Self-Help Housing Could Face Cuts

The president’s budget calls for modest increases in rural housing programs. But advocates are flagging a possible cut to the mutual self-help program, which helps low-income residents build houses for each other. And at Housing and Urban Development, the administration proposes to eliminate the Rural Innovation Fund.

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Rural housing programs in the Department of Agriculture would get a modest increase in spending under the president’s proposed budget for 2016, rising by $94 million over this year’s figures to about $29.2 billion.

At Housing and Urban Development, another important source of housing funding for rural areas, key programs are also recommended for increases. But relatively small, rural programs have been zeroed out, according to a rural housing advocacy organization.

The budget at USDA’s Rural Housing calls for an increase in loans to construct multi-family housing like apartment buildings. There’s also an increase to help low-income rural renters, though some participants may see their share of the monthly rent go up to help pay for the program.

The USDA funding increases are offset by user fees and cost sharing, plus cuts in self-help housing programs. There’s also a small decrease in the community facilities program, which provides loans and grants for buildings that improve health, public safety or education.

The recommendations are part of the budget proposal released by the Obama administration Monday. The proposal is the first step in negotiations between the Democrat-controlled White House and the Republican-controlled Congress over spending for 2016. (We looked at proposed funding for the USDA's business development programs in an earlier story.)

Funds for USDA’s program that supports multi-family housing like apartment buildings would rise by about $64 million to a total of $242 million for both direct and guaranteed loans. (Direct loans provide financing directly to housing entities from the government. Guaranteed loans are handled by private lenders but backed by the government, making them a safer business bet for private entities.)

Funding to help renters would increase by $83 million to a total of $1.17 billion.

But to help pay for the increase in rental assistance, the program recommends adding a $50 minimum rent for participants. The Housing Assistance Council (HAC), which advocates on behalf of rural housing programs, says the president proposed the same change last year, but advocates blocked it.

One change HAC is watching, according to their budget analysis, is a proposed decrease in funding for mutual self-help housing. Funding would drop from $28 million currently to $10 million in 2016. Some of that shortfall could be made up in carryover from funds not spent in the current fiscal year. Mutual self-help housing helps low-income residents build homes for each other.

USDA loans for single-family housing remain steady in the president’s plan – $24.9 billion in guaranteed and direct loans. Those programs account for more than two out of every three dollars USDA spends on housing.

At Housing and Urban Development, another important source of public funding for housing programs in rural areas, HAC reports that there are increases in a variety of programs in home ownership, public housing, services to the homeless and senior housing. “But the bad news is that small rural programs are zeroed out,” according to HAC.

For example, the Rural Innovation Fund hasn't been funded since 2011 and isn't mentioned in the HUD budget.

 

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