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Self-Help Builder News October 2012 Volume 5, Issue #3 >
USDA forgoes release of Section 515 Notice of Funding Availability
Reprinted with permission from Washington State Rural Developments, Volume 1, Issue 7, September 2012
Section 515 NOFA – The agency has decided to forego the release of the Notice of Funding Availability (NOFA) for Sec. 515 new construction projects. This decision not to fund new construction was due to the need to conform to the law as interpreted by the Supreme Court (Salazar v. Ramah), which stated that if agencies had outstanding contracts and sufficient appropriations, they must fund any of those contracts. Office of General Counsel (OGC) determined that the decision was relevant to the contracts, known as Rental Assistance Incentive contracts, entered into by the
Rural Housing Service to avert prepayment of Section 515 rental housing through offers of prepayment incentives to the project owners. Because of the Supreme Court's decision, Rural Development (RD) must change its priorities and use 515 appropriations to fund prepayment incentives (equity loans and Rental Assistance). Any limited funding left in the 515 program will be used to rehabilitate existing 515 housing, or facilitate the sale of USDA Rural Development inventory properties to owners adept at finding additional resources to revitalize the properties.
There is an urgent need for USDA Rural Development to revitalize its existing portfolio of aging rental housing.
Since the cost to rehabilitate our existing housing is less than the cost of new construction, the limited funding left in the 515 program will go further and in the time required, prior to fiscal year end.