2019 President's Budget Rural Housing Service Contents Purpose Statement................................................................................................................................... 29-1 Rural Community Facilities Program Account Appropriations Language and Explanation of Changes....................................................................... 29-6 Lead-Off Tabular Statement................................................................................................................ 29-7 Project Statements............................................................................................................................... 29-8 Justifications........................................................................................................................................ 29-10 Geographic Breakdown of Obligations and Staff Years...................................................................... 29-12 Classification by Objects..................................................................................................................... 29-17 Rural Housing Insurance Fund Program Account Appropriations Language and Explanation of Changes....................................................................... 29-18 Lead-Off Tabular Statement................................................................................................................ 29-19 Project Statements............................................................................................................................... 29-20 Justifications........................................................................................................................................ 29-22 Geographic Breakdown of Obligations and Staff Years...................................................................... 29-26 Classification by Objects..................................................................................................................... 29-31 Rental Assistance Program Appropriations Language and Explanation of Changes....................................................................... 29-32 Lead-Off Tabular Statement................................................................................................................ 29-34 Project Statements............................................................................................................................... 29-35 Justifications........................................................................................................................................ 29-37 Geographic Breakdown of Obligations and Staff Years...................................................................... 29-39 Classification by Objects..................................................................................................................... 29-40 Multi-family Housing Revitalization Program Account Appropriations Language and Explanation of Changes....................................................................... 29-41 Lead-Off Tabular Statement................................................................................................................ 29-42 Project Statements............................................................................................................................... 29-43 Justifications........................................................................................................................................ 29-45 Geographic Breakdown of Obligations and Staff Years...................................................................... 29-46 Classification by Objects..................................................................................................................... 29-47 Rural Housing Assistance Grants Lead-Off Tabular Statement................................................................................................................ 29-48 Project Statements............................................................................................................................... 29-49 Justifications........................................................................................................................................ 29-51 Geographic Breakdown of Obligations and Staff Years...................................................................... 29-52 Classification by Objects..................................................................................................................... 29-54 Mutual and Self-Help Housing Grants Lead-Off Tabular Statement................................................................................................................ 29-55 Project Statements............................................................................................................................... 29-56 Justifications........................................................................................................................................ 29-58 Geographic Breakdown of Obligations and Staff Years...................................................................... 29-59 Classification by Objects..................................................................................................................... 29-59 Status of Programs.................................................................................................................................. 29-60 Summary of Budget and Performance Summary of Budget and Performance ................................................................................................ 29-70 RURAL DEVELOPMENT HOUSING PROGRAMS Purpose Statement The Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994 established the Rural Housing Service (RHS)1 with the direct mission to improve the quality of life in rural areas. The agency is comprised of three program areas: (1) Single Family Housing (SFH), (2) Multi-Family Housing (MFH), and (3) Community Facilities (CF). RHS delivers both housing programs authorized by the Housing Act of 1949 (Housing Act), as amended and the Cranston-Gonzalez National Affordable Housing Act of 1990, and community facilities programs authorized by the Consolidated Farm and Rural Development Act of 1972, as amended. In section 2 of the Housing Act, Congress outlined its Declaration of National Housing Policy which stated, “The Congress declares that the general welfare and security of the Nation and the health and living standards of its people require housing production and related community development sufficient to remedy the serious housing shortage, the elimination of substandard and other inadequate housing through the clearance of slums and blighted areas, and the realization as soon as feasible of the goal of a decent home and a suitable living environment for every American family, thus contributing to the development and redevelopment of communities and to the advancement of the growth, wealth, and security of the Nation.” In response to this Congressional mandate, RHS strives to improve the quality of life and invigorate local economies in rural America by: 1) providing decent, safe, and affordable housing, and 2) developing community infrastructure. In partnership with nonprofits, Indian tribes, State and Federal government agencies, and local communities, RHS provides technical assistance, and loan and grant funds to assist rural communities and individuals. Authorization and Program Descriptions RHS offers a SFH program for individual homeownership, a MFH program which offers rental housing for rural communities across America, and a CF program which provides affordable funding to develop essential community facilities in rural areas. Programs do not require annual reauthorization and funding is provided through yearly Congressional budget appropriations. Funding can be one year, no year or multiple years, depending upon the program. RHS programs include: Section 502 SFH Guaranteed Loan Program. Authorized in 1990 by the Cranston-Gonzalez National Affordable Housing Act, this program provides low- and moderate-income borrowers access to mortgage credit by guaranteeing loans issued by agency-approved private sector lenders. By providing government guarantees of 90 percent of the loan principal, the government encourages private sector lenders to offer mortgages to rural residents with repayment ability and household incomes of up to 115 percent of the area median who would otherwise be unable to obtain credit. Loans may finance the full construction and acquisition cost of a property up to 100 percent of the appraised value, and the loan amount may include the guarantee fee. Mortgages have 30-year terms with fixed rates negotiated with the lender that cannot exceed an agency-determined cap. Financing may also be used to refinance existing USDA guaranteed or direct loans. The program maintains its neutral or slightly negative subsidy status through guarantee and annual loan fees. Section 502 SFH Direct Loan Program. Authorized by the Housing Act of 1949, as amended, fixed-interest direct loans are available to low- and very low-income families unable to obtain credit elsewhere to purchase, build, repair or renovate, modest homes in rural areas. The standard loan term is 33 years; however, 38-year loans are available to borrowers unable to afford a 33-year repayment structure. Program-eligible, credit-worthy borrowers may obtain 1 Other applicable legislation: Consolidated Farm and Rural