SECTION 515 RURAL HOUSING PROPERTY TRANSFER IMPROVEMENT ACT OF 2007 -- (House of Representatives - January 23, 2008)
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Mrs. CAPITO. Mr. Speaker, today I rise in support of H.R. 3873, the 515 Rural Housing Property Transfer Improvement Act of 2007, which would expedite the transfer of ownership of rural multifamily housing projects with loans made and ensured under section 515 of the Housing Act.
First, I would like to commend my colleague from New Hampshire (Mr. Hodes) for his dedication to rural housing issues and for the bipartisan way that this bill has come to the floor. I would also like to thank the chairman of the full committee. Since he's sitting there, I want to thank him.
The result of these bipartisan efforts is a bill that represents a sound approach to improving the administration of the Department of Agriculture's section 515 program.
Section 515 is a direct loan program administered by the USDA that provides low-interest loans to construct and renovate affordable multifamily housing. While this program has provided numerous benefits, as my colleague has enumerated, to low-income rural families, the process by which the USDA's State rural development offices considers requests to transfer ownership must be improved.
Section 515 owners may wish to transfer the project to other entities during the terms of their loan for a variety of reasons, including changes in owner circumstances or changes in local market conditions. Transfers of ownership in section 515 can be beneficial for all parties, as it presents an opportunity to recapitalize a project for better maintenance, rehabilitation and improved management.
Unfortunately, the transfer application process is time-consuming, and many of the rural development offices do not process these applications in a timely fashion simply because they are probably overwhelmed with the process. Certain RD offices have been slow in approving transfer requests, leading to a number of problems, including inaccurate appraisals and expiration of outside financing rate guarantees and bond and tax credit deadlines. This nonaction has been a major source of irritation for owners of 515s and groups representing section 515 tenants.
H.R. 3873 would fix these impediments by directing the USDA Secretary to streamline the application process, require applications to be processed within a timely deadline, and to transfer any applications not processed within that deadline to the Office of Rental Housing Preservation that would then have sole review authority.
Mr. Speaker, this bill was approved, as my colleague mentioned, by a voice vote in the Financial Services Committee and makes commonsense changes to section 515 that would improve the ownership transfer process.
I urge my colleagues to support this worthwhile measure.
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