For rural housing programs in the Congressional omnibus spending bill that passed last month was mostly good news — but also some disappointments.
The good news for rural housing programs run through the U.S. Department of Agriculture is that most did not suffer any reductions and some got increases. However, some USDA rural housing programs in the final bill received less than the amounts requested by the president and less than the levels passed in the separate House and Senate appropriations bills. Given the likely deadlocks coming in the new Congress, it may be challenging to maintain any gains.
The table below compares the fiscal 2022 funding and the 2023 numbers for USDA housing — the Biden administration’s proposed budget, the House and Senate bills, and the final signed act.
Two of the most important rural housing programs – Section 502 direct loans for low-income homeownership and Section 515 loans to support the creation of low-income rental units –did not receive the increases that were in the House and Senate bills. Section 502 stays at $1.25 billion, the same as in FY 2022. Section 515, serving the lowest income renters, received a boost to $70 million, but that is less than the Biden request and both House and Senate bills.
Most USDA housing programs are loans that are repaid to the federal government. With the 502 direct and 515 programs, USDA is the lender.
Even with no increases, the final USDA housing figures for FY 2023 are better than former President Donald Trump’s budgets, which each year proposed steep cuts for housing and other programs serving rural America. USDA’s rural housing programs would have been mostly eliminated. Congress in all years of the Trump administration rejected those cuts on a bipartisan basis.
US Department of Housing and Urban Development
The 2023 Housing and Urban Development (HUD) budget includes an important new effort on manufactured housing. The final budget provided HUD with increases in most areas. Despite the agency’s name, HUD programs are often used in small towns and rural areas. HUD’s overall 2023 funding is $61.8 billion, a huge $8.1 billion increase over 2022.
The creation of the new $225 million manufactured housing financing and improvement program is a big victory for rural housing advocates. The Housing Assistance Council has called this new effort “game-changing.” In an earlier statement, HAC said that this new program’s aim is “to preserve and revitalize manufactured homes and their communities (including older pre-1976 mobile homes). Grants would be distributed through a competition, with eligible applicants including states, local governments, Tribes, nonprofits, CDFIs, resident-owned manufactured housing communities or coops, and possibly other entities.”
HUD’s HOME and CDBG programs kept level funding from 2022 at $1.5 billion and $3.3 billion respectively. The HUD appropriations bill also includes $2.98 billion in hundreds of specifically directed earmarks. Many earmarks serve rural communities. For example, $5.1 million will go to Alaska’s Bering Straits Regional Housing Authority to move homes out of the flood zone and construct affordable housing at safe locations.
The new manufactured housing effort at HUD is remarkable given that it has become almost impossible in recent years to pass authorizing bills to create new or amend current domestic anti-poverty programs. Contrast that to the fact that Congress in December passed and the president signed an $858 billion National Defense Authorization Act, the 62nd consecutive year for passage of such legislation. This was an increase of $80 billion over 2022. A huge defense authorization bill passes every year, while the last major authorizing legislation passed for affordable housing was in 1990. Defense appropriations is a separate huge annual bill. And a totally separate appropriations bill covers military construction and veterans’ affairs.
Very soon the fiscal 2024 appropriations process will be underway. To follow, see the Housing Assistance Council’s policy news and budget tracking at www.ruralhome.org and the National Low-Income Housing Coalition’s at www.nlihc.org.
Table 1. USDA Rural Housing funding (Selected programs. Dollars in millions)
USDA Rural Dev. Housing Program
Final FY 22 appropriation
Biden FY 23 proposed budget
FY 23 Senate bill
FY 23House bill
FY 23 final appropriationSec. 502 single family direct loans (a)
$1,250Native Amer. 502 single family demonstration
7.5Sec. 502 single family guaran- teed loans (b)
30,000Sec. 515 rental housing direct loans (a)
70Sec. 521 rental assistance (c)
1,488Sec. 504 very low inc. home repair loans
28Sec. 504 very low inc. home repair grants
32Sec. 533 housing preservation grants
16 a) Direct loans are made by USDA as the lender.
b) Guaranteed loans are made by private lenders with a federal government guarantee.
c) 521 rental assistance supports low-income tenant rents in 515 apartments.
Source: Housing Assistance Council, HAC News.
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