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Blog Budget Farmworker Housing Legislation Resources Section 515 Self-Help Spotlight

Notice of Annual Business Meeting November 15, 2021 at 2PM EST

NATIONAL-RURAL-HOUSING-COALITION

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Blog Budget Key Issues Legislation Spotlight

Congratulations President Biden and Vice President Harris

TO: President-elect Biden and Vice President-elect Harris.  Congratulations on your victory.  As you take office, we urge you to address the pressing need for decent housing in rural America

 A recent Wall Street Journal article noted, “Fewer homes are being built per household than almost any other time in US history, and it is even worse in rural areas.” As a result, in some rural communities, economic growth is impeded not by the lack of jobs but by the lack of housing for workers.[1]   Some 1.5 million occupied rural units are substandard, more than 30% lack running water and the situation is even worse in Native Communities. .  According to the most recent National Agricultural Workers Survey, 33% of all farmworkers and 45% of migrant farmworkers live in crowded dwellings.[2] 

Here are six things you can do to improve housing in our nation’s small towns and farming communities:

Double Direct Homeownership Loans for Low-Income Families to $2 billion:   this will provide almost 15,000 home mortgage loans to low-income families, including 6,000 very low-income families.

Increase Mutual and Self Help Housing to $75   million:  Mutual Self-Help Housing is the only federal program that combines “sweat equity” homeownership opportunities with technical assistance and affordable loans for America’s rural families. This funding will provide some 6000 low-income families the opportunity to build their own home.

Provide $1 billion to preserve existing rental housing in and revitalize new construction of rental housing in rural America. This will address the documented need to preserve the existing USDA housing portfolio as well as address the pressing new for new affordable rental housing in rural America.

Provide appropriations for rental assistance for low income families  An estimated 18.5 percent of residents — 72,000 households — of USDA rental housing do not receive rental assistance from USDA, HUD or state sources.  All are low income with annual income of only $13,500; the vast majority pays more than 30% of income for rent.  The approximate cost for this increase totals $350 million; 

Improve Housing Conditions for Agriculture Workers: Provide $60 million in section 514 loans and $20 million in section 516 grants.  Section 514 and 516 are the only federal programs that provide affordable loans and grants. There are approximately 3 million migrant and seasonal farmworkers in the United States.  According to the most recent National Agricultural Workers Survey, 33% of all farmworkers and 45% of migrant farmworkers live in crowded dwellings[3]. Moreover, farmworkers and their families also suffer from poverty.  61% of farmworkers earn incomes below the poverty line.

Increase Financing for Rural Water and Waste Water Facilities: By providing $3 billion in loans and $1.6 billion in grants for financing for water and waste water facilities in small communities will address the backlog of applications on hand at USDA and finance close to 1,000 facilities that will improve water quality and waste disposal in small towns and farming communities across rural America.

Congratulations and best wishes

Bob Rapoza

NRHC


[1] Raice, Shayndi. “Rural America Has Jobs. Now It Just Needs Housing.” Wall Street Journal May 30, 2018. https://www.wsj.com/articles/scarcity-of-housing-in-rural-america-drives-worker-shortage-1527672602

[2] https://www.dol.gov/sites/dolgov/files/ETA/naws/pdfs/NAWS_Research_Report_13.pdf

[3] “National Agricultural Workers Survey.” January 2018. https://www.dol.gov/sites/dolgov/files/ETA/naws/pdfs/NAWS_Research_Report_13.pdf

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Blog Budget Legislation

Year End Wrap-Up

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Dec 21, 2020

The House just released the FY 21 Omnibus Appropriations/ COVID relief bill. The bill is more than 5000 pages long.  The COVID package did not include any funding for rural development.

FY 21 Highlights

The House and Senate Agriculture Bills were relatively close in appropriations recommendations and the conference agreement reflects that.  One of the few areas of disagreement was rental assistance and vouchers.  The House included the total for vouchers in the rental assistance account, as proposed by USDA.  The Senate did not and prevailed in conference.

Most programs continue at the FY 20 level, which, of course, is billions of dollars above the budget agreement. 

See the table below for details

Highlights of the COVID Package

Rental Assistance

The bill provides $25 billion of rental assistance to low income tenants.  It also extends until the end of January 2021 a moratorium on evictions and foreclosures, which Biden administration may extend again. The Treasury Department would be responsible for dispersing the rental assistance to states via a formula based on population. Landlords and building owners can apply on behalf of tenants meeting the eligibility requirements, generally those who make less than 80% of median income in their area, have at least one person in their households who has lost a job and can demonstrate they are at risk of losing their home.

CDFI Fund

  • $ 3 billion in emergency assistance grants to CDFIs;$1.25 billion to be made available within 60 days of enactment; $1.75 billion in CDFI emergency assistance target to low income minority communities;
  • $9 billion in a new CDFI capital investment program targeted to Minority Depository Institutions.

Low Income Housing Tax Credit

  • Establishes a 4% permanent floor on certain LIHTC projects;

New Markets Tax Credit

  • 5 year extension (2021-2025) of NMTC at $5 billion in annual allocation authority.

