Updated Maturing Mortgages Data Released


April 10, 2017
On April 7, Rural Development (RD) announced that they updated their Section 515 and Section 514/516 maturing mortgage data, through the quarter ending December 31, 2016, onto their Multi-Family Property Preservation Tool. You can also access the MFH Property Preservation Tool from RD’s website under the Forms & Resources tab. The dashboard has been updated to provide additional information indicating changes in maturity dates since the initial maturing mortgage data was provided for the quarter ending March 31, 2016.

CARH’s Maturing Mortgages Database will soon be updated with the newly released data. That database can be found by clicking here, or visiting the Members’ Only section of the CARH website, www.carh.org.

There are nearly 14,200 apartment communities throughout the country that have been financed through RD’s Section 515 and 514/516 programs. As CARH members know, the Section 521 Rental Assistance (RA) program has been used in conjunction with these programs. There are some 271,000 units which have rent subsidy through the 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, nearly half a million households in rural Americans would be left without 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, with 15 properties containing 428 rental units reaching maturity.  The maturities surge by the year 2022 when nearly 10,000 units of affordable housing would mature out of the program, eliminating some of the only affordable housing that is available in many rural communities. RD last year had initially told stakeholders that the maturing mortgage cliff would happen much sooner.  However, the agency has recalibrated that information based on work by an outside contractor that is reflective in the Multi-Family Property Preservation Tool.

In addition to CARH closely monitoring this very important issue, GAO has been asked by Congress to examine this issue. GAO has spoken to many CARH members and stakeholders in order to garner as much information on the maturing issue as well as the RA program. It is expected that a report will be issued by GAO later this year. This report will no doubt set the stage for Congressional action on the maturing mortgage issue. When the GAO analysis is complete, CARH will look at recommendations and respond accordingly. Please look for updates on this important issue either through CARH broadcast emails or in articles in CARH News.

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

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