Washington [9.19.23] – This week, Senators Tina Smith (D-MN) and Mike Rounds (R-SD) announced growing support for their bipartisan legislation to improve federal rural housing programs, cut red tape, and strengthen the supply of affordable housing.
Their updated bill would represent the most significant Rural Housing Service reforms years, and has the support of a large bipartisan group of senators including eight members of the Banking Committee. New cosponsors include Senators Cynthia Lummis (R-WY), Jon Tester (D-MT), Mike Crapo (R-ID), Chris Van Hollen (D-MD), Steve Daines (R-MT), and John Fetterman (D-PA).
“Without a safe, affordable place to live, nothing else in your life works. Not your job, not your education, not your health,” said Smith. “We know that the housing crisis is hurting communities across the country, and the problem is particularly acute in rural places. This legislation is the direct result of bipartisan hearings and conversations with stakeholders who helped identify ways we can make federal rural housing programs work better for people struggling to find a safe, affordable place to live. I’m excited about the growing support for this package of rural housing reforms”
“I am pleased with the bipartisan coalition that is building around this commonsense legislation to update USDA’s Rural Housing Service,” said Rounds. “Homeownership is part of the American dream and a key to building wealth. This legislation makes important improvements and updates that will create and preserve affordable housing opportunities in South Dakota. As we face an affordable housing crisis across the nation, I look forward to working with my colleagues to get these important, bipartisan updates signed into law.”
“Wyoming families are struggling due to the lack of affordable housing throughout our state,” said Lummis. “The bipartisan Rural Housing Service Reform Act will ensure multifamily properties can continue accepting housing vouchers that low-income families in Wyoming rely on, providing much needed relief for renters during ongoing housing shortages.”
“Improving access to affordable housing is one of the most pressing issues facing our country, especially in rural states like Montana,” said Tester. “As a third-generation Montanan who has lived in a rural community my whole life, ensuring that working families can afford to put a roof over their head for generations to come is personal to me. That’s why I’m proud to team up with Republicans and Democrats on this commonsense, bipartisan legislation that will support housing and community development in rural areas.”
“America’s housing crisis affects both urban and rural communities,” said Crapo. “This legislation includes much-needed improvements and updates to the Rural Housing Service that allow more Americans to achieve the dream of home ownership.”
“This bill provides desperately needed fixes to USDA housing programs, making sure that the rural Pennsylvanians who need housing get it,” said Fetterman. “I’m especially proud of the provision to improve the USDA housing voucher program, which I worked on with Senator Smith to get done. When someone’s financial situation—and need—change, the support they receive through the program should change too. This bill will make that a reality.”
“While homeownership is a key path for Americans to build wealth and strengthen their economic position, it is becoming too hard for many to achieve or maintain that goal,” said Senator Van Hollen. “The USDA has long provided financial relief for rural homeowners, but its programs have not kept pace with the challenges of today’s housing market. This bipartisan bill will modernize the USDA Rural Housing Service to help protect and expand affordable housing access in rural communities across America.”
Lack of affordable housing remains an impediment for many rural towns and communities as they struggle to attract new businesses, residents and talent. Starting last year, when they led the Subcommittee on Housing, Transportation, and Community Development, Senators Smith and Rounds held several hearings looking at ways to improve federal rural housing programs.
The Rural Housing Service Reform Act of 2023 is the direct result of these hearings and public input from stakeholders closest to the issue. The bill generated new momentum ahead of its reintroduction, with six bipartisan senators signing on as cosponsors. The legislation would improve and build upon a number of U.S. Department of Agriculture (USDA) rural housing programs. Specifically, the bill would:
- Fix a longstanding problem for USDA Sec. 515 properties that were financed decades ago and now have maturing mortgages, by making it easier for non-profits to acquire those properties and ensure that rental assistance doesn’t disappear when those mortgages mature. This is especially important in Minnesota, which has more of these maturing mortgages than anywhere else in the country so far.
- Make permanent a USDA pilot program to make mortgage loans available in Native communities by partnering with local CDFIs.
- Bring the USDA’s outdated way of measuring incomes in line with HUD’s practices.
- Modernize the USDA’s foreclosure process to cut red tape, better protect homeowners, and ensure USDA-owned properties stay affordable.
- Update the rules for a home repair loan program to make it less burdensome to get smaller loans.
- And make much-needed investments in IT so that USDA can process loans more quickly and with less staff time wasted on paperwork or manual data entry.
The primary updates in the reintroduced bill are:
- A sunset on the authorization to address staffing and technology issues at the Rural Housing Service.
- Requesting a GAO report to determine the staffing and technology needs at the Rural Housing Service.
The legislation is supported by Housing Assistance Council (HAC), National Housing Law Project (NHLP), National Rural Housing Coalition (NRHC), Genesis Fund, National Affordable Housing Management Association (NAHMA), Enterprise, LISC, National NeighborWorks Association, Minnesota Housing, Coastal Enterprises, Inc., National Low Income Housing Coalition (NLIHC), Bipartisan Policy Center, Minnesota Housing Partnership, Central Minnesota Housing Partnership, D.W. Jones, Southeast Minnesota Multi-County HRA (SEMMCHRA), Housing and Redevelopment Authority of Stearns County, Minnesota, Southwest Minnesota Housing Partnership, and Carver County CDA.
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