Hundreds of thousands of rental units could age out of the USDA's Section 515 Rural Rental Housing program in the coming years unless the department pays to repair and update those properties. There are about 415,000 rental units available through the program today. "The program started in 1963 and has financed more than 533,000 apartment units in nearly 28,000 different developments," Jan Pytalski reports for The Daily Yonder. "The program supports mortgages for the builders of rental housing for very-low-, low-, and moderate-income families, elderly persons, and persons with disabilities. Those groups face the gravest danger. Once the properties that hold their units exit the program after being paid off by the owner, the individuals might find themselves unable to participate in the unsubsidized rental market."
Affordable housing can be scarce in rural areas, and 515 is one of the few affordable housing programs focused on rural communities. If the USDA doesn't invest in the program, rural residents could lose access to some of the few available units in their communities and be forced to move to another town or city, said Stephen Sugg, HAC's government relations manager.
The main problem is that mortgages on many Section 515 properties are nearly paid off. Once the loan ends, the property loses its Section 521 Rental Assistance. "Some properties are restricted to low-income use for a period of time after they leave the program. In instances where there is no restrictive use provision, owners may increase rents to levels their low-income tenants may not be able to afford," according to the HAC report.