As concerns continue to grow about the thousands of affordable housing units currently financed through the U.S. Department of Agriculture (USDA) Section 515 Rural Rental Housing loan program, which could be at risk once the loans mature or are paid in full, USDA Rural Development announced plans to help nonprofits’ efforts to retain those units.
New changes will take effect on March 1, 2017, to encourage nonprofit organizations to pursue preservation deals. Interested organizations are encouraged to contact USDA RD staff.
Once Section 515 loans mature or are paid in full, property owners are no longer required to maintain the units as affordable and can charge market rate rent. Their tenants, often very low-income households with an average household income of $13,600, could also lose USDA Rental Assistance, which helps keep their housing costs at around 30 percent of their income.
Between 2016 and 2048, thousands of units are expected to “exit” the Section 515 project.
This comes at a time when both demand for rentals and rents have increased significantly, leaving low-income renters, including mothers with children, the elderly and renters with disabilities, struggling to find decent and affordable housing.