National Housing Law Project Housing Law Bulletin

No Dramatic Funding Changes Proposed for Rural Housing Programs

The House and Senate have each completed action on funding for rural housing programs of the Rural Housing Service (RHS) for FY 2000./1/ For some programs, the proposed funding is over last year’s enacted levels. The chart below compares the House and Senate passed proposed FY 2000 funding to the FY 1999 appropriation levels for selected programs.

The Section 515 Rural Rental Housing Program, which provides direct loans for construction, rehabilitation and preservation of rental housing, will receive a 5 percent increase under the House-passed bill and remain at its current level in the Senate version. Even with a small increase, the program, which has suffered significant cuts in recent years, remains barely viable at these funding levels. The companion Rental Assistance Program, which provides deep rental subsidies for residents living in Section 515 rental housing or in Section 514/516 farm labor housing, will receive $640 million in funding under the Senate bill, a $56 million dollar increase over the current fiscal year and the same level as requested by the Administration. The Administration, however, proposed that $440 million of that amount be included in the FY 2000 appropriations and that the remaining $200 million come in the form of an advance appropriation from the FY 2001 budget. The Senate rejected this portion of the Administration’s proposal, which was intended to enable the Administration to shift FY 2000 funding to other programs. The House bill, which also rejected the advance appropriations, maintains the program at its current level of $584 million. Unless the final appropriations for the Rental Assistance program exceed $620 million, RHS will not have sufficient funds to extend current Rental Assistance contracts that will expire in FY 2000.

Additional highlights of funding changes to rural housing programs include the following:

• The Section 514 Farm Labor Housing Program, which funds 1 percent loans for the construction of farm labor housing is scheduled to receive a $5 million, or 25 percent, increase over last year in both the Senate and House bills.

• The Section 538 Guaranteed Rural Rental Housing Program is maintained at the current $100 million in both the House and Senate bills.

• The Sec. 502 Single Family Direct Home Loan program is slated for a modest increase in both the House and Senate. The House would increase last year’s funding by $372 million. The Senate recommends a smaller increase of approximately $135 million. In either case, the increased funding is welcome news for the program which also has been cut substantially in recent years.

• The Section 504 Home Repair Loan Program will receive an $8.4 million increase under both the House and Senate bills.

• The Senate bill maintains the current funding levels for the Self Help Technical Assistance Grant Program and the Rural Housing Assistance Grants (which fund the Section 504, 516 and 533 grant programs). The House bill provides $2 million and $9 million increases, respectively, in both programs. All other programs are maintained at current levels by both the House and Senate bills.

• The House bill contains a new Rural Community Development Initiative, which provides a $6 million program for nonprofit capacity building. No funding is included for the program in the Senate bill.

With few exceptions, there are no significant differences between the funding recommendations in the House and Senate versions of the bill. Although conferees may appointed and meet at any time, the most likely time frame for reconciling differences in the two bills will be following Congress’ traditional August recess.

Notes

1    Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, 2000, H.R. 1906, H. Rep. 106-157, 106^th Cong. 1^st Sess. (June 8, 1999); S. 1233, S. Rep. 106-80, 106^th Cong. 1^st Sess. (June 17, 1999).

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