Congress raises Fiscal Year 2018 funding levels for affordable housing programs
This week, Congress approved legislation to fund the federal government through Fiscal Year 2018, significantly boosting affordable housing and community development programs. Although behind schedule, the bipartisan appropriations bill represents a win for NAHMA, the affordable housing industry, and the communities we all serve. The “omnibus” raises both HUD and USDA affordable housing program funding levels and enacts key provisions to improve the Low-Income Housing Tax Credit (LIHTC) program.
Following months of spending negotiations – including a series of short-term stopgap measures and two temporary shutdowns – deliberations for the $1.3 trillion spending bill culminated in the Senate’s 65-32 vote early this morning, followed by the President’s signature this afternoon. The House vote on final passage was 256 – 167.
In addition to the affordable housing funding and policy provisions outlined below, the omnibus bill also extends the National Flood Insurance Program (NFIP) until July 31, 2018, and extends the U.S. Interagency Council on Homelessness (USICH) for two years.
Lawmakers now head into their Spring Recess and will return the second week of April.
LIHTC provisions in the Fiscal Year 2018 Appropriations Act
The FY18 omnibus bill includes two key provisions from the Affordable Housing Credit Improvement Act (
S. 548 /
H.R. 1661), a bipartisan bill that NAHMA strongly supports:
- 12.5 percent increase in Housing Credit allocation for four years
- Permanent authorization of income-averaging
The enactment of these provisions comes at a critical time: The country’s affordable housing crisis is expected to be exacerbated by the effects of a recently lowered corporate tax rate on Housing Credit investment. The increased credit allocation, which represents a 12.5% expansion for years 2018 – 2021 that can be extended beyond the fourth year, could help offset the any projected decline in Housing Credit equity.
In addition, income-averaging would be made permanent by the bill, allowing the 60% Area Median Income (AMI) ceiling to apply to the average of all units in a project, rather than each individual Housing Credit apartment. The adjustment allows for more flexibility to serve a range low-income households: Under the income-averaging option, Credit-qualified units could serve households earning up to 80% of AMI, which could offset lower rents of extremely-low and very-low income households.
NAHMA members have voiced strong support for the Affordable Housing Credit Improvement Act to lawmakers in Washington; the bill, spearheaded by Senators Cantwell (D-WA) and Hatch (R-UT), Representatives Curbelo (R-FL) and Neal (D-MA), and former Representative Tiberi (R-OH), strengthens and expands the Housing Credit program at a time when more than 11 million households across the country pay more than half of their income on rent.
Since its introduction last year, the Affordable Housing Credit Improvement Act has gained the support of more than 160 bipartisan Members of Congress. While there are other important provisions in the bill that NAHMA continues to support, the enactment of these key provisions is a critical step.
HUD – Fiscal Year 2018 Appropriations Act
With a roughly 10% agency-wide funding increase for HUD, the omnibus provides increased funding levels for nearly all of HUD’s affordable housing and community development programs. NAHMA welcomes the much-needed boost for Project-based Rental Assistance (PBRA) and other programs.
In particular, the bill includes new resources to help public housing address the backlog of capital repairs and new capital advance funding for both Section 202, Housing for the Elderly, and Section 811, Housing for Persons with Disabilities. The bill provides renewal funding for PBRA and Housing Choice Vouchers, while also funding new vouchers for veterans and people with disabilities.
In addition, funding is significantly increased for lead hazard initiatives, homeless assistance programs, and the HOME and Community Development Block Grant (CDBG) programs. Appropriators maintained funding for the Family-Self-Sufficiency program and for HUD’s Office of Fair Housing and Equal Opportunity, although the legislation prohibits HUD from directing local governments to take certain actions under the Affirmatively Furthering Fair Housing (AFFH) rule.
On the policy side, the bill more than doubles the Rental Assistance Demonstration (RAD) unit cap, pushes the sunset date to 2024, and allows for Section 202 PRAC Conversions (RAD for PRAC). The bill also omits the “rent reform” provisions sought by the Administration.
| Housing and Urban Development – Fiscal Year 2018 Appropriations Act ($ in millions) |
| HUD Affordable Housing and Community Development Programs |
FY17 Enacted |
FY18 Enacted |
Percent Change |
| Tenant-Based Rental Assistance |
20,292 |
22,015 |
+8% |
| Contract Renewals |
18,355 |
19,600 |
+6% |
| Project-Based Rental Assistance |
10,622 |
11,515 |
+8% |
| Housing for the Elderly (Section 202) |
502 |
678 |
+35% |
| Capital Advance |
|
105 |
New funding |
| Service Coordinators |
75 |
90 |
+20% |
| Supportive Housing for Persons with Disabilities (Section 811) |
146 |
230 |
+57% |
| Capital Advance |
|
83 |
New funding |
| Community Development Fund |
3,000 |
3,365 |
+12% |
| HOME |
950 |
1,362 |
+43% |
USDA Rural Housing – Fiscal Year 2018 Appropriations Act
In the FY18 omnibus, most of USDA’s rural housing programs also see an increase over Fiscal Year 2017 enacted levels.
In particular, the Section 515 Multifamily Direct loan program sees a significant increase at 14%, although the Section 538 Loan Guarantee program is maintained at its FY17 level. Section 521 Rental Assistance program sees a slight drop over last year; however, Section 521 Rural Housing Vouchers see a significant increase, with funding also preserved for the preservation demonstration.
In addition, the bill directs USDA’s Secretary to take certain steps to incentivize PHAs and non-profit entities to take over rental housing property ownership and preserve affordability.
| USDA – Rural Development Fiscal Year 2018 Appropriations Act ($ in millions) |
| RHS Programs |
FY17 Enacted |
FY18 Enacted |
Percent Change |
| Section 521 Rental Assistance |
1,405 |
1,345 |
-4% |
| Section 515 Rental Housing Direct Loans |
35 |
40 |
+14% |
| Multifamily Revitalization |
41 |
47 |
+14% |
| Preservation Demonstration |
22 |
22 |
No Change |
| Section 542 Rural Housing Vouchers |
19 |
25 |
+31% |
| Section 538 Loan Guarantee |
230 |
230 |
No Change |
