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Funding for Rural America Matters

  Three hundred seventy-three organizations and 657 individuals have signed onto a letter in support of funding for U.S. Department of Agriculture (USDA) Rural Development (RD) programs that provide essential assistance to America’s rural and small town communities for Fiscal Year (FY) 2018. The FY 2017 House and Senate Agriculture Appropriation Bills, H.R. 5054 and S. 2956 respectively, provided funding for USDA’s Rural Housing Service (RHS) and water and wastewater programs that would allow RD and its nonprofit partner organizations to continue to improve access to affordable and safe housing and community facilities for families in rural America. The sign-on letter asks for the House and Senate Appropriation Committees to support the funding levels included in their FY 2017 bills. Specifically, the letter identifies several program priorities, including the Section 502 Direct Home Loan program, the Section 523 Mutual Self-Help Housing program, Section 515 Rural Rental Housing Loan program, Sections 514 and 516 Farmworker Housing Loan and Grant programs, and the water and wastewater loan and grant programs. The Section 502 Direct Loan program exclusively targets rural families who earn less than 80 percent of the Area Median Income (AMI), and by law, 40 percent of all program funds must be used to help families earning less than 50 percent of AMI. In FY 2016 alone, RHS provided over 7,000 loans and the demand for this program continues to grow. The letter recommends a program level of $1 billion for the Section 502 Direct Loan program. This is the amount provided in H.R. 5054, and a $100 million increase over the FY 2016. The Section 523 Mutual Self-Help Housing program provides grants to qualified organizations to oversee and provide technical assistance to local self-help housing construction projects for low- and very-low income families. The grantees oversee small groups of 6 to 12 families that come together on nights and weekends to build their own homes. In doing so, Self-Help Housing families can reduce construction costs, earn equity in their homes, and build lasting communities. Self-Help Housing encourages self-reliance and hard work, helps families build wealth, stimulates local economies, and is in high demand with over 50,000 families currently on wait lists for the program. This program has a proven record of helping low- and very-low income families achieve homeownership. The letter recommends funding Section 523 at $30 million, which is the level included in H.R. 5054. RHS also includes...
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Spotlight on the FY 2017 House and Senate Agriculture Appropriations Bills

This is a moment in time when avoiding disaster with Congress or the Administration is viewed as a success, and seeking even the most modest improvements in policy or resources seems out of the question and hopelessly optimistic.  In light of these conditions, for those interested in improving housing and communities in rural America, the House (H.R.5054) and Senate (S.2956) Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations bills for Fiscal Year (FY) 2017 are, in separate ways, remarkable. Even though both bills had overall allocations amounts less than the enacted level in FY 2016, the FY 2017 bills reported by the Appropriations Committees of both Chambers increased rural housing and rural development spending above the current FY 2016 levels and well above the FY 2017 USDA Budget request.  Both the House and Senate Appropriations Committees sought to improve rural housing conditions in their Agriculture Appropriations bills for FY 2017, but by different routes. The House Appropriations bill includes $21.3 billion in discretionary funding, over $450 million lower than the FY 2016 enacted level, and $281 million below the Administration’s request for FY 2017.  Of the total, $2.88 billion of the funding is for rural development programs – more than $110 million more than the level enacted in FY 2016.  The House bill includes $24 billion in loan authority for the Section 502 Single Family guarantee program, and $1 billion for the Section 502 direct loan program – an increase of $100 million over the FY 2016 enacted level, as well as the President’s budget request. This is the first increase in direct homeownership loans in several years. The House bill also provides an increased funding for Mutual and Self-Help Housing Technical Assistance Grants – funding the program at $30 million, which is $2.5 million more than the Senate bill and $12 million more than the Administration’s request. [See chart below: “Section 523 Mutual and Self-Help Housing TA”]. The House Agriculture Appropriations Bill also recommends more funding for Farm Labor Housing programs than the Senate bill.  The House bill includes $8.4 million for Section 516 Farm Labor Housing Grants, which is about $60,000 more than the Senate bill.  The House bill recommends a funding level of $23.9 million for Section 514 Farm Labor Housing loans, which is an increase over the Senate bill ($23.857 million), the Administration’s request ($23.857 million) and the enacted amount for FY 2016...
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2016 Omnibus Bill Includes Record Funding For Rural Housing Programs

FOR IMMEDIATE RELEASE    Contact: Bob Rapoza National Rural Housing Coalition Phone: (202) 393-5225   2016 Omnibus Bill Includes Record Funding for Rural Housing Programs WASHINGTON, Dec. 17, 2015 – Yesterday, Congress released the omnibus appropriations bill for fiscal year (FY) 2016. This bill funds several programs, including the Mutual Self-Help Housing Program, Section 521 Rural Rental Assistance, and HOME Investment Partnership Program, above the levels previously included in the House and Senate appropriations bills.  This funding will allow the U.S. Department of Agriculture and U.S. Department of Housing and Urban Development to address the needs of rural communities. “The funding for rural housing programs in this year’s appropriations bill are the highest they have been in recent memory, and at least since the Federal Credit Reform Act of 1992,” said Bob Rapoza, the executive secretary of the National Rural Housing Coalition. “In an era of austerity, partnerships between nonprofit and for-profit organizations, local community governments, and the federal government are essential.” Around 46.2 million Americans live in rural communities, and 8.2 million of them live in poverty. NRHC notes that 2.6 million of those people are children under 18.  Concentrated poverty leads to decreases in affordable standard housing, health conditions, and educational outcomes.  Even though housing in rural communities is generally less costly, because of lower incomes, higher poverty rates, limited housing stock, and limited access to credit, many rural Americans live in inadequate and substandard homes. Programs funded by the omnibus will provide the resources needed to develop and preserve affordable rural housing.  Section 521 Rural Rental Assistance payments are made to owners of USDA Section 515 financed rural multi-family homes to subsidize the rent payments of low- and very-low income tenants, who often have no other housing option. The funding level ensures all current very-low income tenants, including many elderly and persons with disabilities, will continue to have a safe, decent place to live. With the Mutual Self-Help Housing Program, 8 to 12 low- and very-low income family groups build their own homes with technical assistance and supervision from nonprofit housing organizations.  Self-help families put in an average of 1,189.9 labor hours in constructing their homes, while working regular jobs and caring for their children. The President’s budget proposed a significant cut to the Self-Help program, but Congress rejected this reduction. The omnibus will fund the program at the FY2015 level. The HOME Program, funded at $950 million for FY...
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“Spending Turnaround at USDA is Good News for Rural Families”

