House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Hearing
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Chairman Aderholt, Ranking Member Farr and members of the Subcommittee, thank you for the opportunity to present the President's 2015 Budget for the
As the only
We also support the social infrastructure needed to make rural communities attractive to small business owners, employees and families. The Community Facilities program, also part of the RHS portfolio, provided assistance to construct or improve 195 educational facilities and supported 134 health care projects - part of more than 1,054 projects supported nationwide in FY 2013.
In FY 2015, the mission of the RHS remains unchanged. Through mortgage finance and refinance, as well as rental subsidies, we will continue to make housing opportunities available and affordable to rural Americans as they continue to work to ensure the security and prosperity of our Nation. I am proud to work for an agency that sees affordable housing as a conduit to family, neighborhood and community. We are making it possible for many rural families to get on the ladders of opportunity and into the middle class. For 2015, RHS requests total budget authority of
RHS is the only Federal agency that provides direct single family housing loans to very low- and low-income rural borrowers. The continuation of this program is essential to ensure the important populations the program serves can obtain affordable mortgage credit. Without these housing programs, it is possible many rural residents could be without a home and dependent upon other, more costly, assistance programs.
Some of our programs have grown significantly in recent years and that expansion has helped satisfy homeownership and community development aspirations across rural America. As we forge ahead in an era of tighter budgets, our success will be gauged not only by how many new loans we can provide, but by how well we continue to manage the program and portfolio risks associated with existing loan obligations. Careful monitoring of our portfolio and effective management of its risk has always been among our topmost priorities. We are grateful to
Since its inception the Rural Housing Service has compiled an extraordinary record of achievement that is etched as clearly in the lives of rural Americans as it is in the communities in which they live. The origin of the
Today the demand for our means-tested programs remains strong. In FY 2013, the combined
The Section 502 Guaranteed Loan Program has been the
The 2015 budget request proposes a continuation of the program level for the Section 502 Guaranteed Loan Program at
In recent years,
The Rural Refinance Pilot Program continues to grow and now serves homeowners in 34 States and
SFH Direct loans and housing repair grants are both funded at reduced levels for FY 2015. This again reflects an increase cost in the program for SFH direct and the emphasis within RHS on cost-efficiency as a determinant of program viability. The reduction in direct program lending will have little effect on overall single family housing lending because of the small program-size relative to the lower-cost guaranteed loan program.
The smaller SFH Direct program, serves very low- and low-income homeowners. The invaluable contribution of this program is most evident in the important populations it serves. While its absolute lending totals lag the SFH guaranteed program by a wide margin, on a relative basis the direct program serves proportionally more single mothers and more minorities, many of whom are among the very-low income borrowers the SFH guaranteed program can seldom assist.
At a requested program level of
Through the requested
RHS has continued to explore more cost efficient business models. We are undertaking numerous process improvement efforts, including the use of loan packagers to extend the SFH Direct program reach to more remote rural areas and Secretary Vilsack's electronic signature initiative to help realize in the near-term a "paperless" processing environment for guaranteed loan applications, commitments and guarantees. In addition, we are reengineering loss claims payment and Real Estate Owned (REO)/Foreclosure processes that will streamline business practices and eliminate operational redundancies both within and among States. These streamlining efforts not only entail meaningful cost and service benefits; they also reflect the Department's commitment to the "best-practices" approach that guides all of the Agency's operational improvements.
Multi-Family Housing Programs (MFH)
The 2015 Budget includes several legislative proposals to enable more flexible management of the rental assistance program. These proposals will enhance management capabilities and ensure the long term sustainability of the Rental Assistance program. They are designed to help our rental assistance program remain viable even when
These legislative proposals will also allow
Finally, the 2015 Budget also includes a re-proposal of legislation to gain authorities for
The 2015 budget request proposes
The budget request proposes
Community Facilities Programs (CF)
The Community Facilities budget request will provide financing for the construction and improvement of essential community infrastructure and facilities across rural America, including hospitals, schools, libraries, clinics, child care centers, and public safety facilities. The Budget proposes
In FY 2013, we invested over
The Budget proposes no funding for the CF guaranteed loan program, and the Economic Impact Initiative (EII) Grant program. The CF Guaranteed program originated as an inexpensive alternative to the direct loan program, designed to stimulate additional assistance to moderate income communities in rural areas. However, the defaults in the program have been much higher than originally projected, making it more expensive than the direct loan program. The direct loan program funding level, coupled with private public partnerships, will more than offset the effects of the guaranteed loan program termination. The regular CF grant program can also replace the EII grant program, which provides assistance to rural communities with extreme unemployment and severe economic depression.
Conclusion
As we consider the best way to position limited resources in 2015 to serve the complex needs of rural areas, we are confident that RHS will successfully implement the programs needed for a thriving rural America.
I appreciate the opportunity to testify before members of the Committee and with my distinguished colleagues from Rural Utilities Service and Rural Business Service. We work well together, collectively serving constituents, to further support American competitiveness and economic growth. This Budget supports our efforts and helps us fulfill the promise of rural communities. Thank you for your support of RHS programs. I am happy to answer your questions at this time.
Read this original document at: http://docs.house.gov/meetings/AP/AP01/20140404/102025/HHRG-113-AP01-Wstate-HernandezT-20140404.pdf
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