The Administration’s budget request for FY12 proposes extensive cuts to rural housing, including popular programs for both homeownership and rental housing.
The FY12 request would eliminate funds for two USDA rental housing preservation programs: the Multi-Family Preservation and Revitalization Demonstration and the Preservation Revolving Loan Fund. Congress has funded these programs for several years, but has not yet passed separate legislation to authorize them. In the last several sessions of Congress, rural rental housing preservation bills that would have authorized these two programs made headway in the House, but the Senate never considered them.
It would also defund USDA’s longstanding self-help housing program and HUD’s Self-Help Homeownership Opportunity Program (known as SHOP). More than 80% of the funding for Section 502 direct loans at below-market rates would be cut. Section 504 loans, which enable very low income homeowners to remove immediate health and safety hazards, would receive no support at all, and funds for Section 504 grants would be greatly reduced.
The FY12 budget does recommend funding all expiring USDA rental assistance contracts and increasing funding for the Section 515 rental program. It also supports the Section 502 guarantee program, which pays for itself through fees but relies on market-rate mortgage loans and therefore cannot assist homebuyers with incomes as low as those served by the Section 502 direct loan program.
Our thanks to the Housing Assistance Council (www.ruralhome.org) for contributing this article.