Final Rural Housing and Development Appropriations for Fiscal Year 2021

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Budget Uncategorized

Shutdown Impacts Rural Housing

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As the budget stalemate in Washington drags on the consequences and impacts are becoming clearer and increasingly disturbing. Without any justification, the Administration has closed 25 percent of the federal government and among the casualties are agencies with the responsibility for financing affordable housing, clean drinking water, and community opportunity.

NRHC members have reported about one small but important agency – the Rural Housing Service – and the recent absence of its housing assistance. Families waiting to close their home mortgages are hung out to dry, families building their homes are stymied, and hundreds of thousands of families receiving rental subsidies may soon lose that assistance if the government shutdown goes on for “months or years.”

Below is a compilation of information supplied by NRHC members on the impact of the shutdown on rural housing efforts in their states and communities.

Section 502 Direct

  • Fahe – working in Appalachia — reports that they are currently holding on 424 loans, across 18 states, in the 502 Direct pipeline that either cannot be submitted to USDA or are sitting idle at USDA.
  • Fahe reports that 15 second mortgages that are operating on a funding timeline tied to 502 Direct loans that are held up now as well.
  • Rural Community Assistance Corporation (RCAC) reports that the organization has already accumulated 15-20 Section 502 home ownership loan applications from the packaging program in Alaska, Colorado, Oregon, and Washington that are awaiting submission.
  • In California, Self-Help Enterprises reports 18 families have been impacted and a total loan obligation of $3.3 million.
  • In Oregon, NeighborWorks Umpqua reports that 7 families are waiting for a loan specialist to issue a Certificate of Eligibility (COE) so they can go shopping.
  • In Oregon, NeighborWorks Umpqua reports that 4 families in contract cannot close their section 502 loans, have their inspections reviewed, or appraisal ordered.
  • In Delaware, Milford Housing Development Corporation (MHDC) reports that the organization has 3 Direct clients under construction that may be paused.
  • In Delaware, MHDC reports on home ownership loans:
    • 1 client at USDA ready to close on their construction loan;
    • 1 client at USDA with contract and leveraged money waiting to be reviewed so they can be approved and close; and
    • 2 clients will have plans and specs submitted soon so they can go to closing.
  • PathStone reports that 2 first time homebuyers, from New York and Pennsylvania respectively, were scheduled to close of 502 mortgages in early January and both deals are now in jeopardy.
  • In Washington, Catholic Charities Housing Services (CCHS) reports a halt to 502 loan underwriting resulting in 2 week delay and counting for a group of 7 families (523 program/502 loans) which impacts CCHS performance measurements on the 523 program.
  • In Utah, Self Help Homes reports 20 Section 502 loan closings are delayed and by the end of January 29 inspections will be needed
  • In Indiana, Pathfinder Homeownership Center reports:
    • 12 homes that are ready to close in January;
    • 6 files that need appraisals and all but one of those are existing;
    • 13 files that are either at the USDA or FAHE
  • In Kentucky, Frontier Housing reports that the organization has 7 Section 502 Direct homebuyers whose loans are on hold because of the shutdown.
    • One homebuyer has a house under contract, and is waiting for RD’s sign-off. If the shutdown drags on too much longer, the buyer runs the risk of the seller walking away from the deal.
  • In New Mexico, Tierra del Sol Housing Corporation reports that 16 families have been delayed in receiving or getting approval for their 502 Loans.
  • In New Mexico, Tierra del Sol Housing Corporation reports construction delays due to lack of mortgage funds for 9 projects with 502 funding.
  • In Missouri, Tierra del Sol Housing Corporation reports that that 3 Section 502 borrowers received letters from Centralized Services Center (CSC) in St. Louis that show their insurance has not been paid and CSC will provide forced insurance coverage if not paid by a specific date to prevent any lapse of coverage on the home financed by RD.
  • In California, Coachella Valley Housing Coalition has heard from 12 families that have had difficulty dealing with Centralized Services Center (CSC) in regards to their insurance that has not been paid, inability to make payments, and reporting tax information.
  • In California, Coachella Valley Housing Coalition has heard from 5 families that were unable to make USDA loan house payments through automated system.
  • In Oklahoma, Deep Fork Community Action Foundation, Inc. reports that 3 applicants are delayed in receiving 502 loans.
  • In Oklahoma, Deep Fork Community Action Foundation, Inc. reports that 5 applicants have construction delays due to lack of funds and 2 from lack of inspectors.
  • NeighborWorks America reports no RHS staff available to discuss coordinating 502 Direct loan packaging trainings, as an example, nor available to design pilots for rural housing rehab.

Single Family Housing Guaranteed Loan Program

  • In Oregon, NeighborWorks Umpqua reports 1 family can’t get the guaranteed commitment issue because USDA is closed
  • Fahe reports that they have 12 Section 502 Guaranteed loans in a holding pattern.

