CARH'S BROADCAST E-MAIL - Regulatory Alert - April 19, 2013
This week Rural Development (RD) began informing borrowers of its plans for Rental Assistance (RA) as the Agency implements recent budget cuts. These cuts are a result of the sequestration contained in the Budget Control Act of 2011 and the additional 2.77 percent cuts affecting USDA's discretionary programs contained in the March 26th Continuing Resolution.
Currently, RD will renew RA contracts as they expire. However, at some point before the end of the fiscal year, RD has indicated that it is very likely that RA funding will run out. At that point, RD plans to work with borrowers "to mitigate the effects of these cuts," which may include use of the special servicing authority contained in RD regulations. Among other things, this authority allows RD to approve rent changes or revised budgets mid-year, provide occupancy waivers to high vacancy properties, approve special note rents, enter into workout agreements that may include a period of reduced payments on RD debt, or re-amortize or write down RD loans. RD should know more by late June or July regarding its ability to fund all RA contracts.
CARH will keep members apprised of the issue through additional broadcast emails. We would also ask that CARH members keep the national CARH office appraised of any delays with RA payments or contract renewals. Sessions at CARH's Annual Meeting and Legislative Conference in June will focus on the impact and implementation of the sequestration on rural housing programs.
Please contact the CARH national office at firstname.lastname@example.org or 703-837-9001 should you have further questions.
Posted in: USDA