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Biden Budget Proposal for 2024 Funds Rural Housing Programs [1]

['Joe Belden', 'The Daily Yonder']

Date: 2023-04-04

Rural housing programs got mostly good news in President Joe Biden’s proposed 2024 federal budget.

But with a polarized Republican House and Democratic Senate, and a looming fight over the extension of the debt ceiling, this year’s budget process may be especially difficult.

The Biden 2024 budget request, released in March, would increase funding levels for most U.S. Department of Agriculture rural housing programs. The Housing Assistance Council’s (HAC’s) analysis notes that the proposed budget “asks Congress to continue funding the 27,000 Section 521 Rental Assistance units added by pandemic relief legislation and renews proposals made in last year’s budget to improve rental housing preservation.”

There are substantial funding increases in Section 515 rental housing, Section 502 homeownership loans, the Rural Community Development Initiative (RCDI), and in loans and grants for both farm labor housing and home repair programs.

There is also a proposal to eliminate “subsidy recapture” for borrowers in Section 502 direct homeownership program. HAC points out that “[r]ecapture requires that, when a low- or very low-income homeowner with a Section 502 loan sells the house or moves, they must repay … subsidy amounts … received over the life of the loan.” USDA estimates that ending this penalty for current borrowers would cost the government $996 million. This and other possible changes would need separate authorizing legislation.

The budget also seeks significant new funding levels for U.S. Housing and Urban Development accounts, including some used widely in rural areas. The HOME program would rise from $1.5 billion to $1.8 billion, and there would be sizable boosts in incremental rental assistance vouchers and public housing. But the budget also seeks small cuts in the Self Help Homeownership Opportunity (SHOP), Section 184 guarantee, and Rural Capacity Building programs.

The HUD request also would create several new mandatory spending programs. They would need authorizing legislation in addition to the annual appropriations bills. Any new such initiatives are very unlikely in the current Congress.

In the HUD appropriations bill, Congressionally-directed “earmarks” under Community Development Block Grants will almost certainly be back.

As t proposed budget moves to consideration in Congress, where the House of Representatives is not expected to accept many of the president’s ideas, Biden’s proposal will go under severe scrutiny. Congressional appropriators’ usual starting point is last year’s enacted bill, not the president’s proposal.

The views of the leaders of the spending panels show how far apart Congress may be.

House Appropriations Committee Chair Kay Granger (R-TX) said in a statement on March 9, “As we face growing threats at our border and around the globe, the President’s proposal spends far too much on unnecessary programs at the expense of our national security. America simply cannot afford this misguided plan. Congress will now get to work, reviewing it line-by-line to identify programs that do not require additional investments and to insert our own priorities.”

In a hearing on the Biden budget on March 15, Senate Appropriations Chair Patty Murray (D-WA) said that the president’s budget “includes a lot of … important investments—everything from boosting the supply of affordable housing to strengthening Medicare and Social Security for the next generation. And those are the exact kinds of investments that House Republicans are attempting to hold hostage or cut entirely as Congress looks to address the debt ceiling.”

HAC’s analysis and materials from a March 15 budget webinar – as well as ongoing budget coverage — are available at www.ruralhome.org. The tables below compare the 2024 proposals with final appropriated levels for 2022 and 2023 for both USDA and HUD.

Table 1. USDA rural housing funding

Selected USDA Programs (dollars in millions) Final FY 22 appropriation Final FY 23 appropriation FY 24 proposed budget Sec. 502 Single-Family Direct Loans (a) $1,250 $1,250 $1,500 Native Amer. SF Demo. – 7.5 12 Sec. 502 Single-Family Guaranteed Loans (b) 30,000 30,000 30,000 Sec. 515 Rental Direct Loans (a) 50 70 200 Sec. 521 Rental Assistance (c) 1,450 1,488 1,650 Sec. 538 Rental Housing Guaranteed Loans (b) 250 400 400 Sec. 514 Farm Labor Housing Loans 28 20 50 Sec. 516 Farm Labor Housing Grants 10 10 18 Sec. 504 Very Low-Income Repair Loans 28 28 50 Sec. 504 Very Low-Income Repair Grants 32 32 40 Sec. 523 Self-Help Housing Grants 32 32 40

Direct loans are made by USDA as the lender. Guaranteed loans are made by private lenders with a federal government guarantee. 521 rental assistance supports low-income tenant rents in 515 apartments.

Source: Housing Assistance Council analysis

Table 2. HUD program funding

Selected HUD Programs (dollars in millions) Final FY 22 appropriation Final FY 23 appropriation FY 24 proposed budget Community Development Block Grants $3,300* $3,300* $3,300 HOME 1,500 1,500 1,800 Self-Help Homeownership Opportunity (SHOP) 12.5 13.5 10 Veterans Home Rehab 4 1 4 Tenant-Based Rental Assistance 27,370 27,600 32,703 Project-Based Rental Assistance 13,940 13,938 15,904 Public Housing Capital Fund 3,388 3,200 3,225 Public Housing Operating Fund 5,064 5,109 5,133 Native American Housing 1,002 1,020 1,053 Homeless Assistance Grants 3,213 3,633 3,749 Housing Opps. for Persons w/ AIDS 450 499 505 202 Housing for Elderly 1,033 1,075 1,023 811 Housing for Disabled 352 360 356 Fair Housing 85 86 90 Healthy Homes & Lead Hazard Control 415 410 410 Housing Counseling 57.5 57.5 66 Rural Capacity Building 6 6 5 SOURCE: Housing Assistance Council

*Final CDBG funding included $1.5 billion in 2022 and almost $3 billion in 2023 for Congressional earmarks. These figures are not included in the table.

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