On May 19, the House Subcommittee on Housing and Insurance of the Committee on Financial Services held an oversight hearing examining the performance of the U.S. Department of Agriculture’s Rural Housing Service (RHS) and whether its programs should be consolidated with HUD programs.
In opening remarks, Subcommittee Chair Blaine Leutkemeyer (R-MO) stated, “We continue to see throughout the nation an overwhelming need for affordable housing, and we need to ensure that RHS is doing everything in its power to fulfill that need.”
RHS Administrator Tony Hernandez said that many RHS-financed housing developments have maturing mortgages and these properties will lose their RHS Rental Assistance. He said, “With [Congress’s] help, we created policy and a program called Rental Assistance and that program works very well. The challenge we have is that those properties are coming to maturity right now and we have 11,576 properties whose contract with us and through Congress is coming to an end. That means the (tenant) subsidy, which is 30% of their income that they pay for rent, will go away unless Congress decides to help us find a way to address this challenge. So we have folks who could potentially be homeless. So we’re looking for the opportunity today to recommit providing affordable rental housing in rural America.”
Representative Keith Ellison (D-MN) also spoke about his concern regarding the lack of affordable rental housing for low income families in rural areas. Mr. Ellison explained why his bill, the “Common Sense Housing Investment Act” (H.R. 1662), would provide more resources to build more affordable rental homes in rural America.
Much of the hearing concerned whether RHS should be consolidated with HUD. Matthew Scire of the Government Accountability Office (GAO) testified that HUD serves the same rural customers as RHS in providing single-family mortgage guarantees and other products. He stated, “[The Federal Housing Agency] is in rural areas and it is serving the same income base.” Mr. Hernandez strongly disagreed, saying many RHS customers cannot qualify for FHA loans, and that RHS has more expertise in serving people living in rural areas.
Representative Andy Barr (R-KY) saw reasons to consolidate RHS because of the complexities associated with distinguishing rural areas from urban areas for federal assistance programs. Mr. Barr noted that communities in his district nearly lost their eligibility for RHS programs until Congress stepped in (see Memo 2/7/14). He said, “As the dynamics of rural America change, especially in the prevalence of rural communities that are near the statistical area of a metropolitan area, the problem becomes distinguishing between what is rural and what is not rural. Wouldn’t it be more sensible if you had a single agency responsible for [administering] all low income housing as populations shift and change and rural and non-rural become a little bit more difficult to distinguish?” Mr. Hernandez responded that whatever definitions Congress decides “rural” to mean, RHS will implement it.
A webcast and witness testimony is at http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=399039
More information about rural housing programs is on page 4-37 of NLIHC’s 2015 Advocates’ Guide, http://nlihc.org/sites/default/files/Sec4.11_USDA-Rural-Rental_2015.pdf