The USDA has rental assistance available for rural rental housing under Section 515 and farm labor housing under Section 514 and 516 of the Housing Act. This subsidy in rent is given to eligible owners of the above projects on behalf of their tenants.
Get to know this rental assistance for rural housing for very low and low-income families so they can continue to occupy affordable, decent homes in rural America.
Rural Rental Assistance 101
This rental assistance is a project-based subsidy prioritizing multi-family projects for tenants with low or very low income. The goal for them to pay rent that should not exceed 30% of their adjusted household income.
Under Section 521, USDA RD will pay the rent on behalf of these tenants to eligible property owners whose projects must (i) be financed using Section 515 or Section 514/516 loans, and (ii) established on a nonprofit or limited profit basis.
As of June 2016, there were 14,480 Section 515 and 514 projects with a combined total unit number of 434,317 according to Cityscape: A Journal of Policy Development and Research.
The 2017 paper presented data from the Rural Housing Service that administers multi-family and single-family loans for the period ended June 2016.
Based on this research, rural rental and farm labor (on-farm and off-farm) projects predominantly house families occupying 284,245 units. They are followed by the elderly with 137,465 rental units. The rest of the units have mixed occupants.
Out of these approximately 14.5K housing projects, 12,177 are authorized to receive rural rental assistance. This represents 283,307 rental housing units with subsidized rents.
Eligibility for Rental Assistance
These rental assistance payments, which form the difference between the tenant’s contribution or 30% of his/her adjusted income and the monthly rental rate, will go toward the project’s operating expenses.
Because these payments will go directly to the property or project owner, it is the property owner who will apply for this subsidy from USDA RD. However, tenants who are eligible to receive this kind of assistance may seek the property owner to secure it for them.
Eligibility of tenants occupying the rental units means having an income below 50% of the area median income ‒ very low income, or between 50% and 80% of AMI ‒ low income.
USDA RD will prioritize projects with very-low-income tenants. So for new housing facilities, the percentage of low-income tenants who are receiving assistance must reach 95%. On existing projects, the percentage of new tenants with very low income must be 75%.
Rental Assistance for Rural Housing
By income, Section 515 and 514 residents who are receiving rental assistance from the USDA and other federal agencies have reached more than half a million.
As of June 2016, there were 541,237 rental assistance recipients as broken down into:
- 447,783 of which are USDA Section 521 assisted residents.
- 51,317 are receiving HUD project-based Section 8 assistance.
- 33,350 are receiving HUD Housing Choice Voucher.
- 7,974 are receiving other public rental assistance/reduced rents.
- 633 are receiving other private rental assistance.
Homeownership may be an elusive dream for some rural residents but they can still live in a home that is safe, decent, sanitary, and affordable, too.