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. 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.
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. 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.
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
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.
$ 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
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 ($23.855 million). [See charts below: “Farm Labor Housing”]
Farm Labor Housing
The Senate Agriculture appropriations bill recommends a total discretionary funding level of $21.25 billion – $250 million below the FY 2016 enacted level. However the Senate bill appropriates $71 million above the FY 2016 enacted level and almost $100 million above the FY 17 USDA budget for rural housing, business programs and water-waste water loans and grants.
Like the House bill and the Administration’s request, the Senate bill funds the Section 502 Guarantee program at $24 billion for FY 2017; however, unlike the House bill, the Senate does not recommend an increase in funding for Section 502 direct or Mutual and Self-Help Housing over they FY 2016 enacted levels. The Senate bill, instead, focuses more on multifamily housing programs. The Senate (like the Administration and the House) recommends funding Section 521 Rental Assistance at $1,405 billion – an increase of around $16 billion over the FY 2016 enacted amount. [See chart below: “Section 521 Rental Assistance”].
Further, the Senate bill provides increased funding for Section 515, over the FY 2016 enacted amount as well as the House request. Specifically, the Senate bill funds Section 515 rural rental housing at $40 million for FY 2017, which is an increase of five million dollars over the House bill ($35 million), almost seven million dollars over the Administration’s request, and over $11 million more than the enacted level for FY 2016. [See chart below: “Section 515”].
The Senate bill also includes several other notable changes to the Section 515 program in an effort to develop solutions to address the issues created by maturing 515 mortgages. The Senate bill directs the Secretary to implement provisions and provide incentives to facilitate the transfer of USDA multifamily properties to nonprofit organization and public housing authorities, including to allow such entities to earn a Return on Investment and an Asset Management Fee of up to $7,500 per property. The report includes language directing the Secretary of USDA to engage affordable housing advocates, property owners, tenants, and other interested parties, to find long-term solutions to maintaining affordable housing properties in rural America.
The Senate bill further recommends $1 million for 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 Rural Housing Service multifamily properties by non-profit housing organizations and public housing authorities that commit to keeping the properties in the USDA multifamily housing program for a set period of time.
The House recommended better funding levels for home ownership programs and Mutual and Self-Help Housing, while the Senate recommended funding levels are better for rental housing and also include a strategy for addressing maturing mortgages which includes bill language resolving return on investment issues and lack of technical assistance to owners. Both the House and Senate bills are improvements over the FY 2017 USDA Budget.
Congress is unlikely to complete action on appropriations until a lame duck session after the election. When Congress finally does act, the best outcome – and far better than simply avoiding disaster – for rural housing is the House position on Section 502 Direct loans and Section 523 TA grants and the Senate position on Section 515.
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 2016, provides grants to states and local governments. The grantees, who often partner with local nonprofit organizations, use this funding for a variety of housing-related projects such as building, buying, or rehabilitating affordable housing for rental and homeownership purposes. A recent report by the HOME Coalition indicates the program generated $94 billion in local income and 1.5 million jobs nationwide. With the funding level for the HOME Program included in the omnibus, some of the nation’s neediest families will get the support they require.
“It is wonderful to see members of Congress and the President standing up for rural families,” said Rapoza. “NRHC encourages the House and Senate to vote in support of the increased funding for these essential programs for rural communities.”
About the National Rural Housing Coalition NRHC is a national membership organization of non-profit housing organizations, housing developers, state and local officials, and housing advocates. Since 1969, NRHC has promoted and defended the principle that rural people have the right—regardless of income—to a decent, affordable place to live, clean drinking water, and basic community services. For more information, visit www.ruralhousingcoalition.org.
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 of the HOME program allows it to serve as a central tool to improve the quality of housing for rural residents. Because HOME funds can be utilized in many different ways to support a communities’ affordable housing needs, localities and non-profits are able to use HOME programs allocations in conjunction with funding from other sources, such as Section 502 loans from the United States Department of Agriculture (USDA) to adequately fund their projects. Rural Housing programs administered by the USDA has been repeatedly reduced in recent years – between 2010 and 2015, USDA rural housing budget authority was reduced by 54%. Thus, HOME is particularly important for rural areas.
HOME program funding has been used to assist rural communities all around the country. Specific HOME program funded projects include:
In Morehead, Kentucky, single mother Kayla Brooks, with help from Frontier Housing and the HOME program was able to purchase a home for her and her then five-year-old daughter Alanah. Because of the financing package, Ms. Brooks now spends just $140 more on her monthly mortgage than what she paid in rent and utilities.
NCALL Research and the Milford Housing Development Corporation worked together in Middletown, Delaware to help ensure that North Lake Village, a 52-unit rental community that was one of the only sources of affordable housing in town, received the substantial upgrades it desperately needed. Thanks to $1.82 million in HUD HOME funding in conjunction with other sources of funding, North Lake Village’s renovations were completed in 2013. Today residents enjoy improvements including a new exterior, plumbing, electrical, HVAC, and appliances, as well as a new playground, larger laundry facilities, and a computer station.
Up until 2011, Wright, Wyoming, which is the nearest town to many of Wyoming’s coal mines, had no affordable housing whatsoever. Wyoming Community Development Authority (WCDA) utilized HOME funds and the Low Income Housing Tax Credit to develop Wrightland Apartments, which includes 11 two-bedroom units, each with their own garage for the fierce Wyoming winters, exclusively targeted to families who earn less than 50 percent of the Area Median Income.
