People have been talking for a long while now about the impact of Sequestration on everything from the Federal court system, to air control terminals, trains and affordable housing rent subsidies – and just about everything else. With respect to the financial year 2013 and potentially financial year 2014 Federal budgets, Sequestration could have an actual financial impact on expiring rent subsidy contracts. With respect to rural affordable housing properties receiving rental assistance from the United States Department of Agriculture (USDA) Rural Development Division, anywhere from 300-600 properties may be impacted. The Rental Assistance provides funds to cover the gap between rent affordable housing tenants can afford and the rent required to effectively operate the property to the standards of the affordable housing program. In many cases, Rural Development financing and Rental Assistance is leveraged with Low Income Housing Tax Credits (LIHTC) and other sources of financing which rely on the Rental Assistance to be financial viable and compliant. As such, this Sequestration issue could create a significant domino effect.
We have heard that letters went out from the national Rural Development office to impacted owners providing them with options. The Council for Affordable and Rural Housing (CARH) has been following this issue and working with its members. So if you are one of my colleagues in CARH and you received one of these letters, you should reach out to the CARH national office.