New Maturing Mortgages Database

CARH’S BROADCAST E-MAIL

May 19, 2016

The United States Department of Agriculture (USDA), through Rural Development (RD), provides funding to private and nonprofit owners for multifamily rental housing in rural areas around the U.S. The primary USDA programs used to finance multifamily rental housing from the 1970’s to the present are the Section 515 Rural Rental Housing and Section 514 Farm Labor Housing loan programs.

There are nearly 14,500 such apartment communities all over the country containing almost 435,000 apartment units. The rents at these properties have always been restricted under the programs. In addition, 271,000 units have rent subsidy through the Section 521 Rental Assistance (RA) program. Like HUD’s Project-Based Section 8 program, the Section 521 RA program allows the program to assist the poorest of the poor, limits tenant rent to 30% of income but, unlike Section 8, targets rural areas of the country. Without these properties and the associated rental subsidies, 100,000’s of rural Americans would be left searching for suitable affordable housing.

The earliest of these loans made in the 1970’s are beginning to mature, meaning the loans are reaching their payoff dates. Under current law, once an RD mortgage is paid off, the affordability restrictions and any associated RA goes away and owners are permitted to increase rents and treat the property like any market rate rental community.

Loan maturities began in 2014 as a trickle, with only 15 properties containing 428 rental units reaching maturity. From 2015 onward, the trickle turns into a flood of mortgages maturing every year starting in 2019. By 2024, the Section 515 Rural Rental Housing portfolio will be but a shadow of its former self with only 24% of units remaining in the program.

CARH’s Developer and Owners Committees have recommended that CARH follow this issue closely. CARH’s Board of Director member David Layfield of ApartmentSmart.com, volunteered to create, develop and manage a database of searchable Section 515 and 514 properties with mortgages that are maturing through 2019.

The map and list of properties in the database represents the data RD has published to date. The release of the bulk of data on maturing mortgages from 2020 and beyond is imminent. When this data is released, the list will be updated.

The properties can be sorted by state or city using the table below the map. If you are looking for a specific state, you can also add the state name and a slash to the URL (i.e., http://affordablehousingonline.com/rd-maturing-mortgages/Alabama/ for Alabama). Similarly, if searching for a specific city, you can append the city name after the state name in the URL (i.e., http://affordablehousingonline.com/rd-maturing-mortgages/Alabama/Ashland/ for Ashland, Alabama.)

The database can also be linked from the Members Only section of the CARH website, www.carh.org.

In addition to CARH closely monitoring this very important issue, GAO has been asked by Congress to examine this issue and is in the process of doing so. When their analysis is complete, CARH will look at recommendations and respond accordingly.

If you have any questions, please contact us at carh@carh.org or 703-837-9001.

 

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