HOUSING ASSISTANCE COUNCIL - 2022 RURAL HOUSING POLICY PRIORITIES
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HOUSING ASSISTANCE COUNCIL 2022 RURAL HOUSING POLICY PRIORITIES 2022WWW.RURALHOME.ORG
2022 Policy Priorities
For 50 years, the Housing Assistance Council (HAC) CHAPTER 1: CAPACITY BUILDING
has been the voice for the poorest of the poor in the
most rural places. Our deeply rooted work in The power of capacity building in rural communities
communities across the country informs our research cannot be overstated. Rural communities often
and drives our policy positions. Our independent and have small and part-time local governments,
non-partisan work with members of Congress, federal inadequate philanthropic support and a shortage of
agencies, affordable housing and community the specialists needed to navigate the complexities
development organizations, and other stakeholders of federal programs and modern housing finance,
ensures the most vulnerable rural populations – and compete for government and philanthropic
especially those in high-needs regions like the resources. Targeted capacity building through
Mississippi Delta, rural Appalachia, farmworker federal investments in training and technical
communities, the Southwest border colonias and assistance is how most local organizations build the
Indian Country – have improved access to safe and skills, tap the information, and gain the wherewithal
affordable housing opportunities. to do what they know needs to be done. Without
deeply embedded, high-capacity local
Rural America is home to about 20 percent of the U.S. organizations, available federal funding and other
population and covers more than 90 percent of the capital will never evenly flow to rural communities.
U.S. landmass. Small towns and rural regions are
diverse demographically and economically, and face a RCB and RCDI
wide array of local challenges and opportunities for The Rural Capacity Building (RCB) Program at the
developing their communities and housing. While U.S. Department of Housing and Urban
each place is unique, HAC has documented several Development (HUD) and the Rural Community
themes. Persistent poverty is a predominantly rural Development Initiative (RCDI) at the U.S.
condition. Habitable rural housing is in severely short Department of Agriculture (USDA) are two critically
supply. The adequate housing that does exist is often important capacity building programs that focus
unaffordable because rural incomes are low and run specifically on rural areas. These programs provide
well below the national median. Rural housing lacks local organizations with the training and technical
adequate plumbing and kitchen facilities at a rate assistance they need to serve their communities
above the national average. Overcrowding is not effectively. HAC supports increased funding for RCB
uncommon in some rural regions. Decades of and RCDI, new capacity building programs like the
stagnant rural house prices have denied owners the Rural Partnership Program, and the creation of a
wealth and mobility so often associated with buying a robustly funded federal rural housing intermediary.
home. And racial inequity is endemic as the result of
housing policies and banking practices that excluded Creative Placemaking
rural people of color. Complicating these challenges, a Arts and locally led design efforts are powerful
lack of reliable rural data obscures rural realities. drivers of economic resilience and growth for
underserved rural and tribal places, especially those
that have experienced a loss of economic diversity
In addressing these issues, HAC’s policy priorities are: and have historically been victims of extractive
industries. The Citizens' Institute on Rural Design™
1. Building the capacity of local affordable housing (CIRD) is a leadership initiative of the National
and community development organizations Endowment for the Arts, which seeks to enhance
deeply rooted in rural places; the quality of life and economic viability of rural
2. Expanding access to credit and safe, affordable America through planning, design and creative
lending in underserved rural communities; placemaking. HAC supports continued federal
3. Improving the overall quality, availability and funding for CIRD and for rural arts, design and
affordability of housing to buy and rent in small creative placemaking.
towns and rural places; and
4. Preserving, increasing and tailoring resources for
federal affordable housing programs serving rural
populations.