Bob Rapoza wrote an article on USDA Section 502 spending in FY 2015 that was published by Government Executive today.  In the article, Bob discusses the importance of the home loan program for rural communities, the role that Under Secretary Lisa Mensah played in ensuring the success of the program, and the bipartisan support for the home loan program on the Hill. To read the article, please click here. Bob is the Executive Secretary of the National Rural Housing Coalition and the founder and president of Rapoza Associates, a public interest lobbying and government relations firm in...
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Why HOME Program Funding Matters

There is a substantial need for housing resources across our nation’s small town and farming communities.  Although homeownership is the predominate type of housing available in rural America, rural housing is much more likely to be substandard than in urban areas. In fact, six percent of rural homes are either moderately or severely substandard, often with leaking roofs, or inadequate plumbing or heating systems.  Affordability issues also plague rural communities, with some eight million rural families paying more than 30% of income for housing, and 23% of all rural families paying more than 35% of income for shelter.  To improve the quality and affordability of housing in their communities, local governments and nonprofit groups rely, in part, on HOME Investment Partnership Program (HOME program) funding. Authorized by the Cranston-Gonzalez National Affordable Housing Act of 1990 (PL 101-625), the HOME program was designed to benefit low and very-low income Americans by increasing federal support for affordable housing.  Since its creation in 1990, the HOME program has financed more than 1.1 million affordable homes for low and very-low income households. The HOME program, administered by the United States Department of Housing and Urban Development, provides federal block grants to states, local governments, and consortia, called Participating Jurisdictions or PJs, which use the funding to develop and support affordable housing in their communities.  All PJs are required to provide matching contributions of at least 25% of the HOME funds spent for tenant-based rental assistance, rehabilitation, acquisition, and new construction, although the matching requirement can be reduced for PJs experiencing financial distress or severe financial distress. PJs use HOME grants to support a variety of activities to meet the specific housing needs of their communities.  Some activities include site acquisition, site improvements, demolition, and relocation.  PJs also use HOME funding as a source of critical gap financing to ensure the success so rental housing funded with the Low-Income Housing Tax Credit or other federal, state, or local housing projects.  HOME funds can be used for both permanent and rental housing.   All PJs must commit HOME funds within 24 months of receipt, and they must be expended within five years.  Although there is no set-aside for rural areas under the HOME program, states receive 40 percent of HOME funds each year, which may in turn be used by smaller and rural communities. While most HUD programs have limited utility for rural communities, the structure...
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Senate Appropriations Subcommittee FY16 THUD Bill Drastically Cuts HOME Program

On Tuesday, June 23, the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development (THUD) proposed to fund the HOME Investment Partnerships program (HOME) for FY16 at just $66 million, only 7 percent of the FY15 amount ($900 million).  Such a drastic cut will result in long-term consequences.  While NRHC is aware that the country is facing budget constraints, we implore members of Congress to work together to develop a budget that will restore the HOME program. Authorized in 1990, the HOME program is a locally-driven block grant program that is vitally important to improving the quality of life of rural Americans.  Since 1992, the HOME program has created more than one million affordable homes.  State and local governments have used HOME funds to produce 495,609 home buyer homes, 466,861 rental homes, and 231,928 rehabilitated owner-occupied homes. Additionally, 298,391 families have received tenant-based rental assistance through the HOME program. The HOME program provides grants to state and local governments, which use the funds to directly benefit the low and very-low income families in rural communities across the nation.  HOME funds are used to provide tenant-based rental assistance; housing rehabilitation; assistance to home buyers; and new construction of housing.  For example, the Florida Housing Finance Corporation (FHFC) makes funding available to nonprofit developers, for-profit developers and Community Housing Development Organizations to provide zero interest (3 percent for for-profit developers) through the HOME Homeownership Program.   The Federation of Appalachian Housing Enterprises (FAHE) worked with the city government in Beattyville, Kentucky to construct two affordable rental duplexes utilizing HOME funds.  The duplexes were occupied one month after completion, and rented for $358 per month to families with incomes below 80 percent of AMI.  For more HOME program success stories, please visit our fact page. Continuation of the HOME program is especially crucial now, given the current state of America’s housing.  In the United States, 15.6 percent of all households, were severely housing cost-burdened.  A little more than 13 percent of all rural households are extremely cost burdened, meaning that they spend 50 percent or more of their monthly income on housing costs.  Almost 40 percent of cost burdened rural households are renters. Nearly one-third of rural renters have incomes below the poverty level, and nearly 6 percent of homes in rural communities are considered moderately or severely substandard. If funding for the HOME program is reduced to $66 million in FY 16, compared to the President’s...
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