The U.S. Department of Agriculture (USDA) committed $23.4 billion to build, buy, repair, and support 177,387 affordable housing units in fiscal 2013, according to a new report.
The funds from the agency’s Rural Development unit include loans, grants, and loan guarantees.
The numbers are up from an overall $20.4 billion and 160,617 units in 2012. However, most of the increase in 2013 was in just one area–Sec. 502 guaranteed loans. In recent years, Sec. 502 homeownership loans have dramatically shifted away from direct lending in favor of loan guarantees.
Fiscal 2013 was an especially tough year for federal rural housing programs, reports the Housing Assistance Council (HAC) in its newly released publication, USDA Rural Development Housing Obligations FY 2013 Year-End Report.
The period included a six-month continuing resolution bill that severely limited funding for direct loans in the first half. “A second continuing resolution bill restored a portion of the funding, but a sequestration of funds coupled with another across-the-board reduction cut 7.5 percent from each rural housing program,” says the report.
HAC, a longtime nonprofit that supports the development of rural low-income housing, summarizes the latest Rural Development obligation data by program area and state.
On the multifamily housing side, the Sec. 515 rural rental housing program has been the flagship of RD’s efforts, providing mortgage loans to develop rental housing for low-income residents. However, fiscal 2013 was the second consecutive year that no new units were financed under Sec. 515.
Instead, the majority of program funds were used to rehabilitate existing stock. Approximately $29 million was obligated for repair and rehabilitation of 42 Sec. 515 properties, representing 1,399 repaired or rehabilitated units. This is approximately $30 million less than was obligated in fiscal 2012, according to the report.
Rural Development also had less funding for Rental Assistance. “In total, 190,697 USDA financed units received Rental Assistance in FY 2013 at a cost of roughly $837 million,” reports HAC.
This is a decline of more than 15,500 units and $67.6 million from the prior year.
Rental Assistance contracts expiring in September 2013 could not be renewed because the agency exhausted its funding. A significant amount of the shortfall was due to the sequestration/rescission of funds.
Looking ahead, the rural Rental Assistance program will have more funding in fiscal 2014. The program is funded at $1.11 billion in the recently signed budget.
USDA Rural Development Housing Obligations FY 2013 Year-End Report can be found on the HAC website.