President Biden’s proposed fiscal 2022 federal budget, released in long-awaited detail last week, proposes some increases but mostly level funding for rural housing programs in the U.S. Department of Agriculture. Programs in Housing and Urban Development, by contrast, and some other USDA programs would receive substantial increases.
This is a vastly different housing agenda from Donald Trump’s, who in each year of his administration proposed deep cuts and many outright eliminations for housing and other programs serving rural America. USDA’s rural housing programs would have been mostly eliminated. On a bipartisan basis, Congress, in all years of the Trump administration, declined to make those cuts.
USDA Programs
Most significant for USDA housing programs is the Biden request to boost Section 502 direct home ownership loans for low-income borrowers from $1.0 billion in 2021 to $1.5 billion in 2022. This program also received a separate new $657 million in the American Rescue Plan Act, passed earlier this year. The Section 502 guaranteed homeownership program, in which USDA insures private mortgages, would be increased from $24 billion to a loan level of $30 billion. Several of USDA’s rental housing programs would also receive small increases.
Several smaller but important low-income programs would receive level funding: farm labor housing loans and grants, homeowner repair loans and grants, rental housing direct and guaranteed loans, and housing preservation grants.
Many of these unique USDA housing initiatives are loans that are repaid to the federal government. For example, the Section 502 direct program between 1950 and 2020 has provided loans to help more than 2.2 million low-income rural families become homeowners.
While the Biden administration requested flat funding for many rural housing programs, the overall budget request boosts USDA funding by nearly 17%, according to Politico’s Weekly Agriculture newsletter. The increases focus on areas such as climate change and broadband.
HUD Programs
Its name may suggest otherwise, but the U.S. Department of Housing and Urban Development is a key funding source for rural and suburban areas as well as cities. The Biden 2022 budget seeks an overall 15% increase of $9 billion in HUD programs. Community Development Block Grants would get an increase of $300 million, and the HOME program would get an additional $500 million. These are two of HUD’s most important initiatives and are used extensively in rural areas and small cities. Other increases would include almost $5 billion for tenant-based rental assistance, over $500 million for public housing, $500 million for homeless assistance grants, and $76 million for Native American housing block grants. Last year President Trump’s budget proposed to cut HUD programs by $8.6 billion.
The Biden budget request now goes into the Congressional appropriations process, with final levels theoretically set for the beginning of the fiscal year 2022 on October 1. To follow the progress of these funding proposals, see the Housing Assistance Council’s and National Low-Income Housing Coalition’s tracking.
Joe Belden is based in Washington, D.C.
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