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House Appropriations Committee Approves FY 2015 Rural Housing Funding Bill

Published on May 30, 2014 by NCSHA Staff
House Appropriations Committee Approves FY 2015 Rural Housing Funding Bill
On May 29, the House Appropriations Committee reported by a vote of 31 to 18 the FY 2015 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (Agriculture-Rural Development) funding bill, which provides funding for the Department of Agriculture’s (USDA) rural housing programs.  The bill includes $20.9 billion in discretionary funding, equal to the FY 2014 enacted funding level.
 
There were no rural housing-related amendments offered during the Committee markup.  As reported in NCSHA’s May 20 blog post, the bill would provide the following FY 2015 funding levels:
 
  • $1 billion for the Section 502 single-family subsidized direct loan program, $142 million more than the Senate Appropriations Committee-reported bill and the FY 2014 enacted level, and $682 million more than the President’s FY 2015 Budget request.
  • $24 billion for the Section 502 unsubsidized guaranteed loan program, equal to the FY 2015 Senate bill level, the FY 2014 enacted level, and the President’s request.
  • $28 million for the Section 515 rural rental housing program and $150 million for the Section 538 multifamily loan guarantee program, equal to the levels included in the Senate bill, enacted in FY 2014, and included in the President’s Budget request.
  • $1 billion for rental assistance, $5 million less than the Senate bill, $21.5 million less than the FY 2014 level, and equal to the President’s request.
 
The bill requires USDA to enter into or renew rental assistance agreements for a 1-year period and prohibits USDA from renewing the same contract twice during the 12-month contract period. 
 
Prior to the markup, the Committee released the Agriculture-Rural Development bill’s accompanying report.  The report directs the Rural Housing Service (RHS) to report on its implementation of the three-part test to determine a community’s eligibility to participate in rural housing programs.  It directs that the report include information on the factors USDA uses to determine whether a community is “rural in character” and when a “serious lack of mortgage credit exists.”
 
The report says the Committee “appreciates USDA’s proposals to address challenges within the rental assistance program” and provides USDA the authority to limit the second renewal of contracts during the same 12-month period.  The President’s FY 2015 Budget request includes several reform proposals for the rental assistance program, including establishing a minimum rent and proposing that USDA will no longer automatically renew contracts within the same 12-month period.  The report does not address USDA’s proposal to implement a minimum rent.
The report also states that given the size of the federal investment in rural housing programs, the Committee believes RHS should actively monitor and manage the portfolio to mitigate risk.  The Committee directs RHS to report on the risk in its portfolio and how it is managed and to create a position of chief risk officer.
 
The Committee also directs the USDA Secretary to continue and expand a pilot program for packaging Section 502 direct loans.  The goal of the pilot program is to save federal funds and staff time by allowing non-profits to prepare and review applications for single-family loans.
 
The Senate Appropriations Committee reported its Agriculture-Rural Development bill, S. 2389, on May 22.  The schedules for when the House and Senate will consider their respective Committee-reported bills have not been announced.  See NCSHA’s funding chart for additional information on HUD and USDA housing program funding levels.
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