In accordance with the FY23 Consolidated Appropriations Act, USDA is directed to conduct a series of stakeholder meetings and provide a report to Congress on how decoupling of Section 521 Rental Assistance (RA) from Section 515 Rural Rental Housing mortgages would be implemented. A critical component of the Department’s report is the valued feedback from our industry partners. USDA Rural Development seeks stakeholder input on the implementation of “decoupling” as a tool to facilitate the rehabilitation and preservation of the Multifamily Housing (MFH) portfolio at the time of mortgage maturity.
By statute, when a Section 515 mortgage matures or is terminated, the property is no longer eligible to receive Section 521 rental assistance, adversely impacting residents and creating an elevated risk of loss of affordable units in the Section 515 portfolio. Between 2023 and 2033, approximately 137,000 affordable housing units will be lost due to maturing Section 515 mortgages, with a potential to lose approximately 333,000 units by the year 2050.
For owners willing to continue providing affordable housing upon mortgage maturity, the agency is currently limited to debt modifications and deferrals to keep the Section 515 mortgages in place, which enables the continued availability of RA. However, maintaining the Section 515 mortgage with currently available preservation tools may adversely impact the property by discouraging critical investments from other local, state, and federal sources or create a lack of equity for further recapitalization.
Decoupling is an important tool to preserve the affordability of the maturing Section 515 portfolio. It will allow for the continuation of the project-based RA to MFH tenants, who had an average annual household income of approximately $13,000 in Fiscal Year 2022, while also encouraging new third-party investment and recapitalization of the aging MFH portfolio.
Register for a Stakeholder Listening Session
Feedback from MFH stakeholders and industry partners is critical as the Agency prepares its report to Congress on ways to implement decoupling. To obtain feedback from a wide range of partners, Rural Development is conducting two in-person sessions and two virtual sessions in June and July.
In-Person Stakeholder Sessions
The in-person sessions will be held at conferences conducted by the National Council of State Housing Agencies (June 15) and the Council for Affordable and Rural Housing (June 27). For more information about registering for either of these conferences, please contact the conference sponsors:
2023 Housing Credit Connect — NCSHA
2023 Annual Meeting & Legislative Conference | CAR
Virtual Stakeholder Sessions
Rural Development is hosting two virtual sessions open to all stakeholders. Sessions will be held on July 19th and July 25th. Interested participants should pre-register. A confirmation notice will be emailed to registrants.
Virtual session #1: July 19, 2023
2:00 to 3:30 PM ET
MFH Decoupling Stakeholder Listening Session
Register: https://www.zoomgov.com/webinar/register/WN_S8IV8KZ2TjKU-v231VIXhA
Virtual session #2: July 25, 2023
2:00 to 3:30 PM ET
Register: https://www.zoomgov.com/webinar/register/WN_A7a3cdjgRy6D6xWguP24Qw
Agency Accepting Stakeholder Comments on MFH Decoupling
In addition to providing feedback during the in-person or virtual sessions, stakeholders may provide written comments to the agency on MFH decoupling until July 31, 2023. Comments may be submitted to Decoupling@usda.gov.
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