Why should you attend the 2016 Buyer/Seller Conference?
It’s simple; in rural areas throughout the country, there is an overwhelming need for both affordable and decent housing. The need for rental housing in these areas is even more critical. Poverty rates in rural areas are substantially higher than urban areas and many renters are simply unable to find decent housing that is also affordable.
Providing affordable rural housing has been a partnership between the public and private sectors. The United States Department of Agriculture (USDA), through Rural Development (RD), provides funding to private and nonprofit owners for multifamily rental housing in rural areas around the U.S. The primary USDA programs used to finance multifamily rental housing from the 1970’s to the present are the Section 515 Rural Rental Housing and Section 514 Farm Labor Housing loan programs. These programs are a cornerstone for affordable rural housing.
At the same time, most federally supported multifamily properties are 35+ years old and need modernization. These properties have suffered from federal funding shortages, as well as, statutory and regulatory barriers that make recapitalization difficult or impossible.
In 2002, RD estimated that 4,250 Section 515 properties with 85,000 units “will physically deteriorate to the point of being unsafe or unsanitary within the next 5 years.” At that time, RD estimated it would need $850 million to maintain just this portion of the portfolio and, that as much as, $3.2 billion will be required for portfolio-wide rehabilitation. Little progress has been made since 2002. Adjusted for inflation, the 2002 $3.2 billion is now $5 billion.
There are nearly 14,500 apartment communities all over the country containing almost 435,000 apartment units. The rents at these properties have always been restricted under the programs. In addition, 271,000 units have rent subsidy through the Section 521 Rental Assistance (RA) program. Like HUD’s Project-Based Section 8 program, the Section 521 RA program allows the program to assist the poorest of the poor, limits tenant rent to 30% of income but unlike Section 8, targets rural areas of the country. Without these properties and the associated rental subsidies, nearly 100,000+ rural Americans would be left searching for suitable affordable housing.
The earliest of these loans made in the 1970’s are beginning to mature, meaning the loans are reaching their payoff dates. Under current law, once an RD mortgage is paid off, the affordability restrictions and any associated RA goes away and owners are permitted to increase rents and treat the property like any market rate rental community. We are desperately trying to retain this needed housing in our portfolio and the 2016 Buyer/Seller Conference is a way for us to help bring together parties interested in doing just that.
As you can see, there is a lot to discuss and we have multiple National USDA RD, Rural Housing Service leaders attending the 2016 Buyer/Seller Conference.
- David Lipsetz, Associate Administrator for Rural Housing and Community Facilities
- Ingrid Ripley, Assistant Deputy Administrator, Multi-Family Housing
- Martha Hanson, Finance and Loan Analyst, Multi-Family Housing/Preservation and Direct Loan Division
Additional Featured Speakers Include:
- Colleen Fisher, Executive Director, Council for Affordable and Rural Housing
- Todd Fentress, CPA, Partner, Clark Schaefer Hackett
- Don Beaty, President, The Summitt Group
- Jeffrey Gates, President, T J Development, LLC
- Katrina Thompson, Attorney, Barnes & Thornburg LLP
- Kevan Biggs, President, Biggs TC Development
- Joe Alerding, Managing Director, Valbridge Property Advisors/Mitchell Appraisals, Inc.
- Mandi Chancellor, Rockwood Management Corp.
- Cindy Snider, Director of Properties, Biggs TC Development
- Will Eckstein, Director of Development, Greystone Affordable Housing Initiatives
- Ian Maute, Vice President of Development, Buckeye Community Hope Foundation
Don’t put it off another minute!
Click here to register today to attend the 2016 Buyer/Seller Conference. We look forward to seeing you at the beautiful French Lick Resort in French Lick, Indiana.
Click here to learn more about the French Lick Resort.