Section 514/516 – Farmlabor Housing

  • In California, Peoples’ Self Help Housing (PSHHC) reports that the first construction billing for one new construction USDA Section 514 project will likely occur in January. If the USDA inspector cannot approve the payment request, then PSHH will be forced to advance payments to the subcontractors to remain on schedule.  The subs payments will be due on February 18, 2019, so it is likely PSHHC could obtain approval prior to that date.
  • In California, PSHHC reports that the organization has 10 new constructions slated to start in February that are now delayed.
  • In California, PSHHC reports that the organization is about to begin working with USDA on a newly completed USDA Section 514 project, to convert the construction loan to permanent financing. If the shutdown continues PSHHC could find itself having to extend the construction loan and paying more fees and interest, simply because USDA cannot finalize 514 loan documents.
  • In Oregon, NeighborWorks Umpqua reports that 1 family is going to return their loan docs to USDA but no one will be there to receive it and there will no funds to start construction.
  • In Washington, Office of Rural Farmworker Housing (ORFH) reports that the organization is awaiting final approval of a relatively minor architectural change on new farm worker housing.

Section 515

  • In Washington, Office of Rural Farmworker Housing (ORFH) reports that the organization cannot close two construction contracts covering the rehabilitation of 515 units because RD staff are not available to sign off on it. Among other impacts is a delay of payment to the contractor.

Self Help Housing

  • In California, Coachella Valley Housing Coalition (CVHC) reports that the organization took a draw before the shutdown for the 80+ houses CVHC has in various stages of construction. However, if the shutdown goes on longer, CVHC may not have the funds to buy the next round of materials and will have to shut down construction for those families.
    • Assuming that USDA will continue to accrue interest on their 502 construction loans so their costs will go up.
  • In California, CVHC reports that the organization has in escrow for 64 lots in the town of Imperial and had families ready to be submitted to USDA for the first group to begin building on those lots. With the closure, CVHC will not be able to qualify those families and close their loans to begin construction.
  • In California, PSHHC reports that the construction starts for 10 families slated to start in February will be delayed.
  • In California, PSHHC will have to advance funds to pay contractors to remain on schedule for completion of 29 self-help homes. The advance could be in excess of $300,000 per the December costs. The advance will likely be extended for at least 30 days if the shutdown ends as scheduled.
  • In Hawaii, Self-Help Housing Corporation of Hawaii (SHHCH) reports that the organization is unable to get 13 loans closed, and start construction with the Pokai Bay Team 4 Project.
  • In Delaware, Milford Housing Development Corporation (MHDC) reports that the organization has 17 homes under construction.
    • 4 of those families are running low on their SH Construction loan funds. MHDC will need to pause their construction.
    • The other families have some money but those funds will dwindle as we then concentrate on those homes with the others paused.
  • In Delaware, MHDC reports that the organization has 3 files at USDA preparing to close but can’t and 6 files at USDA that can’t be reviewed for eligibility if no one is there.
  • In Utah, Mountainlands Community Housing Trust reports that Section 523 Mutual Self Help Housing Grants are not being processed.
  • In Washington, Catholic Charities Housing Services (CCHS) reports that projects involving 5 families have no availability of funding to pay subcontractors for current construction – forcing CCHS to go out of pocket to pay these invoices to help small business owners make payroll.
  • In Washington, CCHS reports no availability of funding for quarterly 523 grant reimbursement which further constrains agency cash flows as CCHS is waiting on reimbursement of expenditures.
  • In Alaska, Rural Alaska Community Action Program reports 10 impacted families.
  • In Kentucky, Frontier Housing reports that the organization has its first self-help build group that is about to start construction, and only 2 of the 5 homebuyers will have USDA financing.  Frontier Housing is weighing whether or not to start construction and retain ownership of all the lots, or wait for USDA to be available to close their loans.  If construction start, and then subsequently In Arkansas, financing, which may include Frontier carrying some of the mortgages ourselves.
  • Little Dixie Community Action Agency reports:
    • In Arkansas, 43 families have been impacted with homes are under construction but payments to contractors and vendors are delayed, USDA certifications are on hold, and certified cannot have surveys ordered due to USDA employees not being available to sign checks or order surveys.
    • In New Mexico, Grantee is waiting on final inspection for 3 participants.
    • In Oklahoma, 10 families have been impacted. Grantee has one family ready for a final inspection, one waiting on loan certification, and four waiting on loan processing in order to close the loan. Grantee has four homes under construction but contractors and vendors payments are delayed due to no USDA employees available to sign checks. Another five certified families are looking for land but surveys cannot be ordered due to no USDA employees available to order them and one application for certification at USDA that cannot move forward.

Rental Assistance

Provides a rental housing subsidy to very low income households, elderly households, and persons with disabilitiesOver 270,000 families receive this assistance from USDA. The last rental assistance payments were made in December 2018.  There is not any information available for January payments.  Without those payments, housing for these families will be in jeopardy.

  • In New York, PathStone reports that rental assistance for farm labor housing will be a major problem later in January if USDA doesn’t come up with a stop gap measure for getting that paid out.
  • In Washington, CCHS reports that if rental assistance is not available, then it will significantly impact the organization’s ability to pay vendors in a timely manner.
  • In California, Self-Help Enterprises reports the organization has 315 units of 514 housing that have rental assistance. A conservative estimate is that the 521 RA payments each month are at least $100,000 in aggregate are at risk.

