Representative Kuster Introduces Bill to Preserve Rental Assistance for Certain USDA Section 515 Properties
Last week, Representative Ann McLane Kuster (D-NH) introduced the Rural Housing Preservation Act of 2016, H.R. 4908, which seeks to provide relief to rural multifamily developments financed under the U.S. Department of Agriculture (USDA) Section 515 Rural Rental Housing Loan Program that will lose rental assistance in the future due to pre-paid or maturing mortgages.
Existing USDA rental assistance contracts on multifamily developments financed with Section 515 loans terminate when the loans are fully paid. There are 11,576 properties in the Section 515 program that will have their rental assistance expire over the next ten years due to mortgages fully maturing or owners pre-paying those mortgages, affecting over 215,000 units and 344,000 individuals. Using data provided by USDA, NCSHA has prepared a summary chart showing how many mortgages USDA expects to mature over the next four years in each state.
Since 2004, USDA appropriations bills have included provisions to make residents of properties with pre-paid mortgages eligible for USDA Section 542 housing vouchers. However, residents in maturing mortgage properties are not eligible for Section 542 vouchers under these provisions. H.R. 4908 would authorize USDA to provide vouchers to eligible residents in properties with pre-paid and maturing mortgages and would also:
- Enhance the value of housing vouchers to better provide assistance to recipients in higher cost areas;
- Allow USDA to renew rental assistance contracts on Section 515 properties regardless of whether the properties have outstanding USDA mortgages or whether the mortgages mature or are pre-paid; and
- Make permanent the Multi-Family Preservation and Revitalization Restructuring Program (MPR), which acquires and renovates Section 515 properties.
Senator Jeanne Shaheen (D-NH) has introduced a companion bill, the Rural Housing Preservation Act of 2016, S. 2783, in the Senate.
Please contact NCSHA’s Garth Rieman with questions or comments.