USDA implements relief for rural housing providers and residents

Regulation | April 08, 2020 | by Juliana Bilowich

The U.S. Department of Agriculture-Rural Development issued new support for residents and flexibilities for rural housing providers navigating the COVID-19 crisis.

In an updated statement issued on April 8, USDA-Rural Development implemented several new relief measures for rural housing providers and protections for residents. The announcement discusses CARES Act relief for both single family and multifamily housing, as well as for the Rural Development Guaranteed Loan Programs and the Rural Utility Service.

For Multi-Family Housing within the Rural Housing Service, the agency has implemented the following new protections, flexibilities, and support for residents and owners. LeadingAge ongoing requests for rural housing support are available to view online here.

CARES Act - Immediate assistance for Rural Development Tenant Vouchers:

  • Payment Assistance: If you have lost your job and are not currently using your maximum voucher amount, the voucher amount may be increased to your maximum voucher amount. For assistance in determining if you may have funding available, you may contact the Rural Development Voucher Program Office at (844) 857-5386 within the next 120 days.
  • Eviction from Your Unit: Until July 25, 2020, you cannot be evicted from your unit because you did not pay your rent. You cannot be charged any fees or penalties because you cannot pay your rent.
  • Voucher Unit Inspections: If you are planning a move, generally RD would inspect your new apartment. Decisions on postponing or cancelling voucher inspections are being made on a state-to-state basis. Please call your local RD State Office for current inspection procedures in your state. If inspections are being postponed, an owner inspection and photos of the unit via email can be used to approve your unit suitability.

CARES Act – Provisions for the Multifamily Direct and Guaranteed portfolios (guidance on forbearance requests for a Section 538 loans will be provided soon):

  • The CARES Act allows Multifamily borrowers to request forbearance if they are experiencing financial hardship due to COVID-19. Multifamily Housing has existing authority in 7 CFR §3560.453to take special servicing actions as part of a workout plan on Section 514 and 515 loans to prevent a default, and under that authority will approve a deferral of up to 3 monthly loan payments. For your convenience, RHS has provided a sample streamlined workout agreement proposal that MFH considers to be in compliance with the requirements of 7 CFR §3560.453(c). Borrowers are welcome to use that sample or submit your requests orally or in another written format to your assigned Multifamily Servicing Official.
  • Once this information is submitted to your assigned Multifamily Servicing Official, within five business days your request will be processed by the field office and sent to the National Finance, Accounting and Operations Center (NFAOC) in St. Louis to adjust your account. If your loan payment is normally offset against your Rental Assistance payment, you will receive your full RA payment without the mortgage payment deducted. If you normally send in a payment, you do not need to do anything further.
  • If the initial forbearance period is for less than 90 days, borrowers can request an extension of up 90 days total, but must request the extension at least 15 days prior to the expiration of the initial period. Forbearance can be ended at any time by contacting your assigned Multifamily Servicing Official. Payments will be deferred for up to 90 days without any additional interest or late fees. When the loan reaches maturity, any deferred payments will be added to the final payment.
  • The CARES Act prohibits evictions due to non-payment of rent for the next 120 days and does not allow owners to charge late fees or otherwise penalize tenants who are unable to pay rent. This eviction prohibition became effective upon enactment of the CARES Act (March 27, 2020) and is effective for 120 days for Section 514, Section 515 and Section 538 loans, as well as Multifamily voucher holders. As stated in 7 CFR §3560.452(c)(8), failure to comply with this Federal law is considered a nonmonetary default.

The April 8th relief provisions complement several existing flexibilities for Section 515 properties:

  • Tenant certifications due March 31, April 30 and May 31 for Multi-Family properties have been extended to June 30 with no late fees or overage charges, as allowed in Multi-Family guidance (HB-3- 3560, Chapter 4, Section 4.11). This extension will allow for additional time to complete needed certifications while avoiding face-to-face meetings as recommended by the Centers for Disease Control and Prevention (CDC).
  • Late fees on Section 515 mortgages will be waived, subject to waiver authority in 7 CFR 3560.403 (c)(3).
  • Section 515 Annual Financial Statements due March 31 will be extended 30 days, as per Multi-Family guidance (HB-2-3560 Chapter 4, Section 4.16-H). USDA is exploring whether a longer extension is appropriate and will provide further guidance.
  • Current policy states that owners must process an interim recertification at the tenant’s request if there is a change in income of $50 or more per month. The owner should already have this policy in writing and apply it consistently. To the maximum extent possible, we encourage all owners to work with all tenants with impacted income to adjust rent payments.
  • USDA encourages all owners to work with impacted residents and families to adjust rent payments, enter into forbearance agreements, and lessen the impact on affected residents.