Home Safety and Maintenance Repair Grants

  • In Kentucky, Housing Development Alliance reports 1 home repair delay for an elderly lady who is line to get a 504 grant because she has no functioning heat system. Her application is on hold so she goes without heat.
  • In Kentucky, Frontier Housing reports that the organization is working with 1 elderly and disabled homeowner whose 504 grant/loan deal is on hold. Her roof leaks, and that has damaged the attic insulation, drywall on the ceiling, and her floors. Frontier is currently looking at what they can do to help at least make her home dry, while she waits for USDA to fund the whole project.
  • In New Mexico, Tierra del Sol Housing Corporation reports that 11 families face delays in receiving or approving Section 504 Loans/Grants

Operation Issues

  • In Hawaii, Self-Help Housing Corporation of Hawaii (SHHCH) reports that if the shutdown lasts more than a month, SHHCH will have to take out an operating loan to make payroll since no Section 523 grant draws will be forthcoming. An extended delay would also impact their ability to attain construction draws; thereby affecting future deliveries of material.
  • In Kentucky, Housing Development Alliance reports the organization was supposed to sell two houses next week. That will not happen now.  That mean two families not only have to wait on their home, but also either convince their landlords to let the stay in the current home a little longer or find temporary housing.
  • In California, Peoples’ Self Help Housing (PSHHC) reports that the organization will not receive 523 grant funds which run about $60,000 per month.
  • In Kentucky, Frontier Housing reports that the organization closed on its 523 grant in mid-December and now has to decide whether to press forward with the self-help program, or wait until Frontier can draw 523 funds. If they go ahead, Frontier risks incurring staff and admin costs without being able to draw on the 523 grant.
  • In California, Self-Help Enterprises is depending on a 523 Grant draw of approximately $200,000 for February.
  • In Oklahoma, Deep Fork Community Action Foundation, Inc. reports they are not able to get checks signed to pay contractors or to order draws for the Homeowners before the Gov’t shut down.
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Blog Budget

Dear Colleague: Support Adequate Funding for USDA Rural Housing Service in the FY19 Budget

Congressmen Sean Duffy (R-WI) and Jim Costa (D-CA) are leading a Dear Colleague in support of USDA Rural Housing programs. Below, find the letter.


Support Adequate Funding for USDA Rural Housing Service in the FY19 Budget
DEADLINE: March 12, 2018

Dear Colleague,
Please join Representatives Sean Duffy and Jim Costa in sending the following letter to the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies to respectfully request adequate funding for United States Department of Agriculture (USDA) Rural Housing and water sewer programs.

USDA Rural Housing programs provide a critical lifeline to low-income, rural families. Through low-cost loans, grants, and other assistance, USDA programs improve housing conditions and quality of life in rural America.

For example Section 502 Direct Loan Program, which has helped more than 2.1 million families realize the American Dream and build their wealth by more than $40 billion, is the only federal homeownership program that exclusively targets low- and very-low income rural families. The program provides essential funding to fill in the gap in the private market, allowing families who would otherwise be unable to access affordable mortgage credit achieve homeownership.

The Section 523 Mutual Self-Help Housing program is another critical component of USDA’s Rural Housing initiatives. Self-Help Housing, which celebrated its 50 year anniversary and 50,000th family served in 2015, is the only federal program that combines “sweat equity” homeownership opportunities with technical assistance and affordable loans for some of America’s neediest rural families.

Rural water –sewer loans and grants are essential for building communities.

Our rural communities are in dire need of affordable, livable housing. Please join us in supporting rural districts all over the country by signing this letter.
Please contact Ryan McCormack in Rep. Duffy’s office (Ryan.McCormack@mail.house.gov) or Ben Goldeen in Rep. Costa’s office (Ben.Goldeen@mail.house.gov) if you would like to sign or have further questions.

Support Adequate Funding for USDA Rural Housing Service in the FY19 Budget
Sending Office: Honorable Sean P. Duffy
Sent By: Ryan.McCormack@mail.house.gov

Support Adequate Funding for USDA Rural Housing Service in the FY19 Budget

DEADLINE: March 12, 2018

Dear Colleague,

Please join Representatives Sean Duffy and Jim Costa in sending the following letter to the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies to respectfully request adequate funding for United States Department of Agriculture (USDA) Rural Housing and water sewer programs.

USDA Rural Housing programs provide a critical lifeline to low-income, rural families. Through low-cost loans, grants, and other assistance, USDA programs improve housing conditions and quality of life in rural America.

For example Section 502 Direct Loan Program, which has helped more than 2.1 million families realize the American Dream and build their wealth by more than $40 billion, is the only federal homeownership program that exclusively targets low- and very-low income rural families. The program provides essential funding to fill in the gap in the private market, allowing families who would otherwise be unable to access affordable mortgage credit achieve homeownership.

The Section 523 Mutual Self-Help Housing program is another critical component of USDA’s Rural Housing initiatives. Self-Help Housing, which celebrated its 50 year anniversary and 50,000th family served in 2015, is the only federal program that combines “sweat equity” homeownership opportunities with technical assistance and affordable loans for some of America’s neediest rural families.

