preserve 1.2 million more affordable rental units. It asks Congress to increase per capital credit allocations, reduce the bond financing threshold, and revise the “qualified contract” and “right of first refusal” provisions for future developments.
  • A mortgage relief credit would provide middle-class first-time homebuyers with an annual tax credit of $5,000 a year for two years. The White House says that “this is the equivalent of reducing the mortgage rate by more than 1.5 percentage points for two years on the median home, and will help more than 3.5 million middle-class families purchase their first home over the next two years.”
  • A separate one-year tax credit is intended to assist homeowners who could purchase a larger or more expensive home but hesitate to sell their starter home because of high mortgage rates or high housing costs. A middle-class homeowner would receive a credit up to $10,000 for selling a home below the area median home price in the county to another owner-occupant. The White House estimates this proposal would help nearly 3 million families.
  • A new Neighborhood Homes Tax Credit would allocate credits to developers and other sponsors of new construction or substantial rehabilitation of homeownership units in distressed areas. The White House estimates this would generate over 400,000 homes.

The Administration also proposes requiring each Federal Home Loan Bank to contribute 20 percent, rather than the current 10 percent, of annual income to the Affordable Housing Program. It calculates the change would raise an additional $3.79 billion for affordable housing over the next decade and assist nearly 380,0000 households.

Rental Preservation

HAC Announces New Center for Rural Multifamily Housing Preservation

Contact: Kristin Blum
(202) 842-8600

Washington, DC, March 6, 2024 – The Housing Assistance Council (HAC) is announcing the creation of the Center for Rural Multifamily Housing Preservation, a cross-disciplinary initiative to preserve rural rental housing, particularly properties financed through the U.S. Department of Agriculture’s “Section 515” program.  The Center will provide technical assistance and expertise to preserve the long-term affordability of this critical housing stock. HAC’s Kristin Blum, a recognized expert in the affordable housing industry, has been tapped to lead the initiative.

“The time to act is now,” according to HAC CEO David Lipsetz. “The cost of housing is at a historic high across the United States. Workers, seniors, young people, and families are all feeling the pinch. As the nation’s rural housing intermediary, HAC must do its part to help small towns keep great quality housing and build to meet the demands of the modern economy. The Center will do just that.”

The Center for Rural Multifamily Housing Preservation will promote what works, create solutions where needed, and advance the role of housing organizations in rural communities. It will draw on HAC’s decades of success working with communities to preserve existing affordable rental housing and build more where it is needed. “The Center will bring together HAC’s unique combination of resources – lending, research, policy and direct technical assistance – to both preserve individual properties and redefine the preservation process,” Kristin Blum points out.

Rental homes financed by USDA are an important source of affordable rental housing that can be found in 87 percent of all U.S. counties. The Department’s Section 515 program alone produced 550,000 affordable apartments in rural communities. Unfortunately, the program has not produced new units in over a decade and has lost more than 150,000 of its original units to reach its current size of less than 390,000 units, according to the recent FY2023 Multifamily Housing Occupancy Report. In many rural communities, these apartments are the only affordable rental housing available. Two thirds of those families and individuals in Section 515 properties are seniors or individuals with disabilities, and the average income of tenants is less than $16,000.

In the face of this escalating crisis, existing preservation efforts have suffered from a lack of adequate public and private funding and a disproportionate focus on unique transactions. A cohesive, broad preservation strategy is needed to effectively address this crisis before it reaches its peak in the next several years. Through the Fiscal Year 2024 appropriations bill, Congress has granted USDA the authority to pilot a new proposal to decouple Section 515 mortgages and Section 521 rental assistance – an opportunity that will require substantial stakeholder engagement and capacity-building to be successful.

“These apartments are home to families, seniors, and individuals with disabilities who could otherwise face homelessness,” Lipsetz said. “It’s time for the country – including the federal government and philanthropy – to invest some real muscle in preserving these vital homes before they are lost forever.”

“I can think of nobody better than Kristin to lead this critical initiative,” continued Lipsetz, “She has done remarkable work as a senior member of HAC’s Lending team and brings a wealth of prior experience building the capacity of the nonprofit housing sector.” With support from the USDA and Fannie Mae, the Center for Rural Multifamily Housing Preservation will bring together all of HAC’s expertise across the fields of lending, technical assistance, federal policy, and research in pursuit of transformational solutions to preserve this critical stock of affordable rural rental housing.

For more information, contact:

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.

