The Housing Assistance Council (HAC) issued a “Rural Research Note” about the recent and anticipated ongoing rise in the cost of the USDA Rural Housing Service’s Section 521 Rental Assistance program. While funding for all of USDA’s Rural Development programs has declined since FY10, the annual cost of the Section 521 program has been relatively steady or increasing, but is expected to keep rising due to an FY08 change regarding the term of rental assistance contracts. Prior to FY08, USDA provided owners with rental assistance contracts of up to 20 years. After FY08, new contracts and expiring multi-year contracts seeking renewal were limited to one-year terms that had to be renewed annually. HAC notes that in FY13, sequestration cut $65 million from Section 521. Consequently, owners did not receive one-month’s worth of Section 521 payments.
In FY13, the Section 521 program provided rent assistance at approximately 190,000 units, reducing tenant rent payments to 30% of their income, generally for households with incomes below 50% of the area median income. USDA pairs the Section 521 program with its development financing programs, Section 515 Rural Rental and Sections 514 and 516 Farm Labor Housing, to make rents in these properties affordable.
View the Rural Research Note at: http://bit.ly/1bOJDN7