Rural water –sewer loans and grants are essential for building communities.

Our rural communities are in dire need of affordable, livable housing. Please join us in supporting rural districts all over the country by signing this letter.

Please contact Ryan McCormack in Rep. Duffy’s office (Ryan.McCormack@mail.house.gov) or Ben Goldeen in Rep. Costa’s office (Ben.Goldeen@mail.house.gov) if you would like to sign or have further questions.

_______________________________________________________________________
Dear Chairman Aderholt and Ranking Member Bishop:

As the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies considers the Fiscal Year 2019 (FY 19) Appropriations Bill, we write to respectfully request adequate funding for United States Department of Agriculture (USDA) Rural Housing Programs and Rural Water-Sewer program.

Access to safe, decent, and affordable housing can transform lives. Yet, due to lower incomes and higher poverty rates, far too many rural families live in housing that is too expensive, in substandard condition, or both. According to U.S. Census data, approximately, 1.5 million rural homes—or about 5.9 percent—are in substandard condition. The poverty rate for rural areas, estimated at 18.1 percent according to the Economic Research Service, is both higher and more concentrated than the urban (15.1 percent) and national (15.5 percent) poverty rates. Overall, 82 percent of high-poverty counties—or 571 of the 703 counties with at least a 20 percent poverty rate—are rural. And, 86 percent of the nation’s “persistently poor” counties are rural, as well.

Additionally, 30 percent of rural families (more than 8 million) spend more than 30 percent of their monthly gross income on housing. These households are considered “cost burdened,” and are likely to struggle to pay for other basic needs, such as health care and child care.
USDA Rural Housing homeownership and rental housing programs have a proven track record of overcoming these barriers to affordable housing in rural America. By providing low-cost loans, grants, and other related assistance, these key programs have not only helped millions of rural families improve their quality of life, but have created thousands of jobs in rural America. In 2017, RHS assisted over 130,000 rural families in improving their housing conditions through home ownership loans, home repair loans and grants and rental and farmworker housing programs and provided over 468,000 units of affordable, safe rental housing.

The 2013 Drinking Water Needs Assessment indicated a national need of $64.5 billion for small systems[3] (systems that serve 3,300 or fewer persons) in the 50 states, Puerto Rico and other U.S. Territories. This represents 17.4 percent of total national need and comprises some 41,000 systems (82.8 percent of all systems) and 24 percent of the population. The need of water systems in American Indians and Alaska Native villages totals $3.3 billion.

USDA’s Water and Sewer loan and grant financing program is a key component of economic development in rural America. Every water and wastewater construction dollar generates nearly $15 of private investment and adds $14 to the local property tax base. The agency boasts a portfolio of more than 18,000 active water/sewer loans, more than 19 million rural residents served, and a delinquency rate of just 0.18 percent.[1] Fiscal Year 2017, USDA funded 736 projects serving 2.3 million people in small rural communities of 10,000 people or less.

We urge the Subcommittee to support the Mutual Self-Help Program, Section 502 Direct Loans homeownership loans, rental assistance, new multi-family construction and preservation, farmworker housing as well as water sewer financing. All provide critical support to rural populations, improve rural communities and create jobs.

Sincerely,

Sean Duffy and Jim Costa.

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Blog Budget

FY 2019 Appropriations Request Forms

Below are appropriations request forms for FY 2019:

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Budget Resources

Administration Releases Third Supplemental Emergency Funding Request

Friday, November 17, 2017, the Administration released the third supplemental emergency funding request in response to Hurricanes Harvey, Irma, and Maria, as well as the California wildfires. The White House is requesting an additional $44 billion in Fiscal Year (FY) 2018 for states impacted by the storms and fires, in addition to Federal property repairs.

The Administration’s request letter, submitted by Office of Management and Budget Director Mick Mulvaney, identifies five programs/activities to fund. Those programs are traditional disaster relief provided by the Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA); emergency agricultural assistance; educational recovery fund; funding to repair or replace damaged Federal property and equipment; and the Community Development Block Grant Disaster Recovery program, focused on flood mitigation projects. The Administration does not make a request on funding for any programs administered by the U.S. Department of Agriculture (USDA).

 

Program Request
FEMA and SBA $  25,200,000,000.00
Emergency Agriculture Assistance $     1,000,000,000.00
Education Recovery Fund $     1,200,000,000.00
Repair and Rehabilitation of Damaged Federal Property/Equipment $     4,600,000,000.00
CDBG – Disaster $  12,000,000,000.00
Total $  44,000,000,000.00

 

The Administration also requests tax relief for families in areas impacted by the wildfires in California, including non-itemized deductions for casualty losses; waiving the current-law requirement that losses exceed 10 percent of adjusted gross income; penalty-free access to retirement funds; disaster-related employment relief; earned income tax credit reporting-year flexibility; and enhancement of charitable giving incentives. These provisions are similar to the tax relief provided in Public Law 115-63, the Disaster Tax Relief and Airport and Airway Extension Act of 2017, to the areas impacted by Hurricanes Harvey, Irma, and Maria.

