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December 21, 2015: Significant Changes to RD Rental Assistance and Voucher Program Funding

The omnibus fiscal year 2016 appropriations act, officially titled the Consolidated Appropriations Act, 2016, that was signed into law on December 18, makes critical funding and other changes to the Rural Development Rental Assistance (RA) and Voucher programs. It averts the displacement of tens of thousands of households by increasing funding for the RA program from the $1.167 billion that was previously proposed for this fiscal year to $1.390 billion. It eliminates the provision that prohibits RD from renewing RA contracts during their term and specifically authorizes $75 million to re-renew previously restricted contracts that are expected to exhaust their funding before their 12 month term is up.

The Act also requires the Secretary of Agriculture to report to Congress quarterly about the number of RA contracts that have been renewed, the amount of Rental Assistance funding that continues to be available, and the amount of RA that the agency estimates will be needed for the balance of this fiscal year. These changes should avoid the displacement of over 48,000 households which would have been affected by the inadequate RA funding requested by the Administration in the FY2016 budget. The reporting requirement should also alert Congress to funding shortfalls and avoid the crisis that the program faced in August and September of this year.

The Act also increases the proposed funding for the RD voucher program from $7 million to $15 million. This increase avoids hundreds, if not thousands, of households from having their existing vouchers terminated due to inadequate funding. It also changes the voucher subsidy level to the difference between a comparable market rent for the Section 515 unit and the tenant paid rent for the Section 515 unit, and eliminates the requirement, included in previous appropriations bills, that the value of the voucher be set as of the prepayment date.

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