Sustaining Rural Rental Housing - PowerPoint PPT Presentation

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  1. Sustaining Rural Rental Housing • Presented by Colleen Fisher October 14, 2008 Housing Colorado Now! Breckenridge, Colorado

  2. Housing Act of 1949 • Authorized the USDA to make loans to farmers to construct, improve, repair, and replace dwelling to their farm buildings • Over time the act has been amended to authorize housing loans and grants to rural residents in general

  3. Rural Definition: • An area with a population less than 50,000 inhabitants; For Section 515, it’s less than 20,000 • An area not contiguous and adjacent to areas to non-rural area (suburbs are not rural)

  4. Section 515 –Rural Rental Housing: • Direct loan program • Effective 1% interest rate • 50-year amortization • Original loan terms were 50 years • New loan terms 30 years w/ balloon

  5. Section 521 – Rental Assistance: • Rental Assistance program equivalent to project based Section 8

  6. Section 538 – Rural Rental Housing Guaranteed Program: • Loan Guarantees (construction, acquisition, rehab) • No Rental Assistance • Terms of loan (up to 40 years) • Rates of loans (30 years fixed) • Maximum rent – 30% of 115% • Average rent – 30% of 100%

  7. Characteristics of the Section 515 Portfolio: • 16,500 properties • 434,296 units • Average size is 27 units • Existing tenant base is 57% elderly • Average property age is 23 years; 2/3 over 20 years old • Average annual tenant income is $9,075 • 74% of units are covered by RA • 8% project based section 8 • 9% section 8 vouchers • 74% of households are female based

  8. Preservation Issues: • Aging portfolio • Aging GPs • Existing limited partners taxable phantom income • Average 515 loan balance is $25,722/unit • Average current rehab need is $26K • In order to fund 100% of the 20 year needs, average monthly reserve contributions would have to rise from $33 to $74; this would make no provision for unit upgrades • Mortgage Restructuring

  9. Challenges Facing Rental Rural Housing: • Emphasis on preservation • Need to make RD MPR Program permanent • Housing and Economic Recovery Act of 2008 • Tax Credits-Investment in Rural Complexes

  10. CARH Webmap • Search for Section 515 properties by state and county • www.carh.org