Section 515 Rural Housing

Program Summary and Purpose:

Nearly 30% of all rural households are affected by problems such as overcrowding, physical deficiencies, or high cost.  Section 515 is a program that creates affordable rental housing for low income residents of rural areas in the United States.  This type of housing is constructed by private developers who receive direct loans from the government to build new homes (or rehabilitate existing ones) for low income tenants.    Government loans for Section 515 housing are distributed yearly through a competitive process administered by the United States Department of Agriculture (USDA).  Since its inception in 1963, the Section 515 housing program has helped make possible the construction of more than 500,000 affordable rural rental homes.

Section 515 has seen major budget cuts in recent years.  According to the National Low Income Housing Coaltion (NLIHC), none of the homes participating in the Section 515 program have enough money to finance necessary repairs.  Whereas the program once built more than 30,000 units per year, it now builds less than 1,000.

Current Status:

The F.Y. 2010 Budget for Section 515 housing was increased by $16 million for new construction from the budget the year before. H.R. 4868 was referred to House committees on March 17th, 2010.  The bill was referred to the Committee on Financial Services and the Ways and Means Committee.

What Advocates Need to Know:

Advocates interested in supporting Section 515 Rural Housing should ask their legislator to support increased funding for the program.  Additionally, advocates should support the Housing Preservation and Tenant Protection Act of 2010 (H.R. 4868),  Section 542 preservation vouchers, and the Rental Preservation Revolving Loan Fund (PRLF).

The USDA’s Multifamily Rental Preservation Demonstration bill for 2011 was passed, increasing funding for most low-income rural housing programs, which includes Section 515 housing.

For More Information:

National Low Income Housing Coalition. 202-662-1530.

Housing Assistance Council. 202-842-8600.

National Housing Law Project. 510-251-9400.

U.S. Department of Agriculture.

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