The Rural Housing Service (RHS) published a notice in the Federal Register on June 29, 2016, titled “Rural Development Voucher Program.” The purpose of the notice was to inform the public of the general policies and procedures for the Rural Development Voucher Program (RDVP) for fiscal year 2016. Rural Development Vouchers are only available to low-income tenants of RD financed multi-family properties where the RHS Section 515 loan has been prepaid prior to the loan’s maturity date. In order for eligible tenants to participate, a voucher obligation form must be submitted within ten-months of the foreclosure or prepayment. In the event of a prepayment or foreclosure, RD will notify tenants of the availability of vouchers and how to obtain a voucher.
$15 million of RHS Vouchers will be made available to any low-income household (including those not receiving rental assistance) residing in a property financed with a Section 515 loan that has been prepaid after September 30, 2005. The amount of such voucher is the difference between comparable market rent for the Section 515 unit and the tenant paid rent for the unit. The RDVP is administered using the same rules as the HUD Housing Choice Voucher Program.
Low-income tenants in the prepaying property are eligible to receive a voucher to use at their current rental property, or to take to any other rental unit in the United States and its territories.
There are some limitations on the use of the voucher:
- The rental unit must pass an RD health and safety inspection, and the owner must be willing to accept an RD Voucher;
- The Voucher cannot be used for units in subsidized housing, such as Section 8 or public housing, when two housing subsidies would result; and
- The Voucher may not be used to purchase a home.
Tenant Eligibility
The tenant must meet the following requirements:
- Be residing in the Section 515 project on the date of the prepayment or foreclosure;
- Be a United States citizen, U.S. citizen national, or a resident alien; and
- Be a low-income tenant on the date of the prepayment or foreclosure, meaning their income may not exceed 80% of the area median income as defined by HUD.
If RD determines that a tenant is low-income, the tenant has ten-months from the date of prepayment or foreclosure to return the Voucher Obligation Request form and citizenship declaration to the local RD office. Failure to submit these forms within the required timeframe eliminates the tenant’s opportunity to receive a voucher.
The tenant receiving a Rural Development Voucher has an initial period of 60 calendar days from issuance of the voucher to find a housing unit. RD may grant one or more extensions for up to an additional 60 days, but no tenant may have more than 120-days to find a replacement unit.
Initial Lease Term
The initial lease term for the housing unit where the tenant wishes to use the voucher must be for one-year.
Inspection & Unit Approval
Once the tenant finds a housing unit, RD will inspect and determine if the housing standard is acceptable within 30-days of RD’s receipt of the HUD Form 52517, “Request for Tenancy Approval Housing Choice Voucher Program,” and the Disclosure of Information on Lead Based Paint Hazards. The inspection standard used for the RD Section 515 Program will be used for the RD Voucher Program.