The letter also includes several other requests from the Administration, including the need to reauthorize and reform the National Flood Insurance Program (NFIP), suggestions of offsets, a recommendation to extend the non-defense Joint Committee mandatory sequestration resulting from the 2011 Budget Control Act (BCA), pursuant to Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985; and additional funding for the Department of Defense (including $4 billion for missile defeat and defense enhancements to counter the threat from North Korea and $1.2 billion in support of the Administration’s South Asia strategy, as well as $1.6 billion for the boarder wall).

In a separate document, the Administration outlined their suggested offsets, which total $59 billion and would largely come from extending the sequester. Many of the proposed offsets are reiterations of eliminations or reductions included in the FY 2018 budget request – which Congress has already largely rejected. Those offsets include $196 million for Rural Economic Development Grants; $25 million for direct and guaranteed business and industry loans and rural business development grants; $8 million for the Rural Energy Savings Program; and $800 million for the Special Supplemental Nutrition Program for Women, Infants, and Children.

Members of Congress are already sounding off on this request. Senate Majority Whip John Cornyn (R-TX) has called the request “wholly inadequate.” Representative John Culberson (R-TX-7), a senior House appropriator, is quoted saying that this request “would sabotage what has been an incredible response by President Trump to Hurricane Harvey up to this point,” and that this request “falls severely short of the bare minimum needed to continue repairing the damage of Hurricane Harvey in Texas in every aspect. OMB’s response to the largest housing disaster, in terms of volume and dollar amount, would be laughable if it wasn’t so serious.” In October, Cornyn and Culberson signed on to the $61 billion request submitted by Texas Governor Greg Abbott for Texas relief funding.

Puerto Rico’s advocates on the Hill, including Representative Nydia Velazquez (D-NY-7), similarly state that this request would “hinder the Puerto Rican government’s capacity to address the situation on the ground.”

Congress has already provided $51.75 billion for disaster recovery since September (P.L. 115-56 and P.L. 115-72). In the case of both of the previous supplemental requests from the Administration, Congress provided additional funding over the requested amount. It is expected that they will do the same in this instance. Congress will likely take up the supplemental after they return from the Thanksgiving recess. We will keep you posted as things move forward.

Categories
Budget Key Issues

What Happened on the Way to the Trump Budget for Rural Development — The Story So Far

The drumbeat for a dramatic re-ordering of federal rural development policy came with the release of the Trump Administration’s so-called “Skinny Budget” for Fiscal Year (FY) 2018 in March. “Skinny” because it was short on details, the first budget of the Trump era proposed a $54 billion reduction in domestic discretionary spending with an increase of the same amount for the Pentagon. It also proposed a $30 billion increase in defense for the current fiscal year (2017), financed in part by unspecified reductions totaling $18 billion from domestic programs.

For the U.S. Department of Agriculture (USDA), a 21 percent, or $5 billion reduction was offered that included elimination of rural water/wastewater loans and grants (so much for infrastructure financing), elimination of the Rural Business-Cooperative Service and its programs,  and a big reduction ( 50 percent) in Rural Development staffing.

In early May, Congress ignored most of the Trump budget request and approved the Fiscal Year 2017 appropriations bill, which included increases in direct homeownership loans, Mutual Self-Help Housing grants, and rental housing programs. Congress provided the White House some of the defense money, but nowhere near the budget request and did not cut domestic programs.

On May 23, the White House rolled out its full blown FY 2018 budget. The budget proposed a 37 percent reduction in community development programs at Department of Housing and Urban Development (HUD), Commerce, and USDA.

The budget included elimination of 24 different rural development programs. Overall in terms of Budget Authority (BA) rural development was cut by $867 million or 31 percent. Rural Business programs and the Rural Business and Cooperative Service were eliminated.  Rural Utility programs fell from $8 billion to $6.2 billion, principally due to the elimination of about in rural water-sewer loans ($1 billion) and grants ($480 million).  BA for housing programs dropped from $1.6 billion to $1.36 billion.

Virtually every direct rural housing loan and grant program, including Section 502 Direct, Section 504 loan and grants, Section 523 Mutual Self-Help Grants, Section 515, and Section 514/516 Farmworker Housing Loans and Grants, were zeroed out in the budget. Section 521 Rental Assistance, while not eliminated, was funded at $1.345 billion – a $60 million dollar decrease from the FY 2017 rate. Left in the wake of these proposals was a few million more here or there for loan guarantees for multifamily housing and a small increase in community facility lending.

While all this was going on, on May 11 USDA announced plans for a proposed reorganization that established an Under Secretary for Trade and Foreign Agriculture Affairs and eliminated the Under Secretary for Rural Development. The proposal stated that by eliminating the Undersecretary for Rural Development position, it would “elevate” Rural Development, claiming that the Secretary will take a direct hand in Rural Development. This implausible claim came against the backdrop of the drastic funding cuts included in the Budget request.