Explore some of HAC’s past work on Section 515 preservation:

HAC’s 2024 Rural Housing Policy Priorities

HAC’s 2023 Senate Banking Committee Testimony on Section 515 Preservation

HAC’s 2022 Annual Report

HAC’s 2022 Rural Research Brief on Section 515 Preservation

HAC’s 2018 “Platform for Preservation” Report on Section 515 Preservation


Policy News from the Administration

HAC’s Comments on Rental Assistance Decoupling – August 2023

The Fiscal Year 2023 President’s Budget included a request to decouple USDA Section 521 Rental Assistance from Section 515 Multifamily Loans to facilitate the rehabilitation and preservation of the multifamily portfolio. To explore the potential impacts, Congress directed USDA to conduct a series of stakeholder meetings and provide a report on how decoupling would be implemented. HAC submitted comments in support of decoupling, with a focus on the topics below.

  • Making Long Term Affordability Parameters the Top Priority
  • Considering A Pilot Concept When Implementing Decoupling
  • Clarifying the Annual Rent Increase Process for Decoupled RA Units
  • Establishing A Plan for Units Without Rental Assistance in Decoupled Properties
  • Maintaining Support for the Entire Suite of Preservation Programs, Even If Decoupling Becomes an Option
  • Establishing A Plan for Prepayments, Since the Bulk of Units Are Lost to Prepayments
  • Improving Data Transparency At RHS

Read HAC’s full comments.

HAC Decoupling Comments 2023

Old Historic Carnation, LP: A HAC Success Story

HAC’s patience and flexibility help convert a vacant Carnation milk plant into homes for seniors in Tupelo, MS

Rendering of carnation plant developmentThe Carnation Milk plant in Tupelo, Mississippi, has sat vacant since 1972. In about a year, that will change when 33 low-income senior households move into new affordable homes in this old factory. This May, Old Historic Carnation, LP broke ground on Carnation Village, a $16.8 million adaptive reuse project to convert the abandoned factory into 33 units of affordable senior housing. These units are sorely needed in Tupelo, a high-poverty community which needs over 1,500 additional senior affordable housing units. With a $325,000 loan from The Housing Assistance Council (HAC)—and two sixth-month extensions to that loan—the developer successfully navigated a predevelopment process mired in construction cost increases and unexpected funding gaps. Here’s how:

Photo of vacant Carnation plantThe original project scope called for 50 units: 25 from an adaptive re-use of the plant itself and another 25 in a second building to be constructed next door. When our loan closed in July 2021, the project budget totaled about $12.7 million, to be funded by Low Income Housing Tax Credits, Historic Tax Credits, and a $1.6 million equity investment. Our financing covered the predevelopment costs of the work required to get to construction financing closing including environmental testing, historic preservation approvals, tax credit application and reservation fees, a market study, and an appraisal.

In the fall of 2021, increases in construction costs left Old Historic Carnation with a $3.8 million funding gap. By the time they applied for and received more tax credits from the Mississippi Housing Corporation (MHC), added a $1 million mortgage, received approval from the National Park Service, and updated the construction bids, costs had increased by a further $4.5 million. In the space of less than a year, the construction cost for the project nearly doubled.

Because HAC can be a patient lender, we extended our loan by six months to give the developer time to solve the problem. Old Historic Carnation applied for and received another tax credit increase from the state, reduced costs with value engineering measures, and increased the deferred developer fee by almost $2 million.

Construction costs increased again in the summer of 2022, causing the equity investor to back out of the project. The developer went back to the drawing board once again and reduced the project’s scope to 33 units, all affordable to households making less than 80% of the area median income (AMI). Plus, 26 would also be affordable to households under 60% AMI. With an additional loan extension from HAC, Old Historic Carnation secured approval of the new scope by MHC, obtained the necessary building permits, and have now begun demolition.

HAC Loan Office Alison Duncan (center) breaks ground for Carnation Village.

HAC Loan Office Alison Duncan (center) breaks ground for Carnation Village. Photo by Adam Robison, the Daily Journal.

On March 21st, Old Historic Carnation, LP closed on construction financing and repaid our predevelopment loan in full. And on May 31st, the project broke ground. Old Historic Carnation’s persistence and creativity made this project a success. But it was HAC’s flexibility that supported them as they went through the process of raising additional funds three times to make the project work. The Carnation Village project showcases how the ingenuity of a local housing developer, solid working relationships with private, state and federal funders, and flexible and patient HAC financing all add up to bring difficult and important projects to fruition. Fifty-one years ago, Carnation Milk closed its factory in Tupelo, Mississippi. Soon, thirty-three low-income, senior households will be able to call it home.

