Missouri Reps. Cleaver, Luetkemeyer Introduce Bipartisan Bill to Modernize Rural Housing Programs

(Washington, D.C.) – RealEstateRama – U.S. Representatives Emanuel Cleaver, II (D-MO) and Blaine Luetkemeyer (R-MO) announced the introduction of the Rural Housing Service Reform Act. The bipartisan bill would enable the most significant modernization of U.S. Department of Agriculture (USDA) rural housing programs in years, helping to improve programs, cut red tape, and create and preserve affordable housing opportunities. Companion legislation has been introduced in the U.S. Senate by Senators Tina Smith (D-MN) and Mike Rounds (R-SD).

“All Americans desire a safe, affordable place for their families to live. The demand for affordable and decent housing remains high in rural towns like those across Missouri, but the supply has decreased” said Congressman Cleaver. “By cutting through red tape and encouraging public and private partnerships in these communities, we can increase investment in our nation’s rural housing supply and support families in these areas – which is precisely what our legislation aims to do. As senior leaders on the Financial Services Committee who are known for reaching across the aisle to deliver bipartisan solutions that benefit our communities, I’m hopeful that Congressman Luetkemeyer and I can usher this commonsense legislation through the House of Representatives and begin the process of lowering housing costs in rural America.”

“Owning a home used to be fundamental to the American dream, but it has become incredibly difficult and less realistic for Missouri families. I thank Congressman Cleaver for his dedication to remedying this issue, and I’m proud of our bipartisan work. Together, we can address the rural housing shortage, cut through burdensome red tape, and support Missourians,” said Congressman Luetkemeyer.

“The Local Initiatives Support Corporation is proud to support the Rural Housing Services Reform Act, since we’ve seen firsthand the hardship caused by losing affordable rental housing in rural communities. U.S. Department of Agriculture financed properties are often the only affordable rental housing in small towns and house some of our nation’s most vulnerable residents,” said Caitlin Cain, Vice President of the Rural Local Initiative Support Corporation. “The resources provided under this legislation will help preserve this critical housing stock while furthering tenant protections. We applaud Representatives Cleaver and Luetkemeyer for their commitment to rural America and leadership in affordable housing preservation.”

“Rural America is diverse—with unique assets, challenges, economies, and communities. But like most of America, rural households are increasingly facing housing insecurity and high housing cost burdens, while also grappling with more severely substandard housing conditions, a far too limited supply of suitable housing, and limited access to credit. BPC Action commends Reps. Blaine Luetkemeyer (R-MO) and Emanual Cleaver, II (D-MO) for working together to introduce the Rural Housing Service Reform Act of 2023. This bipartisan, bicameral legislation will make long-overdue updates and improvements to USDA Rural Housing Service programs so they can continue to support affordable rental housing and homeownership in rural communities across the country,” said Michele Stockwell, President, BPC Action.

“This bipartisan, bicameral bill will help preserve hundreds of thousands of homes for low-income renters funded through the USDA’s Section 515 program by removing outdated statutory requirements, increasing technical assistance availability, and expanding USDA staff capacity,” said Liz Osborn, Vice President of Policy at Enterprise Community Partners. “It will also help people across rural America and Tribal lands buy and stay in their homes, including by authorizing the USDA’s successful Native CDFI Section 502 mortgage relending pilot program. Thanks to Representatives Luetkemeyer and Cleaver for pushing forward these long-overdue, common-sense changes and additions to USDA’s programs to better serve low-income renters, homeowners, and affordable housing developers across rural America.”

“The Rural Housing Service programs at USDA are a powerful tool for small towns and rural places, with a suite of programs covering the spectrum from affordable rental to homeownership to capacity building. We applaud Congressman Luetkemeyer and Congressman Cleaver for their leadership in modernizing and streamlining these programs to better serve the modern rural context,” said David Lipsetz, President & CEO of the Housing Assistance Council. “This bill combines a slate of tested, commonsense improvements to the rural housing programs.  These changes will help USDA to more effectively serve rural and Tribal communities and, critically, will also address the multifamily preservation crisis that currently plagues USDA’s rural multifamily programs. We look forward to supporting the RHS Reform Act as it moves forward.”

“The National Rural Housing Coalition (NRHC)  is pleased to support the efforts of Reps. Luetkemeyer and Cleaver support federal rural housing programs and preserve affordable rental housing in rural America through the Rural Housing Services (RHS) Reform Act,” said Bob Rapoza, of NRHC. “There are some 400,000 units of USDA-financed rental housing in rural areas.  For many rural communities, this is the only affordable housing in town.  This housing is occupied by low-income households, with the majority occupied by elderly households and persons with disabilities. The RHS Reform Act ensures that the subsidies necessary to keep this housing affordable remain in place. Reps. Luetkemeyer and Cleaver deserve credit for addressing pressing rural housing preservation needs. We urge the 118th Congress to enact this important legislation.”

USDA investments in rental housing has historically been a critical source of safe, decent, and affordable housing in rural America. However, the affordability of tens of thousands of rural housing properties financed through the USDA are at risk due to prepayment or maturity of USDA-financed development loans in the coming years. In Missouri, nearly half of the residents at risk of losing affordable housing under the USDA 515 program between this year and 2030 are elderly – threatening their ability to age in place.

The Rural Housing Service Reform Act would take long overdue steps to address these concerns and modernize federal rural housing programs by:

• Fixing the longstanding problem for USDA Section 515 properties that were financed decades ago and now have maturing mortgages, making it easier for non-profits to acquire these properties and ensure that rental assistance doesn’t disappear when those mortgages mature. This provision will ensure that more than 15,000 rural housing units in Missouri remain affordable in the coming years.
• Updating the USDA’s outdated process of measuring incomes, bringing it in line with the Department of Housing and Urban Development’s (HUD) practices.
• Modernizing the USDA’s foreclosure process to eliminate red tape, better protect homeowners, and ensure USDA-owned properties remain affordable in the years to come.
• Updating the rules for a home repair loan program to streamline the process to receive smaller, home repair lending.
• Making long overdue investments in Information Technology so that USDA can process loans more efficiently, ensuring staff are spending more time reviewing applications and less doing paperwork.
• Making permanent the USDA’s pilot program to make mortgage loans available in Native communities by partnering with local CDFIs.

The Rural Housing Service Reform Act includes a modified version of the Strategy and Investment in Rural Housing Preservation Act led by Representative Cleaver and Senator Shaheen (D-NH). The Rural Housing Service Reform Act is endorsed by Housing Assistance Council (HAC), National Housing Law Project (NHLP), National Rural Housing Coalition (NRHC), Genesis Fund, National Affordable Housing Management Association (NAHMA), Enterprise, LISC, National NeighborWorks Association, Coastal Enterprises, Inc., National Low Income Housing Coalition (NLIHC), Bipartisan Policy Center, and D.W. Jones.

Official text of the Rural Housing Service Reform Act is available here.

Emanuel Cleaver, II is the U.S. Representative for Missouri’s Fifth Congressional District, which includes Kansas City, Independence, Lee’s Summit, Raytown, Grandview, Sugar Creek, Greenwood, Blue Springs, North Kansas City, Gladstone,?and Claycomo. He is a member of the exclusive House Financial Services Committee and Ranking Member of the House Subcommittee on Housing and Insurance.