Federal and State Collaboration is Working to Make Rental Housing More Affordable for Low-income Families

Ed Jennings, Jr. HUD SE Regional Administrator speaking Randal A. Gore, NC State Director USDA Rural Development

On February 29, 2012 in Raleigh, North Carolina the United States Department of Agriculture Rural Development (USDA-RD), Department of Housing and Urban Development (HUD) and North Carolina Housing Finance Agency (NCHFA) announced a partnership that will reduce regulatory burdens on affordable housing developers and owners. In turn, this partnership will enable state and federal agencies to better serve low-income rental families.

Officials with USDA-RD, HUD and NCHFA approved a Memorandum of Understanding (MOU) to align these Subsidy Layering Review requirements between the three agencies and streamline construction affordable rental housing. Developers of affordable housing that are awarded federal funding from multiple agencies are required to be compliant with multiple subsidy-layering reviews and inspections. These requirements may result in delays in property construction. 

"This initiative exemplifies how collaboration at the federal and state levels is working to eliminate burdensome requirements for our customers and after everything is said and done will work to better serve low-income rental families" said HUD Southeast Regional Administrator Ed Jennings, Jr.

Pictured (left to right), Bob Kucab, Executive Director, NC Housing Finance Agency; Ed Jennings, Jr., Southeast Regional Administrator, HUD; and Randy Gore, State Director, NC USDA-Rural Development.

"The purpose of this agreement is to reduce the regulatory burdens and cost on affordable housing developers and owners," said U.S. Dept. of Agriculture Rural Development State Director for North Carolina Randall Gore. "It makes sense for the three government agencies to work together, to better coordinate services and remove duplication."

In response to the White House's Domestic Policy Council request for better coordinated federal rental policy, USDA-RD, HUD and NCHFA worked together to align the often burdensome Subsidy Layering Review (SLR) requirements of different federal rental program for affordable housing. This alignment will increase communication between agencies, provide a "one-stop-shop" for development applicants, implement timelines to ensure expediency of reviews and simplify the application process, which will benefit owners, developers, tenants and local communities working to create and preserve affordable housing.

Historically, the issue of subsidy layering has been addressed differently by the United States Department of Treasury (Treasury), HUD, and USDA-RD. Subsidy layering is a HUD statutory requirement to assure that federal resources are neither duplicative nor wasteful when applied to affordable rental housing. These differences are reflected in the extent of subsidy layering analysis that the agencies require; ranging from USDA that relies on the Low Income Housing Tax Credit (LIHTC) review and does not require a formal subsidy layering analysis to HUD's multifamily HOME program, which has detailed guidance on how the analysis must be completed.

The MOU is an administrative solution that better aligns and utilizes state and federal affordable rental housing program policies.

"NCHFA is pleased to be part of this important initiative," said A. Robert Kucab, Executive Director of the North Carolina Housing Finance Agency. "The united effort by our three agencies will enable each of us to leverage our resources more effectively to produce the housing that is so greatly needed in North Carolina for families and seniors of low income."

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