CHAPTER 2: ACCESS TO CAPITAL Secondary Mortgage Market
Small financial institutions in rural areas often
struggle to find access to the secondary mortgage
In recent decades, many rural regions have been
market and as a result they hold mortgage loans in
stripped of their economic engines, financial
portfolio. This limits the overall liquidity available in
establishments and anchor institutions. Added to
the community. The Federal Housing Finance
the shortage of federal and philanthropic
Agency (FHFA) has engaged in a variety of
investment, the result is that rural America faces a
rulemaking efforts to improve secondary mortgage
dire lack of access to capital. And it is in these rural
market access for underserved communities.
places where you can find the nation’s deepest and
Finalized in 2016, the Duty to Serve (DTS) rule
most persistent poverty. Without access to financial
requires the Government Sponsored Enterprises
services and capital, individuals cannot access safe
(Fannie Mae and Freddie Mac) to provide a more
credit and financial literacy resources, businesses
proactive secondary market for mortgages in three
cannot grow and serve the needs of their
focus areas: manufactured housing, affordable
communities and ultimately the communities'
housing preservation and rural housing. Progress
economies cannot thrive. The banking industry has
has been slow in achieving the true potential of
undergone considerable consolidation, with the
DTS, but it is a critical pillar of future rural access to
number of lenders insured by the Federal Deposit
mortgage capital. More recently, in 2021, the
Insurance Corporation (FDIC) dropping from
Enterprises were instructed to develop Equitable
approximately 15,000 in 1990 to fewer than 5,000 in
Housing Finance Plans to ensure racial equity is
2021. There are around 150 rural counties that have
proactively addressed in secondary mortgage
one or no bank branches to serve their residents.
market policy. Solutions are needed to adapt GSE
Building access to capital in underserved rural
structures to handle the volume, value and
regions is critical for the long-term viability of rural
appraisal challenges found in the rural mortgage
communities.
context. HAC supports the preservation and
Community Development Financial Institutions expansion of DTS requirements, and deliberate
consideration of rural conditions in all FHFA
Community development financial institutions
rulemaking.
(CDFIs) are private, mission-focused financial
institutions that offer responsible, affordable lending
Community Reinvestment Act
to low-income, unbanked and underserved people
As banks consolidate their physical branches and
and communities. For more than 30 years, CDFIs
financial services move online, careful consideration
have had a proven track record of making an impact
must be made to ensure that underserved rural
in the most high-needs rural regions. As banks have
areas are not forgotten. The Community
consolidated and pulled back from serving the
Reinvestment Act (CRA), adopted in 1977, requires
deepest pockets of poverty, CDFIs have stepped into
federally insured depository institutions to help
the breach and are working in rural regions and
meet the credit needs of their entire communities,
tribal areas across the country to address the
including low- and moderate-income
financial services needs of otherwise unbanked
neighborhoods. HAC supports CRA modernization
communities. HAC supports increased funding for
to ensure better function in the rural context.
the CDFI Fund and tailoring of CDFI Fund programs
to better target rural needs.
According to wikipedia,
an annual report is a
comprehensive report on
a company's activities
throughout the year
Photos: George Ballis
CHAPTER 3: RURAL HOUSING STOCK country. These homes were originally financed with
FHA-insured or direct loans and many are
Everyone deserves a safe, affordable home. Like in supported with Section 8 or other rental assistance
other parts of the country, housing affordability has contracts. Housing subsidy contracts are expiring on
become the biggest challenge facing rural residents. thousands of privately owned multifamily properties
Each community faces unique challenges and with federally insured mortgages, and physical
opportunities, but some themes can be found across repairs to the properties are overdue. HAC supports
lower-income rural regions, including: an aging and preserving HUD multifamily properties and
substandard housing stock, overcrowded conditions expanding access to Housing Choice Vouchers.
and limited rental stock.
Rural Homeownership
Rural Rental Preservation Homeownership rates in rural areas are higher than
Rental housing options in rural America are not only the national average. However, the incidence of
sparse, but also declining. Preserving existing substandard housing and aging housing stock is
affordable rental housing and engaging in new also significantly higher in rural communities. The
construction in areas where there is demand is critical unique needs of rural homeowners and
to foster economically viable rural communities. communities should be considered in federal
housing policy, including the importance of self-
USDA Multifamily Preservation help housing and manufactured housing as
An important source of housing in many rural affordable options for rural homeowners.
communities are rental homes financed by USDA.