HAC is proud to be a critical part of this project and we look forward to watching it develop.

HAC President & CEO, David Lipsetz, testifies in front of the Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Housing, Transportation, and Community Development

HAC’s CEO Testifies to Senate Banking Subcommittee on Rural Housing Reforms

HAC was honored to be invited to testify on May 2, 2023 before the Housing, Transportation, and Community Development Subcommittee of the U.S. Senate Committee on Banking, Housing, and Urban Affairs to discuss commonsense, bipartisan reforms to the U.S. Department of Agriculture’s Rural Housing Service (RHS) programs. HAC’s President & CEO, David Lipsetz, was one of five witnesses on the hearing panel.

The hearing was held to discuss the bipartisan Rural Housing Service Reform Act of 2023, which has been introduced by Subcommittee Chairwoman Tina Smith (D-MN) and Senator Mike Rounds (R-SD). The RHS Reform Act includes a slate of provisions to improve the multifamily, single-family, and capacity building programs at RHS. Senators Smith and Rounds engaged deeply with stakeholders on the creation of the bill, including offering a call for policy recommendations in the summer of 2022. HAC’s response to that comment opportunity can be seen here. We were thrilled to see many of our recommendations included in the bill, and applaud Senators Smith and Rounds on their thoughtful engagement with stakeholders and their commitment to improving the RHS programs.

Highlights from the RHS Reform Act include:

  • Multifamily

    • Authorizing the Multifamily Preservation and Revitalization (MPR) program and Multifamily Preservation Technical Assistance Program
    • Allowing for the decoupling of a Section 515 mortgage and Section 521 Rental Assistance
    • Allowing Section 542 rural vouchers to be adjusted based on changes in tenant income
    • Streamlining the process for Section 515 nonprofit transfers and increasing the Section 515 nonprofit set aside
  • Single Family

    • Establishing the Native CDFI Section 502 relending program
    • Increasing the threshold for the mortgage requirement on a Section 504 home rehab loan from $7,500 to $15,000
    • Extending the loan term for a Section 502 loan up to 40 years
  • Capacity Building

    • Authorizing the Rural Community Development Initiative (RCDI) and waiving the matching funds requirement for groups working in areas of persistent poverty
    • Requiring RHS to publish more data on their housing programs
    • Authorizing funding for much needed technology upgrades at RHS
Watch the Recording Read David’s Testimony HAC’s 2023 Policy Priorities
Policy News from Congress

HAC’s Research Director Testifies to Senate Banking Committee on the State of Housing 2023

HAC was deeply honored by an invitation to testify at the first hearing held in the new 118th Congress by the Senate Banking, Housing, and Urban Affairs Committee. Titled The State of Housing 2023, the session featured Lance George, HAC’s Director of Research and Information, as one of  three witnesses.

A wide range of topics was covered by the witnesses’ testimony and the Senators’ questions. Among the key areas of concern were the gap between housing supply and need, the high cost of both homeownership and rental housing, and what congressional actions could address these challenges. Committee Chair Sherrod Brown (D-Ohio) asked specifically about the loss of rentals financed by USDA’s Section 515 program, a serious concern addressed by HAC research in 2016 and 2022.

Key Takeaways

Lance’s statement made five key points about the state of rural housing in 2023:

  • The pandemic left its mark on rural America and housing markets remain uncertain.
  • Rural mortgage markets are being impacted by interest rates and prices too.
  • Affordability is the greatest housing challenge in rural America, by far.
  • Manufactured housing is an often overlooked but important source of housing – especially in rural America.
  • Race matters across the rural spectrum – especially in housing.

Key policy recommendations, based on HAC’s full set of policy priorities for 2023, included:

  • Increase rural communities’ access to credit and capital and strengthen USDA and HUD homeownership supports.
  • Improve opportunities and financing for preserving aging rental properties and protecting tenants.
  • Authorize the powerful Rural Community Development Initiative and a significant cross-sectoral, flexible capacity building rural investment initiative.

Lance George

Lance George

HAC’s Director of Research & Information

Watch the Hearing

USDA Rural Development Obligations Cover

USDA Rural Development Obligations FY 22- September

HAC presents the FY 22 September USDA Rural Housing Service (RHS) monthly obligations report.*

Download the Spreadsheet.

