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National Housing Law
Project
Rural
Housing Service |
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Rural Rental Housing Preservation
Description:
Owners of Section 515 Rural Rental and Section 514 Farm Labor Housing
who entered into loans prior to December 21, 1979 have had no obligation
to maintain their housing as affordable housing for any term. Owners who
entered into loans after that date but before December 15, 1989, have generally
had an obligation to maintain their housing as affordable housing for a
term of at least 20 years. Owners who entered into their loans after December
15, 1989, have had to maintain the affordable nature of the housing for
the term of the loan. In 1987, Congress adopted legislation that authorizes
RHS to offer financial incentives, in the form of an equity loan and an
increased rate of return on investment, to owners to encourage them to
remain in the Section 514 or 515 program for at least an additional 20
years and precluded them from prepaying their loans unless (1) they agreed
to maintain the housing as affordable housing for the balance of the term
of any existing use restriction and to offer the housing for sale to a
nonprofit or public agency at the end of that term; (2) they agreed not
displace current residents and RHS determined that the prepayment would
not affect minority housing opportunities in the community; or, (3) RHS
determines that the prepayment will not materially affect minority housing
opportunities in the community, that there is an adequate supply of safe,
decent and affordable housing in the community and that such rental housing
will be made available to tenants upon displacement.
Statute: 42 U.S.C. § 1472 (c)
Regulations: 7 C.F.R. Part 3560 Subpart N
Administrative Notices:
To be updated
Reports
 Final Report of
the Task Force on Rural Rental Housing Preservation.
Funded
by the John D. and Catherine T. MacArthur Foundation, the Housing Assistance
Council (HAC) and NHLP convened a task force of tenant advocates, non-profit
organizations and for-profit developers who released a report on April 7,
2005 that makes a number of administrative, regulatory and legislative recommendations
regarding the preservation of Section 515 Rural Rental Housing (RRH). The
broad recommendations suggest that efforts seek to:
(1) Strengthen USDA administrative
processes
(2) Preserve Section 515 properties
for low-income residents and revitalize their physical condition; and
(3) Protect
tenants.
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