Funding FY15 USDA Housing Programs Passed by House & Senate Approp. Committees; HUD Not Far Behind

Legislative Update

June 2, 2014

The House and Senate Appropriations Committees have passed their respective versions of Fiscal Year (FY) 2015 funding bills for the United States Department of Agriculture (USDA) (including Rural Development (RD)) and sent them to the full House and Senate for consideration. (The House bill number is not yet available but the Senate's version is S. 2389)  As CARH members can see from the attached charts, while funding levels in the two bills are very similar, they are not identical and the differences will need to be addressed.  This reconciliation between the bills should occur when the full House and Senate take up their respective bills or when conference occurs later this summer. Also, as this is an election year, it is very possible there will be a Continuing Resolution in the first part of FY 2015, or some form of an Omnibus measure since the new fiscal year begins on October 1, 2014, a month before the Congressional elections.

For rural rental housing, perhaps the most significant issue is the Section 521 Rental Assistance (RA) Account.  The Administration requested $1.088 billion, which the House adopted; the Senate has recommended $1.093 billion.  These amounts are less than the $1.110 billion appropriated in FY 2014.  Of immediate concern is whether the funding recommended by either Committee will be sufficient to fund all existing contracts and at the same time also enough RA for preservation activities.  The Administration, in its budget request, proposed reducing the RA account by $21 million below the FY2014 level, and stated the difference would be made up with residents paying a $50 minimum rent, and a prohibition on "re-renewals."  There was also a provision giving the USDA Secretary broad discretion in renewing RA contracts, obstensively to prioritize renewals in the event of future shortages. USDA asked for this discretion to help create flexibility.  Both the House and Senate rejected the $50 minimum rent and the proposed USDA Secretary discretionary language.  However, the House and Senate did agree to the proposal that RA contracts are to be funded for one year durations and that they cannot be re-renewed, or renewed a second time, during this 12-month time period.  Taken on its face, instead of increasing USDA discretion, this language removes what little discretion USDA had with contracts.  USDA must renew every RA contract for 12 months and must do so at a level sufficient to avoid re-renewals.  It would appear that it is now incumbent on RD field staffs to approve budgets to fund 12 months of operations.  Certainly, it is now more important than ever for owners and managers to fully fund all RA contracts, including adequate funding needed for any preservation activities, so there is no second budget or second RA renewal later in the year.

Of course, CARH is concerned with and continues to work with RD and the House and Senate on improving the Section 538 program, rural vouchers, the MPR demonstration program, project preservation, and management fee increases.  All of these topics and more will be addressed during CARH's Annual Meeting and Legislative Conference next week.

In terms of funding for the Department of Housing and Urban Development (HUD), the full House Appropriations Committee voted to report to the full House its version (H.R. 4745) last week.  The House is not in session this week but is expected to begin consideration as early as next week.  The full Senate Appropriations Committee will begin consideration of its bill tomorrow, June 3.  CARH is particularly concerned with funding for the HOME program, Rental Assistance Demonstration (RAD) and Section 8.  Under H.R. 4745, HOME would be cut to $700 million from the Administration's requested level of $950 million, which is also $300 million less than the FY 2014 funded level.  We are also working with other groups to help provide HUD with the flexibility to implement RAD and raise the unit limitation on the 1st component and secure HUD's small funding request.  CARH is also concerned, if not for FY2015 then for FY2016, that project based Section 8 be fully funded.  Currently, HUD is using administrative measures to close funding gaps but those will likely be exhausted in the near term.  Of course, CARH is concerned with, and continues to work on, other measures such as the tenant-based voucher resources and HUD's small loan risk sharing program.

Just as with RD's budget, funding for a variety of HUD programs and the Housing Credit will be explored throughout the CARH meeting next week.  For those CARH members who have not yet registered, you still have the opportunity to attend the meeting.  Click here for a copy of the meeting brochure, which includes the registration form.

Please contact the CARH national office at or 703-837-9001 should you have questions or concerns.  

Comments are closed.