Today, there are nearly 13,000 USDA rental properties Self-Help Housing
providing around 400,000 affordable homes to Affordable homeownership opportunities can
families and individuals across rural America. However, change the economic outlook of both families and
due to federal funding cuts, no new USDA direct- entire communities. Since its beginnings in 1996,
financed rental housing has been developed in years, HUD’s Self-Help Homeownership Opportunity
and the existing properties are increasingly losing Program (SHOP) has helped create more than
their affordability provisions. Once the mortgage on 35,000 homes, half of which are located in rural
the property matures, the units lose their rental areas. SHOP helps hardworking low- and moderate-
subsidy and thus their affordability. For many rural income families achieve homeownership through
communities, these units constitute the only sweat equity. SHOP funds pay for land and
affordable rental housing available. Significant federal infrastructure costs, which are often some of the
commitment is needed to address this rising crisis. most difficult items for local nonprofits to finance.
HAC supports increased funding for the USDA Section HAC supports increased funding for the SHOP
515 program to allow for new multifamily construction program.
to resume; increased funding for the Multifamily
Preservation and Revitalization (MPR) program, the Manufactured Housing
Preservation Revolving Loan Fund (PRLF) program, More than half of all manufactured homes are
and the Multifamily Preservation Technical Assistance located in rural areas around the country and
program, to address the preservation needs of the manufactured homes make up 13 percent of all
multifamily portfolio; the extension of rural rental occupied homes in rural and small town
assistance to all USDA multifamily units; and communities. In manufactured home communities,
improved protections for tenants in USDA properties many residents own their homes and rent the land,
that are being preserved. which can devalue the asset. Financing options for
manufactured homes are often limited and "lot
HUD Multifamily Preservation rent" can be predatory. HAC supports increased
Other non-USDA sources of rental housing are also protections and standard mortgage financing
critical for rural places. HUD oversees more than opportunities for families in manufactured housing
22,000 privately owned multifamily properties, and communities.
more than 1.4 million assisted housing units across the
USDA Direct Mortgage Loans Farmworker Communities
USDA’s Section 502 direct loan program, enables low- There are approximately 3 million migrant and
and very low-income rural residents to purchase seasonal farmworkers in the United States. These
homes with affordable, fixed-rate mortgages. The workers and their families disproportionately live
interest rate on a Section 502 loan can be as low as 1 below the poverty line in crowded and substandard
percent, and no down payment is required. Inability dwellings. HAC supports increased funding for
to qualify for market-rate credit elsewhere is a USDA's Section 514 and 516 programs, the only federal
precondition for obtaining a Section 502 direct loan – programs that provide affordable financing to
thus the program’s borrowers are homebuyers who purchase, construct, or repair rental housing
could not otherwise access homeownership if Section specifically for America’s farm laborers.
502 loans were not available. Over two million families
have become homeowners since 1950 through the Colonias
Section 502 direct program. In 2020, the average The border region between the United States and
income of Section 502 direct loan borrowers was Mexico is dotted with thousands of rural
about $37,400. Approximately 40 percent of the loans communities characterized by extreme poverty and
went to borrowers with very low incomes (50 percent severely substandard living conditions. These
of area median or less). Yet this is a loan program, not communities, commonly called colonias,
a giveaway; the funds are repaid to USDA, with overwhelmingly lack basic infrastructure. Poor
interest. Over the last few years, the total cost per loan housing conditions are common in the colonias with
to the government for a Section 502 loan has an old, deteriorating housing stock, combined with
averaged around only $10,000. HAC supports newer units that do not meet building codes. HAC
increased funding for the Section 502 direct loan supports updating the definition of colonias and
program. increasing targeted funds for colonias infrastructure.
