Rural Development’s Section 538 Program and Obama’s New Budget Proposal

The U.S. Department of Agriculture (USDA) Rural Housing Service (RHS) is planning to meet regarding Section 538 program. Section 538 program is to designed to promote commercial financing of rural affordable housing for low and moderate income people. Through the 538 program, the USDA guarantees the loan provided by a bank instead of direct lending by USDA. One of the main topics of 538 program discussion is the impact on Low-Income Housing Tax Credit (LIHTC) program changes on Section 538 financing.
The new budget proposal by President Obama for FY2013 is $1.7 billion short of what is needed to renew the rental assistance under the three major housing programs according the Center on Budget and Policy Priorities (CBPP). The proposed renewal funding for Housing Choice Vouchers could be as much as $440 million short of the amount needed to renew all vouchers in use in 2012. The request by the public housing fund would not cover the operating and the repair of new capital expenses in 2013. Under the proposal, the Department of Housing and Urban Development (HUD) budgeted Section 8 funding is inadequate to provide 12 months of funding for all of its contracts.

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