The U.S. Department of Agriculture (USDA) Rural Housing Service (RHS) issued a Notice in the Federal Register on June 29 that describe policies and procedures for providing Rural Development vouchers in 2016. These vouchers are available only to low income residents of multifamily properties financed with a Rural Development (RD) Section 515 Rural Rental Housing loan that has been prepaid or undergone foreclosure prior to the loan’s maturity. There are $15 million available for FY16 (which ends September 30, 2016). Section 542 of the Housing Act of 1949 authorized the USDA to establish the demonstration Rural Development Voucher Program (RDVP) in FY06. RHS is an agency under the RD mission area.
The RDVP offers protections to eligible residents in Section 515 properties who encounter economic hardship when an owner prepays an RD mortgage or when an RHS action results in foreclosure. Prepayment or foreclosure before an RD loan’s maturity date ends RD affordable housing requirements and generally ends Rental Assistance (RA) subsidies. Consequently, rents may increase, making the housing unaffordable. Eligible residents have incomes less than 80% of the area median income. Residents may use a Rural Development voucher at the property or at any other rental unit in the nation, not just another 515 property.
Rural Development vouchers cover the difference between the market rent and a resident’s contribution toward rent on the date of prepayment or foreclosure. RD determines market rents in the housing market area prior to prepayment or foreclosure. Owners must be willing to accept a Rural Development voucher, and units must pass RD health and safety inspections.
Residents must submit a form requesting a Rural Development voucher within 10 months of prepayment or foreclosure. Once issued a voucher, residents have 60 days to find a home. RD may grant one or more extensions for up to an additional 60 days, and will extend the voucher search period beyond 120 days if a resident with a disabled family member requests an extension as a reasonable accommodation.
Except as detailed in the Notice, the RDVP requirements are generally based on HUD’s Housing Choice voucher regulations.
The Notice is at: http://1.usa.gov/292o1zk
More about USDA rural rental housing programs is on page 4-30 of NLIHC’s 2016 Advocates’ Guide at: http://bit.ly/294VglY