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USDA Rural Development Announces Passbook Savings Rate Change for Multifamily Housing

USDA Rural Development has announced a change in the Multifamily Housing Passbook Savings Rate. Effective January 1, 2025, the rate will be adjusted to 0.45%. What This Means for You This change will impact how asset income is calculated for net family assets. Property owners and management agents must use the new rate for all tenant certifications effective on or after January 1, 2025. Key Points to Remember: The new passbook savings rate is 0.45%. This rate will be in effect until the Department of Housing and Urban Development (HUD) publishes a new rate. The change impacts calculations for imputed asset income. For More Information Please refer to the full announcement on the USDA Rural Development website for detailed information and guidance. If you have specific questions about your property, please get in touch with your assigned Servicing Specialist. Stay Informed We encourage you to stay updated on USDA Rural Development announcements by subscribing to their updates.

A. J. Johnson Partners with Mid-Atlantic AHMA for December Training on Affordable Housing - December 2024

During December 2024, A. J. Johnson will partner with the MidAtlantic Affordable Housing Management Association for two live webinar training sessions for real estate professionals, particularly those in the affordable multifamily housing field. Following the webinars, AJ will review testable areas and in-person administration of the Housing Credit Certified Professional (HCCP ) exam. The following sessions will be presented: December 10: Intermediate LIHTC Compliance - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included, as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements for setting rents at a tax-credit property. This course contains some practice problems but is more discussion-oriented than the Basic course. A calculator is required for this course. December 11: Advanced LIHTC Compliance - This full-day training is intended for senior management staff, developers, corporate finance officers, and others involved in decision-making concerning how LIHTC deals are structured. This training covers complex issues such as eligible and qualified basis, applicable fraction, credit calculation (including first-year calculation), placed-in-service issues, rehab projects, tax-exempt bonds, projects with HOME funds, Next Available Unit Rule, employee units, mixed-income properties, the Average Income Minimum Set-Aside, vacant unit rule, and dealing effectively with State Agencies. Individuals who take both training days will be provided with study materials and a practice exam to assist in preparation for the HCCP exam, which will be administered on December 12. December 12: Review of testable areas and administration of the Housing Credit Certified Professional (HCCP ) exam (In-person exam in Richmond, VA). After two days of intensive and comprehensive LIHTC training, AJ will review program requirements and administer the HCCP exam in person. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA and is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

Impact of the Election on Affordable Rental Housing Production

While it is too early to predict with any certainty what the election of Donald Trump will mean for the affordable housing industry, we can make some assumptions based on the policy positions he has outlined so far. Trump s election will likely significantly influence the development of affordable rental housing in the United States. His administration s policies will likely focus on deregulation, immigration control, and using federal lands for housing development. Deregulation and Housing Development Trump has consistently advocated for reducing regulatory barriers to stimulate housing construction. He argues that excessive regulations increase construction costs and impede affordable housing development. By streamlining permitting procedures and relaxing zoning laws, the administration will encourage private developers to build more housing units, potentially increasing the supply of affordable rentals. Immigration Policies and Housing Demand The administration has linked housing affordability issues to immigration, suggesting that reducing the number of immigrants will decrease housing demand and, consequently, lower prices. This perspective claims that mass deportations could free up housing units, making them more accessible and affordable for American citizens. However, such measures may disrupt the construction industry, which relies heavily on immigrant labor, potentially exacerbating housing shortages and increasing costs. Utilization of Federal Lands Trump has proposed opening federal lands for large-scale housing construction, aiming to address housing shortages by increasing the availability of land for development. This initiative would create zones with reduced taxes and regulations to incentivize builders to develop affordable housing projects. While this approach could expand the housing supply, its effectiveness would depend on the implementation details and the willingness of developers to participate. Potential Challenges While the goal of these policies would be to increase the supply of affordable rental housing, they are likely to face several challenges: Labor Shortages: Immigration restrictions could lead to labor shortages in the construction industry, slowing housing development and increasing costs. Environmental and Community Concerns: Utilizing federal lands for housing will almost certainly encounter opposition due to environmental concerns and community resistance to large-scale developments. Market Dynamics: Deregulation alone may not ensure affordability. Developers may prioritize higher-end projects for greater profits, leaving a gap in affordable rental options. In summary, the incoming Trump administration s affordable rental housing development approach focuses on deregulation, immigration control, and leveraging federal lands. While these strategies aim to increase the housing supply and reduce costs, their success will depend on careful implementation and consideration of potential economic and social impacts.

USDA Proposes Mandatory Deed Recording Requirements for Section 538 Rural Rental Housing Program

The Rural Housing Service (RHS) of the U.S. Department of Agriculture has proposed a new rule requiring separate deed restrictions to be recorded for properties financed under the Guaranteed Rural Rental Housing Program (GRRHP). This proposed change aims to ensure affordable housing remains available for low and moderate-income households in rural areas even after mortgages are paid off. Key Changes The proposed rule would amend 7 CFR 3565.352(b) to require: A separate deed restriction must be recorded containing specific restrictive use language. The deed restriction must be recorded before other transaction documentation. The restriction must state that the housing will remain available for low- and moderate-income households for the original loan term. Background Section 538 GRRHP, administered under the Housing Act of 1949, provides loan guarantees for developing housing and related facilities in rural areas. While current regulations require properties to remain affordable for the original loan term, they don't specifically mandate recording a separate deed restriction. This has created a potential loophole: Restrictive use provisions could be released upon loan prepayment if only included in the mortgage or deed of trust. Significance The proposed change addresses a critical preservation issue. Without recorded deed restrictions: Affordable housing requirements could be terminated early through loan prepayment. RHS would have limited ability to enforce continued affordability. Rural communities could lose vital affordable housing resources. Implementation Details The rule would allow three exceptions to the deed restriction requirement if the RHS determines: There is no longer a need for low- and moderate-income housing in the market area; Housing opportunities for low-income households and minorities won't be reduced, or Additional federal assistance won't be needed. Public Comment Period Interested parties can submit comments on the proposed rule through January 6, 2025, via: Federal eRulemaking Portal (regulations.gov) Docket Number: RHS-24-MFH-0016 RIN: 0575-AD34 Contact Information For more information, contact: Tammy DanielsFinance and Loan AnalystMulti-Family Housing Production and Preservation DivisionRural Housing Service, USDAPhone: (202) 720-0021Email: tammy.daniels@usda.gov