* The Rural Housing Service (RHS) monthly obligation reports are produced by the Housing Assistance Council (HAC) 1025 Vermont Ave., NW, Suite 606, Washington, DC 20005. The monthly figures derive from HAC tabulations of USDA –RHS 205c, d, and f report data. For questions or comments about the obligation reports, please contact Lance George at 202-842-8600 or

Policy News from Congress

HAC’s Stakeholder Comments on Rural Housing Service Programs

HAC submitted comments to Senators Tina Smith (D-MN) and Mike Rounds (R-SD), the Chair and Ranking Member of the Housing, Transportation, and Community Development Subcommittee of the Senate Banking Committee, in response to their call for recommendations on how to improve the U.S. Department of Agriculture’s (USDA) Rural Housing Service (RHS) programs. RHS programs are a critical source of housing for our nation’s small towns and rural places. HAC hopes that Senators Smith and Rounds will use these stakeholder comments to help improve the efficiency and impact of RHS programs, especially as more multifamily properties leave the USDA portfolio.

Topline Takeaways  

  • Multifamily

    HAC strongly recommends that the Senators authorize important multifamily preservation programs and simplify the process for transferring properties to non-profit owners in order to help more properties remain in RHS programs and maintain their affordability. HAC also recommends that the Senators investigate the rental assistance programs available in rural areas and extend these to more rural renters.  

  • Single family

    HAC recommends that the Senators improve the Section 504 program which provides grants for single family home repair. Simplifying and making this program’s funds more accessible would help more families stay in their homes and preserve single family homeownership. 

  • Capacity building

    Many communities have the willingness and desire to help improve their housing opportunities but lack the technical skill or capacity to accomplish their goals. HAC recommends authorizing capacity building programs that would help communities develop the tools they need to thrive. 

  • RHS staffing and operations

    HAC recommends improving the workflow within RHS and updating the technology the RHS staff uses to increase efficiency and help RHS better serve rural communities.  

Read HAC’s Comments

HAC Comments on RHS Reforms
Policy News from the Administration

HAC CEO Statement on Biden-Harris Housing Supply Action Plan

by David Lipsetz

The Biden-Harris Administration released a Housing Supply Action Plan on May 16 that can bring the cost of housing back in line with families’ incomes. This is particularly important in small towns where incomes remain stubbornly low, while the cost of buying or renting a place to live is soaring. The Housing Assistance Council (HAC) applauds the Administration for designing and including several provisions specifically with rural markets in mind.

The Plan includes administrative and legislative proposals to improve existing housing finance mechanisms. It establishes new housing production programs. It calls for changes to the Low-Income Housing Tax Credit that will attract private investment in affordable rental housing. It provides grants—such as the HOME Investment Partnerships Program—to states, cities and towns to do what locals know will be best for their local housing market.  It calls on Congress to establish a Housing Supply Fund and incentivize zoning reform to accelerate the building of more housing across the Nation.

Critically, the Administration proposes reforms that prioritize homeowners living in the homes that they own. This is a welcome change for rural Americans who need high-quality affordable homes in which to live far more than they need high-priced vacation homes. For rental housing, the Administration focuses investment on small-scale 2–4-unit buildings instead of high-rise apartment complexes. It calls for new rentals where few are being built and recognizes the urgency of preserving affordable rentals that already exist. And for the first time in decades, an Administration released a housing plan that calls for improved financing for manufactured housing, an important resource in rural places.

The shortage of affordable housing in rural America is a serious issue. Rental units are being lost at an alarming rate. Single-family homes are significantly older than elsewhere in the Nation. The Administration’s framework recognizes the unique need for affordable housing and proposes solutions built to work in small town and rural America.

Many of the Administration’s actions just announced reflect HAC’s policy priorities. But it remains critical that these actions be complemented by initiatives to address another essential factor in improving housing for rural Americans—building the capacity of local organizations to improve their own communities. Because rural places often have small and part-time local governments, they often find it particularly difficult to navigate the complexities of federal programs and modern housing finance, and to compete for government resources. Philanthropy has not stepped in to address this inequity built into our systems, instead concentrating its resources in already-prosperous high-cost regions. Targeted capacity building through federal investments in training and technical assistance is how most local organizations build skills, tap information, and gain the wherewithal to do what they know needs to be done.

Rural communities hold vast potential to drive economic growth and improve the quality of life for all Americans. Access to quality, affordable housing is key to jumpstarting that potential. Building and preserving homes creates jobs, improves education and health outcomes, and provides much-needed financial and physical stability to families in need. We look forward to working with the Biden-Harris Administration and Congress to ensure that these initiatives move us closer to the day when every American has access to a safe, decent, and affordable place to call home.