Rural housing programs got mostly good news in President Joe Biden’s proposed 2024 federal budget.
But with a polarized Republican House and Democratic Senate, and a looming fight over the extension of the debt ceiling, this year’s budget process may be especially difficult.
The Biden 2024 budget request, released in March, would increase funding levels for most U.S. Department of Agriculture rural housing programs. The Housing Assistance Council’s (HAC’s) analysis notes that the proposed budget “asks Congress to continue funding the 27,000 Section 521 Rental Assistance units added by pandemic relief legislation and renews proposals made in last year’s budget to improve rental housing preservation.”
There are substantial funding increases in Section 515 rental housing, Section 502 homeownership loans, the Rural Community Development Initiative (RCDI), and in loans and grants for both farm labor housing and home repair programs.
There is also a proposal to eliminate “subsidy recapture” for borrowers in Section 502 direct homeownership program. HAC points out that “[r]ecapture requires that, when a low- or very low-income homeowner with a Section 502 loan sells the house or moves, they must repay … subsidy amounts … received over the life of the loan.” USDA estimates that ending this penalty for current borrowers would cost the government $996 million. This and other possible changes would need separate authorizing legislation.
The budget also seeks significant new funding levels for U.S. Housing and Urban Development accounts, including some used widely in rural areas. The HOME program would rise from $1.5 billion to $1.8 billion, and there would be sizable boosts in incremental rental assistance vouchers and public housing. But the budget also seeks small cuts in the Self Help Homeownership Opportunity (SHOP), Section 184 guarantee, and Rural Capacity Building programs.
The HUD request also would create several new mandatory spending programs. They would need authorizing legislation in addition to the annual appropriations bills. Any new such initiatives are very unlikely in the current Congress.
In the HUD appropriations bill, Congressionally-directed “earmarks” under Community Development Block Grants will almost certainly be back.
As t proposed budget moves to consideration in Congress, where the House of Representatives is not expected to accept many of the president’s ideas, Biden’s proposal will go under severe scrutiny. Congressional appropriators’ usual starting point is last year’s enacted bill, not the president’s proposal.
The views of the leaders of the spending panels show how far apart Congress may be.
House Appropriations Committee Chair Kay Granger (R-TX) said in a statement on March 9, “As we face growing threats at our border and around the globe, the President’s proposal spends far too much on unnecessary programs at the expense of our national security. America simply cannot afford this misguided plan. Congress will now get to work, reviewing it line-by-line to identify programs that do not require additional investments and to insert our own priorities.”
In a hearing on the Biden budget on March 15, Senate Appropriations Chair Patty Murray (D-WA) said that the president’s budget “includes a lot of … important investments—everything from boosting the supply of affordable housing to strengthening Medicare and Social Security for the next generation. And those are the exact kinds of investments that House Republicans are attempting to hold hostage or cut entirely as Congress looks to address the debt ceiling.”
HAC’s analysis and materials from a March 15 budget webinar – as well as ongoing budget coverage — are available at www.ruralhome.org. The tables below compare the 2024 proposals with final appropriated levels for 2022 and 2023 for both USDA and HUD.
Table 1. USDA rural housing funding
Selected USDA Programs (dollars in millions)Final FY 22 appropriationFinal FY 23 appropriationFY 24 proposed budgetSec. 502 Single-Family Direct Loans (a)$1,250$1,250$1,500 Native Amer. SF Demo.–7.512Sec. 502 Single-Family Guaranteed Loans (b) 30,00030,00030,000Sec. 515 Rental Direct Loans (a)5070200Sec. 521 Rental Assistance (c)1,4501,4881,650Sec. 538 Rental Housing Guaranteed Loans (b) 250400400Sec. 514 Farm Labor Housing Loans 282050Sec. 516 Farm Labor Housing Grants101018Sec. 504 Very Low-Income Repair Loans282850Sec. 504 Very Low-Income Repair Grants323240Sec. 523 Self-Help Housing Grants323240
Direct loans are made by USDA as the lender.
Guaranteed loans are made by private lenders with a federal government guarantee.
521 rental assistance supports low-income tenant rents in 515 apartments.
Source: Housing Assistance Council analysis
Table 2. HUD program funding
Selected HUD Programs (dollars in millions)Final FY 22 appropriationFinal FY 23 appropriationFY 24 proposed budgetCommunity Development Block Grants$3,300*$3,300*$3,300HOME1,5001,5001,800Self-Help Homeownership Opportunity (SHOP)12.513.510Veterans Home Rehab414Tenant-Based Rental Assistance27,37027,60032,703Project-Based Rental Assistance13,94013,93815,904Public Housing Capital Fund3,3883,2003,225Public Housing Operating Fund5,0645,1095,133Native American Housing1,0021,0201,053Homeless Assistance Grants3,2133,6333,749Housing Opps. for Persons w/ AIDS450499505202 Housing for Elderly1,0331,0751,023811 Housing for Disabled352360356Fair Housing858690Healthy Homes & Lead Hazard Control415410410Housing Counseling57.557.566Rural Capacity Building665SOURCE: Housing Assistance Council
*Final CDBG funding included $1.5 billion in 2022 and almost $3 billion in 2023 for Congressional earmarks. These figures are not included in the table.
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