High-Needs Rural Regions Lower Mississippi Delta
HAC’s mission includes a mandate to serve the rural The Lower Mississippi Delta has distinct economies,
poor, including the poorest of the poor in the most cultures, and even languages. With the legacies of a
rural places in the United States. Many of the poorest fading agricultural economy and the racist system
rural Americans live in what HAC designates as high which drove it, the region still endures a systemic and
needs regions or belong to vulnerable populations. long-term economic depression which stifles the
These regions and populations are Central quality of life for many of its inhabitants. HAC
Appalachia, the Lower Mississippi Delta, Native supports tailored federal efforts to improve housing in
American lands, colonias along the U.S.-Mexico the Lower Mississippi Delta, including addressing
border, and farmworkers. Special circumstances, non-traditional titles, heirs' property, and area median
especially around low area median incomes in these income challenges.
regions, must be deliberately considered in federal
policymaking. Central Appalachia
The Appalachians’ plentiful natural resources,
Tribal Lands including coal, natural gas, and timber, played a key
Native communities face many of the same role in the growth of the United States during the
challenges characteristic of other persistently poor 19th and 20th centuries and remain vital to the
rural areas, with the addition of some unique barriers nation’s economic well-being. In the present day,
around land status and access to financial services. however, the Appalachian region is more commonly
Often, traditional lenders will not lend in Indian known for its economic challenges. High poverty
Country because of the tribal trust land status and a rates, poor housing, and limited economic
lack of lender recourse options in many tribal legal opportunities have persisted for generations. HAC
systems. HAC supports reauthorization of the Native supports tailored federal efforts to improve housing in
American Housing Assistance and Self- Central Appalachia, including addressing non-
Determination Act (NAHASDA) and increased traditional titles, heirs' property, an aging housing
funding for tribal housing programs. stock, and area median income challenges.CHAPTER 4: FEDERAL RESOURCES not served rural areas proportionately. Additionally,
available data on rural areas is often partial and
Rural communities, and the people who live in them, inaccurate, making it difficult to define the true need.
have higher poverty and unemployment rates as well HAC supports the creation of a rural block grant
as a higher incidence of substandard housing when program at USDA, the application of the 10-20-30
compared to metropolitan areas. These persistent poverty formula to federal spending,
circumstances did not develop independent of public improvements to the tax code, rural impact and
policy. Policy decisions at all levels of government proportionality requirements in regulatory and
have inadvertently contributed to the challenges legislative efforts, and better rural data collection to
faced by rural areas. Federal resources for affordable better tailor federal programs to rural needs.
rural housing must be maintained and expanded in
order to meet the growing housing crisis across rural
America. And more broadly, the rural impact of all
federal housing and community development Rural Housing
programs should be analyzed to avoid unintended By The Numbers
disproportionate or negative impacts. Existing federal
housing programs are often ill-suited to the rural
context, and despite a proven track record of success,
47% of rural renters are
the USDA rural housing programs have been
chronically underfunded. housing cost burdened
Funding for RHS
Since the first USDA housing loan was made in the 365,000 rural homes lack
1950s, the agency has funded the construction, access to water, adequate
purchase or repair of over 5.1 million rural housing
plumbing, or a functioning
units. Rural Housing Service (RHS) loans, grants and
related assistance provide low-income families the kitchen
opportunity to achieve affordable homeownership;
provide affordable rental housing to families, the
elderly and migrant and seasonal farmworkers; 86% of persistent poverty
support low-cost home repair for an aging rural counties are located in
housing stock; and help create strong local housing
rural areas
infrastructure through capacity building. However,
like many rural solutions, the RHS programs have
suffered from a lack of federal funding and
challenges around modernizing and adequately On some Native American
staffing the agency. HAC supports robust funding for lands the incidence of homes
RHS programs, staffing and modernization needs in lacking basic plumbing is
order to ensure that programs are running effectively
over 10x the national level
and serving rural residents at the highest level.
Tailoring of Federal Programs
Often, federal housing programs are not well-suited 47% of rural homeowners
to function in the rural context. Capacity challenges own their home free and clear
make it difficult for rural places to compete for (without a mortgage),
funding with larger metropolitan areas. Programs like
compared to 36% nationally
the Low-Income Housing Tax Credit (LIHTC) and the
Community Development Block Grant (CDBG), which Source: Rural Data Portal
have been critical affordable housing resources, have
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