CARH’s BROADCAST EMAIL—Legislative Alert

March 11, 2024

On March 9, 2024, President Biden signed into law H.R. 4366, the Consolidated Appropriations Act for 2024, which provides for full Fiscal Year (FY) 2024 funding for the U.S. Department of Agriculture, the Department of Housing (USDA) and the Department of Housing and Urban Development (HUD) and four other federal agencies. This full year funding bill comes after a series of Continuing Resolutions (CR) that were needed since full year funding bills had not been passed by the Congress.

As CARH members can see from the attached chart outlining the Rural Development (RD) housing programs, funding remains close to FY 2023 levels, but with some increases and important allowances. The Administration’s FY 2024 budget request for the Section 521 Rental Assistance (RA) program, was $1.688 billion. That total also assumed that $38 million would be provided for the Section 542 rural housing voucher program, rather than a stand-alone account as funded in previous years. H.R. 4366 provides for $1.608 billion, with the Section 542 voucher program remaining its own line item, funded at $48 million. CARH is supportive of language in H.R. 4366 that allows RA contracts to be 20 years, subject to annual appropriations. This 20-year language has been in the last several funding bills passed by Congress.

Over the next decade, as much as three-quarters of all Section 515 mortgages will mature, and with it the end of related Section 521 RA contracts, stranding approximately 250,000 families and elderly persons and leaving them without the ability to house themselves. Under current law, when a Section 515 mortgage expires, Section 521 RA also expires. Contained in H.R. 4366 is language that will provide RD with authority to structure a demonstration program that will decouple RA from the Section 515 program for 1,000 units in properties where a mortgage is set to expire.    Currently, with RA tied to the Section 515 loan, in order to protect residents to the maximum extent, owners have to run through the complex processing of RD mortgage loan assumption, even when it makes little financial sense to maintain the Section 515 loan. While decoupling Section 521 RA from the Section 515 loan is different than what HUD calls decoupling, it would put the RA contracts on the very logical path to being an important preservation tool. CARH looks forward to working with RD in helping to structure this demonstration program.

The Section 538 Rural Rental Guaranteed Housing Loan program will receive $400 million in budget authority for FY 2024. This level of budget authority will have a significant impact on the program, increasing the number of transactions which are aimed at providing more work-force housing while at the same time providing more financing for preservation. The Section 515 program would receive $60 million. The Multifamily Preservation and Revitalization (MPR) Demonstration program would receive $34 million, a slight reduction from the FY 2023 approved level.

The FY 2024 funding bill will provide $70 billion for HUD, a $8.3 billion increase from FY 2023 enacted funding levels. The attached chart outlines funding levels for HUD programs of interest to CARH members include the following: $32.38 billion for Tenant-Based Rental Assistance (TBRA) Section 8 activities, which includes $28.49 billion for renewal of tenant-based vouchers. $16 billion for Project-Based Rental Assistance (PBRA); $8.9 billion for the public housing fund, including $5.5 billion for the public housing operating fund and $3.4 billion through the capital fund formula; $4 billion for Homeless Assistance Grants; $1.25 billion for the HOME Investment Partnerships Program, $250 billion less than in FY 2023; $10 million under the Preservation and Reinvestment Initiative for Community Enhancement (PRICE) program to support resiliency and preservation of manufactured housing and manufactured housing communities.

CARH continues to support passage of H.R. 7024, the Tax Relief for American Families and Workers Act of 2024. The House of Representatives passed H.R. 7024 on January 31, 2024, by a vote of 357-70. Contained in this legislation are two provisions which would finance more affordable housing by increasing housing credit authority and lowering the multifamily bond financing threshold for 4 percent developments. Specifically, the two provisions would:

  • Restore the 12.5 percent cut in Housing Credit authority the program suffered after a temporary four-year increase for 2018 – 2021 expired. The bill would boost Housing Credit authority by 12.5 percent for 2023, 2024, and 2025. State agencies have two years in which to allocate each year’s annual credit authority, should the bill pass as currently written, states will need to allocate the additional 2023 credits by the end of 2024.
  • Lower the tax-exempt bond financing requirement (the “50 percent test”) from 50 to 30 percent for bonds with an issue date before 2026, effective for buildings placed in service after December 31, 2023. A property that already has received partial bond financing prior to 2024 would need to have at least 5 percent of its aggregate basis financed with authority from a bond with an issue date in 2024 or 2025 to benefit from the 30 percent test. For purposes of the placed-in-service requirement, acquisition/rehabilitation buildings — which are treated as two separate buildings under the tax code — would be subject to the 30 percent test for the aggregate basis of both the acquisition and the rehabilitation even if the acquisition’s placed-in-service date is before December 31, 2023, as long as the rehabilitation placed-in-service date is after that date.

CARH urges the Senate to prioritize consideration of H.R. 7024 so that the legislation can be passed during this session of Congress and provisions can become effective this year. CARH urges our members to reach out to your Senators and ask them to support passage of H.R. 7024. To contact your Senators, click here.

The FY 2025 proposed budget was released today. CARH will update our members on the proposed budget later this week after we have reviewed details.

For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website,