On May 18, 2023, the House Agriculture Appropriations Subcommittee approved a fiscal year 2024 funding bill for USDA, proposing to fund many rural housing programs at levels lower than those requested in the administration’s budget, and in some cases lower than the amounts appropriated in FY23 or FY22.

The full House Appropriations Committee scheduled its own mark-up for May 24, then postponed it without setting a new date.

The administration’s budget documents state that its $1.65 billion request for Section 521 would renew all current Rental Assistance contracts, including 27,000 contracts added by the American Rescue Plan Act. The subcommittee’s summary says its $1.607 billion “fully funds existing rental contracts to ensure rural residents will not be displaced,” but does not specifically mention the ARPA units and does not explain the discrepancy between its figure and the budget’s. The administration’s total also includes $6 million for RA in new Section 515 units; that amount is not included in the House bill because it would not provide Section 515 funding for new units.

The House bill would also rescind unspent monies from the American Rescue Plan Act and the Inflation Reduction Act and would prohibit USDA spending on climate-change-related items including energy efficiency.

The Senate has not yet released proposed appropriations bills.

— HAC’s analysis of FY24 appropriations for HUD is available here. As of May 22, 2023, neither the House nor the Senate has proposed HUD funding levels for FY24. —

 

USDA Rural Dev. Prog. (dollars in millions)	FY22 Final Approp.	FY23 Final Approp.	FY24 Admin. Budget	FY24 House Subcommittee Bill
502 Single Fam. Direct	$1,250	$1,250	$1,500	$900
Nat. Amer. SF Demo.	—	7.5	12	5
502 Single Family Guar.	30,000	30,000	30,000	30,000
504 VLI Repair Loans	28	28	50	25
504 VLI Repair Grants	32	32	40	**
515 Rental Hsg. Direct Lns.	50	70	200	60
514 Farm Labor Hsg. Lns.	28	20	50	***
516 Farm Labor Hsg. Grts.	10	10	18	***
521 Rental Assistance	1,450	1,488	1,650	1,607
523 Self-Help TA	32	32	40	25
533 Hsg. Prsrv. Grants	16	16	30	**
538 Rental Hsg. Guar.	250	400	400	400
Rental Prsrv. Demo. (MPR)	34	36	75	34
542 Rural Hsg. Vouchers	45	48	38	48
Rental Prsrv. TA	2	2	0	0
Community Facil. Loans	2,800	2,800	2,800	2,800
Community Facil. Grants	40	25.3*	87	****
Tribal Colleges CF Grts	10	10	10	6
Rural Cmnty. Dev’t Init.	6	6	22.8	5
Rural Hospital Pilot	–	–	2	0
Community Facil. Guarantees	650	650	650	650

* An additional $325.5 million in FY23 CF grant funds will be used for “Congressionally Directed Spending” (earmarks). Specific projects are catalogued in the explanatory statement for the final bill.

** The proposed amounts for Section 504 grants and Section 533 grants total $35 million. After the House Appropriations Committee passes the bill and releases a report on it, the report will specify how that total will be divided.

*** The proposed amounts for Section 514 loans and Section 516 grants will be specified in the House committee report.

**** The proposed amount for non-earmarked Community Facilities grants will be specified in the House committee report. The subcommittee’s bill includes $313 million for “Community Project Funding” (earmarks).

White House Budget Requests Increases in Rural Housing Funding

March 13, 2023 — The White House’s detailed budget request for fiscal year 2024 would increase funding for almost all of USDA’s rural housing and community facilities programs.

View a recording or the slides from HAC’s webinar on Rural Housing in the Fiscal Year 2024 White House Budget, which examined the budget’s contents and what to expect over the coming months.

Initiatives Requiring Legislation

The budget proposes legislative changes for Section 502 direct homeownership loans and for multifamily housing preservation.

For the Section 502 direct program, subsidy “recapture” would be eliminated. Recapture requires that, when a low- or very low-income homeowner with a Section 502 loan sells the house or moves, they must repay the subsidy amounts they have received over the life of the loan. The administration estimates that eliminating this penalty for current borrowers would cost USDA $996 million. It also proposes that Section 502 direct loans made in 2024 will not to be subject to recapture.

Like last year’s budget, the FY24 request proposes to provide HUD vouchers rather than USDA vouchers for tenants who lose Section 521 Rental Assistance when the USDA Section 515 or 514 mortgage ends for the property where they live. The HUD budget includes $20 million for these vouchers. USDA also again asks Congress to “decouple” RA from USDA mortgages so that some tenants can continue to receive RA after their properties’ mortgages end.

Funding Requests

The budget’s proposed $1.65 billion for Section 521 Rental Assistance would enable USDA to renew all of its RA contracts, including 27,000 contracts added by the American Rescue Plan Act.

The $200 million funding level for Section 515 is intended to provide enough for some new construction as well as preservation of existing properties. The Section 521 request includes $6 million to provide RA for the new Section 515 units.

The Rural Community Development Initiative, which funds capacity building for local organizations, would receive more than three times as much funding in FY24 as in FY23. The budget requests a leap from $6 million to $22.8 million, without explaining a particular reason for the increase. (RCDI is a setaside within the community facilities grants program but is not limited to recipients of CF funds.)

The budget asks Congress to authorize foreclosure authority for USDA RD’s multifamily office that would be equivalent to HUD’s.

All housing construction or rehabilitation would be required to improve energy or water efficiency, or address climate resilience.