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RCAC Self-Help Builder News December 2011 Volume 4, Issue 4 >
National Rural Housing Coalition meeting
By Stanley Keasling, RCAC chief executive officer
The National Rural Self Help Housing Association (NRSHHA) met in conjunction with the National Rural Housing Coalition (NRHC) Washington, DC the week of November 28 to discuss issues of concern and to select new steering committee members. Brad Bishop joins Peter Carey to represent the western grantees on the NRSHHA steering committee.
One of NRSHHA’s major concerns is the “grandfather clause,” which exempts rural communities in metropolitan counties from the population limits that would otherwise apply. Until October 2012, communities that have historically been eligible for rural housing financing will continue to be eligible, but unless an extension of the grandfather clause or a new rural definition is adopted, communities with populations of more than 10,000 will no longer be eligible for rural housing programs. There are some 500 communities across the country that will lose eligibility.
There is no clear direction moving forward to solve this problem. NRHC tried to insert language into the appropriations bill that Congress recently adopted, but there was no support for its inclusion. Bob Rapoza reported that the last two times the grandfather clause was extended, the language was not introduced until after Rural Development had notified communities they would lose eligibility. With 500 communities at risk, we should feel comfortable that Congress will be motivated to fix this problem well before the October 2012 deadline.
As part of the NRHC meeting, Under Secretary Tonsager and Administrator Trevino came to meet with the coalition. According to the Under Secretary, they have proposed a consistent rural definition to be inserted in the Farm Bill for all Rural Development programs. It is rumored, but the Under Secretary could not confirm, that the definition would define all communities with a population of fewer than 50,000 as rural. There are a number of Coalition members that would object to such a huge expansion of eligibility under the Rural Development programs.
Appraisals continue to be a nagging problem for NRSHHA members and new housing developers generally. There was concern that some Rural Development appraisers will not use recent 502 sales as comparable properties in the appraisal process, meaning that they are using only distressed sales. There was clear national office support for using 502 sales as a comparable, so if organizations are having a problem in this area they should talk with our self-help staff about a strategy for getting some relief.
Finally, we were pleasantly surprised to learn that there was a carryover of $11 million in the Section 523 account. With the $30 million in new funding, this brings the total available funds to $41 million, which is more than anyone projected will be needed this fiscal year.