Senate Appropriations Committee FY 2011 Rural Housing Spending Bill Includes NCSHA-Supported Preservation Funding

The Senate Appropriations Committee recently released the bill text of the FY 2011 Department of Agriculture (USDA) appropriations bill, S. 3606, passed on July 15. The bill includes $1.2 billion for the Section 502 single-family subsidized direct loan program, 7 percent, or $78.5 million, more than the FY 2010 funding level and the same as the President’s request. The bill also provides $24 billion for the Section 502 unsubsidized guaranteed loan program, double its FY 2010 funding level and the President’s request.

The bill includes $69.5 million for the Section 515 rural rental housing loan program, the same as its FY 2010 appropriation and $29.7 million less than the President’s request. It also includes $129 million for the Section 538 multifamily loan guarantee program, equal to its FY 2010 funding level and the President’s request.

Under the Section 542 rural housing voucher program, the bill includes $16.4 million for rural housing vouchers for families living in Section 515-assisted properties whose owners prepaid the mortgage. The bill also includes $2.7 million for the Preservation Revolving Loan Fund (PRLF) – low-interest revolving loans to HFAs and nonprofits for affordable housing preservation – and $25 million for USDA’s Multifamily Preservation and Revitalization (MPR) program – a rural housing preservation demonstration program. The President’s Budget requested no funding for either of these programs. NCSHA joined other local and national organizations in sending a letter to Senate and House Appropriations Committee leaders explaining the importance of these two programs and urging the committees to provide funding for them.

The bill allows USDA to increase the Section 502 Single-Family Rural Housing Guaranteed Loan Program’s current 2 percent upfront fee to up to 3.5 percent and establish an annual fee of up to 0.5 percent to make the program self-funding.

This is the same authority Congress would give USDA in the FY 2010 supplemental appropriations bill to allow the program to continue until the September 30 end of FY 2010. The program ran out of funds in May due to high demand. The Senate rejected a set of House-passed amendments to the Senate-passed supplemental appropriations bill July 22. The House is expected to pass the Senate-passed bill with the Section 502 program extension and send it to the President the week of July 25.

Consideration of the FY 2011 USDA appropriations bill has not been scheduled for the Senate floor. The House Agriculture and Rural Development Subcommittee held a markup of its version of the bill on June 30; the full Appropriations Committee markup is scheduled for July 27. The only funding level information released from the House Subcommittee markup is $1.3 billion for rural housing service loans and grants, $101.8 million less than appropriated in FY 2010 and $71.9 million more than the President’s request. The full bill text for the House version will not be available until after the House Appropriations Committee markup.