Unfortunately, the development and continuation of projects like these are currently being threatened by severe cuts to HOME program funding levels.
The past several years have shown a steady decline in HOME program funding. From FY 2009 to FY 2011, funding for the program dropped about 9.5%, from $1,825,000,000 to $1,650,000,000. Since FY 2011, the funding for the HOME program has been further cut – decreasing $650,000,000 from FY 2011 to FY 2012. Although the funding for the HOME program was increased in FY 2013, from $1,000,000,000 to $1,006,120,000, it was reduced to an all-time low for FY 2015, when it was funded at only $900,000,000.
According to a Rural Work Group report, the HOME program in the past provided over $500 million annually in affordable housing and homeownership programs for rural areas. While this amount has decreased in recent years as overall funding to the HOME program has been reduced, this program still provides crucial assistance to some of the country’s communities most in need.
*Estimation is 68% of 40% of the Appropriations Amount (the state allocations), based on the Rural Work Group Report finding that up to 2012 about $500 million of HOME funds annually went to support rural areas.
For FY 2016, the President’s budget request would fund home at $1.06 billion, while the House appropriations would fund the HOME program at $900 million, the FY 2015 rate. The most drastic cut is from the Senate appropriations bill, which would fund the HOME program at only $66 million, which is $834,000,000 less than the FY 2015 amount.
*Estimation is 68% of 40% of the Appropriations Amount (the state allocations), based on the Rural Work Group Report finding that up to 2012 about $500 million of HOME funds annually went to support rural areas. 
As the chart above illustrates, if the HOME program is funded at the Senate appropriations level, rural communities will be able to access less than $18,000,000 to meet their affordable housing needs with the HOME program.
Of HUD’s total budget of approximately $45 billion, less than 15 percent goes to rural areas. The HOME program, funded at the requested level of $1,060,000,000 for FY16 is only a small fraction of HUD’s total budget, but goes a long way to improving the state of housing for rural America. If funding for HOME is not increased, projects such as the ones in Wyoming, Kentucky, and Delaware highlighted above will not be possible, and the residents of rural America will be left without safe and decent affordable housing options.
In light of the fact that a total of 19.3 percent of the population of the United States lives in rural area, fully funding the HOME Program for Fiscal Year 2016 will go a long way to providing crucial resource for America’s rural residents.
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 budget request of $1.06 billion, there would be a loss of an estimated 38,665 affordable housing units and 8,813 families assisted with HOME tenant-based rental assistance. This would equal a loss of:
16,045 units of affordable housing for new home buyers;
15,099 units of newly constructed and rehabilitated affordable rental units;
7,521 units of owner-occupied rehabilitation for low-income homeowners; and
8,813 low-income households assisted with HOME tenant-based rental assistance.
The impact of this severe cut to the HOME program will be felt by communities all across America. The Full Appropriations Committee markup is scheduled for Thursday, June 15, 2015. NRHC urges members of Congress to restore funding to the HOME program.
For general information on the HOME program, please click here.
“Hi, my name is [name] and I am with [organization] and I live/work in your district. I’d like to speak with the Senator’s staffer who handles Agriculture or Housing issues.”
Once you are connected to the right staffer:
“Hi, I’m [name] and I work with [organization] that serve your district. I’m calling because I want to ask the Senator to sign onto a Dear Colleague Letter from Sen. Schumer in support of funding for USDA Rural Housing programs. These programs are critical to the work we do in your state to help low-income rural families find affordable rental housing or to become homeowners. I would also like to ask the Senator to submit an appropriations request to support these programs.”
Give an example of how you use USDA Rural Housing programs.
For example, how much USDA funding did you help families secure last year?
How many families became homeowners?
How many units of affordable rental housing did you build or preserve?
Last week, Rep. Hinojosa (D-TX) and Sean Duffy (R-WI) released a bipartisan Dear Colleague Letter asking Members of Congress to join them in urging the House Appropriations Committee to fund critical USDA Rural Housing programs!
The deadline for Representatives to sign on has been extended to March 18, and they can contact Fernando Ruiz (Fernando.Ruiz@mail.house.gov) in Hinojosa’s office to sign on. The deadline for Representatives to submit their electronic Appropriations Requests is March 23.
The Hinojosa/Duffy Dear Colleague letter can be found here.
NRHC’s Appropriations Request Spreadsheet is here.
“Hi, my name is [name] and I am with [organization] and I live/work in your district. I’d like to speak with the Representative’s staffer who handles Agriculture or Housing issues.”
Once you are connected to the right staffer:
“Hi, I’m [name] and I work with [organization] that serve your district. I’m calling because I want to ask the Representative to sign onto a bipartisan Dear Colleague Letter from Rep. Duffy and Rep. Hinojosa in support of funding for USDA Rural Housing programs. These programs are critical to the work we do you in the district to help low-income rural families find affordable rental housing or to become homeowners. I would also like to ask the Representative to submit an appropriations request to support these programs.”
Give an example of how you use USDA Rural Housing programs.
For example, how much USDA funding did you help families secure last year?
How many families became homeowners?
How many units of affordable rental housing did you build or preserve?