Hearing Focuses on Rural Housing Preservation, Improvement
The USDA’s Rural Housing Services’ multifamily programs were a focus of a September 20 hearing in the Housing, Transportation, and Community Development Subcommittee of the Senate Banking, Housing, and Urban Affairs Committee.
Subcommittee Chair Tina Smith (D-MN) announced the introduction of The Strategy and Investment in Rural Housing Preservation Act of 2022, S. 4872, by herself and lead sponsor Senator Jeanne Shaheen (D-NH). The bill, which Senator Shaheen has championed for years, would allow RHS Section 521 rental assistance to be decoupled from a property’s underlying RHS Section 515 loan but remain in place at the property. The bill would also allow residents to transfer their rental assistance to another eligible property altogether. Today, when a Section 515 mortgage matures or is paid off, a Section 515 property loses its Section 521 Rental Assistance. “Decoupling the mortgage from rental assistance is a policy solution that can support continued housing stability for rural residents, as U.S.D.A. preservation resources are limited, by allowing rental assistance to continue at a property that no longer has a qualifying mortgage,” Elizabeth Glidden, Minnesota Housing Partnership, testified at the hearing.
The bill, and its House companion, H.R. 1728, would require properties seeking to decouple to sign a restrictive use agreement and multiyear rental assistance contract, preferably for 20 years and to demonstrate that they have tried to access other preservation funding before pursuing decoupling as a last resort. The bill would also make permanent the
“New Hampshire is in midst of affordable housing crisis. The rental vacancy rate is 0.5% in New Hampshire. Meanwhile, rents continue to increase at an alarming rate. The cost of a two bedroom apartment has increased 26% in last five years. This is an urban and rural issue. The Rural Housing Service is a critical source of affordable housing,” Senator Shaheen said at the hearing. “Preserving rural affordable housing is an enormous challenge but we must do it to prevent immediate harm as we also work to create new housing.”
The bill would also make permanent RHS’s Multifamily Preservation and Revitalization (MPR) Demonstration Loans and Grants Program. This program, currently funded as a demonstration, is used to restructure loans for existing USDA Rural Rental Housing to help improve and preserve the availability of safe, affordable rental housing for low income residents. MPR funding tools include debt deferral, soft second loans, zero percent loans, and grants to address a project’s exigent health and safety needs.
Watch the hearing here.