In response, on June 11 the National Rural Housing Coalition (NRHC) released a letter to Congress signed by nearly 600 organizations opposing the Administration’s proposal to eliminate the Under Secretary for Rural Development at USDA. The letter protested the draconian cuts to rural development programs in the FY 2018 Budget request that would severely impact people from economically distressed rural communities. Signatures came from organizations located all around the country, and included community development organizations; nonprofit housing developers; state and national trade associations; farmer and agriculture cooperatives; affordable housing organizations; city governments; universities; and tribal governments.

With the stage set and NRHC at the forefront, the House and Senate Appropriations Committees began consideration of their FY 2018 Agriculture bills.  Even without serious consideration of the Trump budget, FY 2018 money is tight.  The caps on spending mandated by the Budget Control Act forced domestic discretionary down by about $3 billion and for good measure the House Budget Committee set the total available at $4 billion below that.

The House Appropriations Committee acted first, reporting out a bill almost $900 below the FY 2017 level, including a $350 million cut to rural development. That said, the House Agriculture Appropriations bill (H.R. 3268) did not approve any of the eliminations proposed by the Trump Administration. Some rural development programs were trimmed, but the programs and the authorities that have served rural America for some 50 years remain in place in the House Bill.

The House did follow the budget on two points. First it did not fund the Office of the Undersecretary for Rural Development. Instead the bill included about the same amount of money provided in FY 2017 for the Office of the Undersecretary for Rural Development for the Assistant to the Secretary for Rural Development.  This led some to wonder:  Is this reorganization proposal is a distinction without a difference?

The House bill also recommended a new grant program: the Rural Economic Infrastructure Account (REIG), which was also included in the Budget request. The REIG account pools together several existing USDA rural development grant programs into one grant program. The pooled grant programs are grants for low-income housing repair and rural housing preservation (Section 504 grants and Section 533 Housing Preservation Grant (HPG)), rural community facilities grants (including RCDI), grants for telemedicine distance learning, and grants for broadband. Any funds appropriated to those accounts would be transferred to the REIG Account, if enacted, and none of these programs received funding outside of the REIG program in the House bill.

The House bill funded this account at $122 million, with $60 million set aside for Appalachian communities. Each eligible activity under the account must receive at least 15 percent of the total provided under the Account, which, if funded at the requested level equals around $18.403 million, meaning all of the programs within the Account could face a significant decrease. For example, in FY 2017 Section 504 grants and HPG were funded together as “Rural Housing Assistance Grants” at $33.701 million.

This consolidation hits very-low income people very hard. USDA’s Section 504 Loan and Grant program and the HPG program are vital to many rural residents, particularly the elderly, who lack alternative financial resources to make basis repairs the preserve their homes. A disproportionate amount of the nation’s occupied substandard housing is located in rural areas.  Most of the people affected are the poorest of the poor or the elderly, and they usually live in rural areas with incomes below the federal poverty level. Non-metro tracts are more than two times as likely to lack or have incomplete plumbing compared to metro tracts. This issue is particularly prevalent in counties that contain American Indian Reservations, and Tribal census tracts are five times more likely to lack or have incomplete plumbing when compared to metro tracts.

The Senate Appropriations Committee took a better approach to domestic discretionary spending and rural development appropriations. The Committee did not cut into domestic discretionary totals, leaving the amount available at the same level as FY 2017. As a result, the amount available to the Agriculture Bill (S. 1603) was the only about $350 million below a freeze.

This gave the Committee the fiscal space to put together a bill that set most rural development programs at the FY 2017 rate. The Senate bill is $4.2 billion above the budget request for rural development programs. This includes $1 billion above the budget request for Section 502 direct loans; $57.5 million in BA and grants for Mutual Self-Help Housing (+$30 million); additional funding for Multifamily Revitalization and $550 million for water-sewer.  The Committee bill does not include the Rural Economic Infrastructure proposal – thereby freeing up funding for Section 504 grants, HPG and RCDI. The Rural Business Service and its programs are continued at the FY 2017 rate.

On the matter of the USDA Rural Development Reorganization, the Senate bill provides funding for the Assistant to the Secretary for Rural Development. However, the Committee also approved an amendment sponsored by Sen. Jon Tester (D-MT) that restored funding for the Office of Undersecretary and amended the Agriculture Department Reorganization Act to require the Secretary to nominate an Under Secretary for Rural Development who would be confirmed by Congress. The FY 2018 Agriculture Bill was reported to the Senate floor with a unanimous vote.

As we prepare this report, the House of Representatives is poised to leave Washington on Friday, July 28 for the August recess. The Senate will continue to be in session for a week or two more.  Nowhere on any schedule is floor consideration of the FY 2018 Agriculture Bill.

When Members of Congress return in September, they will immediately face decisions on the debt limit, FY 2018 spending, budget reconciliation, tax reform and, possibly heath care. Congress may not take up final decisions on FY2018 bills until the late fall.

Washington has never been more uncertain but it appears that when Congressional conference committees meet to resolve differences, the choices between the House and Senate Ag bills will be relatively narrow and nothing remotely resembling the Trump Budget.

Categories
Budget Key Issues Resources

Nearly 600 Rural Organizations Signify Opposition to White House Proposal for USDA Reorganization and Budget Request in Advance of Congressional Hearing

Rural Organizations from across the country wrote to Congress, voicing opposition to the Administration’s proposal to eliminate the Under Secretary for Rural Development and funding for rural development programs.

