Washington, DC (March 15, 2006) – Congressman Rubén Hinojosa (TX-15) is leading an effort to preserve funding for the United States Department of Agriculture’s (USDA’s) Section 515 Rural Housing Service (RHS) Program. Today, Hinojosa, along with 22 other Members of Congress, sent a letter to Congressman Henry Bonilla and Congresswoman Rosa DeLauro, Chairman and Ranking Member respectively of the Subcommittee on Agriculture, Committee on Appropriations, requesting that funds for this program be preserved at the FY06 appropriated level of $99 million.
“The Rural Housing Service Program is one of a series that directly helps low-income and rural communities across the country,” said Hinojosa. “At a time when funds for programs such as these need to be maintained, it’s a mystery to me that we would even consider eliminating them. It is my hope that the Appropriations Committee will maintain the program’s funding and not strike a blow to those who rely on its services.”
The President’s proposed FY07 budget eliminates funding for the RHS Section 515 program, which provides funds for construction, repair and preservation of affordable rental housing units in rural areas. It is the only authorized Federal program that provides new construction loans for multi-family housing in rural areas for persons of low-, very low-, and moderate incomes, especially the elderly and disabled.
The program also provides funding for the repair and rehabilitation of existing affordable rental housing units, in order to encourage owners to remain in the program and serve lower income families in rural areas.
Below is text of the letter.
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Dear Chairman Bonilla and Ranking Member DeLauro:
We write to request that you consider funding the USDA's Section 515 Rural Housing Service (RHS) program at a minimum at the FY 2006 appropriated level of $99 million.
As you know, the President's budget request proposes to eliminate funding for the RHS Section 515 program. The RHS 515 program plays a critical role in facilitating affordable rental housing in rural areas, by providing funds both for new construction and for the repair and preservation of RHS Section 515 affordable rental housing units.
The Section 515 program is the only authorized Federal program that provides new construction loans for multi-family housing in rural areas. Units built under the 515 program provide affordable rental housing for persons of low, very low, and moderate incomes living in rural areas, many of whom are elderly and disabled.
The 515 program also provides funding for the repair and rehabilitation of existing 515 affordable rental housing units, in order to encourage owners to remain in the program and serve lower income families in rural areas. In November, 2004, USDA commissioned a report entitled The Comprehensive Property Assessment and Portfolio Analysis of Rural Rental Housing (CPA Report), in order to assess the status of the existing Section 515 portfolio.
The report concluded that over 90% of the nearly 500,000 units in the Section 515 portfolio are worth preserving. However, the report noted that the average age of Section 515 housing projects is 26 years, and most are in need of renovation, and further noted that substantial funding is needed each year to repair and thus preserve these properties. At the same time, the CPA Report found that no existing Section 515 property has sufficient money available in its reserve fund for these essential repairs.
Unfortunately, the FY 2007 budget would zero out the program that plays a critical role in preserving these 515 units. Therefore, we would request that Section 515 funding be restored to at least last year's level of $99 million, in order to address the needs outlined in the CPA report and new construction of affordable rural rental housing units.