USDA Allows State RD Offices to Reallocate Unused Rental Assistance

The USDA Rural Development (RD) office on May 24 published an "Unnumbered Letter" allowing state RD offices to reallocate unused rental assistance (RA) within their states without approval from the national office, reversing a policy in place since 2013 requiring state offices to return unused RA to the national office to be recaptured. NCSHA opposed the policy USDA established in 2013 and sought a change giving states the ability to use unused RA for other projects within the states, as the new policy allows.

As the letter states, unused RA is RA that has not been used in the last six months in Section 515 properties and the last 12 months in Section 514 properties. This means state offices will be authorized to transfer unused RA to preservation and other priorities within each state.

Unused RA does not include RA for properties with mortgages that have matured through normal payments or have been terminated by prepayment or foreclosure. RA for such properties will continue to be recaptured by the national office.

The letter also states that this policy is in effect on a trial basis for one year; USDA will determine before the trial period expires whether to extend it.

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