Washington, D.C.—June 12, 2017— Today, nearly 600 organizations sent a letter to Congress opposing the Administration’s proposal to eliminate the Under Secretary for Rural Development at the U.S. Department of Agriculture (USDA). The letter also lamented draconian cuts to rural development programs in the Fiscal Year (FY) 2018 Budget request that would severely impact people from economically distressed rural communities. Signatures came from organizations located all around the country, and included community development organizations; nonprofit housing developers; state and national trade associations; farmer and agriculture cooperatives; affordable housing organizations; city governments; universities; and tribal governments.

“Rural Development has a proven track record of success in providing targeted support in the form of technical assistance grants and direct financial assistance to America’s hardworking rural families,” said Bob Rapoza, executive secretary of the National Rural Housing Coalition. “Even so, rural Americans still face significant challenges to economic prosperity.”

Rural communities have higher poverty rates and higher rates of unemployment when compared to big cities and suburbs. The families living in these areas also face higher incidences of substandard housing and rent overburden. In addition, over 90 percent of the water systems with a violation of the Safe Drinking Water Act are small systems with 3,300 or fewer users.

The FY 2018 Budget request included substantial cuts – or complete eliminations – to almost all of the programs within the Rural Development mission area. Overall in terms of Budget Authority current Rural Development programs is cut buy $867 million or 31 percent. Specifically, the Rural Business programs and the Rural Business and Cooperative Service, as well as Rural Water and Wastewater Loans and Grants are completely eliminated. In addition, virtually every direct loan or grant program under the Rural Housing Service, including the Mutual Self-Help Housing program, the Section 502 Direct loan program, and the Section 515 Multifamily Housing Loan program, are eliminated as well.

The USDA reorganization plan, announced in early May, would eliminate the Under Secretary for Rural Development – the only subcabinet position focused exclusively on assisting low-income rural and farming communities. The proposal claims that this elimination will “elevate” the Rural Development mission area by reporting directly to the USDA Secretary, however the Administration’s FY 2018 Budget request suggests otherwise.

“By eliminating the Under Secretary for Rural Development and eliminating funding for two dozen housing and rural development programs and rescissions for Fiscal Year 2017 as well—the Administration is clearly turning its back on rural families and the communities where they live,” Rapoza said.

“If the Budget request is approved and the reorganization proposal moves forward rural communities will not receive the quality of assistance and resources needed to prosper,” Rapoza said. “This letter sends a message to Members of Congress that if they intend to meet rural communities’ needs, a strong Rural Development mission area is required.”

The letter was circulated by the National Rural Housing Coalition and the National Sustainable Agriculture Coalition. It has been shared with the House and Senate Agriculture Appropriations Committees.

For more information about rural housing and community development, please visit the National Rural Housing Coalition’s webpage.

To view the Press Release on PR Newswire, please click here.

Categories
Budget

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 programs that provide much-needed access to affordable rental housing. Today, approximately 416,000 rural seniors, people with disabilities, and low-income families—earning just $13,600 each year on average—live in rental housing financed with USDA Section 515 Rural Rental Housing Loans. The letter recommends funding the Section 515 program at $40 million for FY 2018, as included in S. 2956.

S. 2956 also included several other notable changes to the Section 515 program that are designed to develop solutions to address the issues created by maturing 515 mortgages. The provisions direct the Secretary to implement provisions and provide incentives to facilitate the transfer of USDA multifamily properties to nonprofit organization and public housing authorities. The Senate bill further recommends a new pilot program for grants to qualified non-profit organizations and public housing authorities to provide technical assistance to USDA multifamily housing borrowers to facilitate the acquisition of RHS multifamily properties by non-profit housing organizations and public housing authorities. The letter recommends the inclusion of these provisions for FY 2018.

The Section 514 and 516 Farm Labor Housing Loan and Grant programs provide critical low-cost loans and grants to help build, improve, and preserve affordable housing for America’s farmworkers, who suffer from extremely high levels of poverty and who frequently live in substandard, crowded conditions. The letter requests funding for the Farm Labor Housing programs at $8.4 million for Section 516 grants and $23.8 million for Section 514 loans for FY 2018 – these levels were included in both H.R. 5054 and S. 2956, and are consistent with the funding levels in past years.

Finally, USDA’s Water and Wastewater programs also provide critical resources to rural communities with severely limited access to a clean and affordable water supply. Communities along the U.S./Mexico border, on Native American lands, and in the Appalachian region are at an especially high risk of water insecurity, as are communities with a high number of farm workers. Without access to USDA’s Water and Wastewater loans and grants, rural communities are often unable to meet the basic health and development needs of its residents. In recognition of this great need, the letter recommends $546 million for water-waste water loans and grants, as included in S. 2956.

To read the letter and see the list of signers, please click here for the letter to the Senate Appropriations Committee and Agriculture Subcommittee Chairmen and Ranking Members, and here for the letter to the House Appropriations Committee and Agriculture Subcommittee Chairmen and Ranking Members.