Section 515 and the Ney-Ross Amendment

Some 60% of the residents of section 515 are elderly or disabled households. The average annual income of section 515 tenants is a little over $8,000.

In 1987, Congress enacted legislation to regulate rural rental housing principally financed under section 515 of the Housing Act. This legislation placed a low-income use restriction on section 515 and also established financial incentives to owners to maintain their properties for low-income housing.

The Ney-Ross Amendment to HR 3995 (the Housing Affordability for America Act) will modify the main provisions of the 1987 Act, effectively end the low-income use restriction and allow prepayment of section 515 loans. Estimates the units to lost range from 24% of the portfolio or about 100,000 units (GAO) to almost 300,000 units (USDA). Regardless, the Ney-Ross Amendment will result in the displacement of thousands of rural families as owners prepay their loans and get out of the program.

There is a significant shortage of affordable housing in rural America. In many small town and farming communities, the only adequate affordable rental housing is the section 515 projects.

According analysis of 1995 American Housing Survey data:

  • 33 percent of all rural renters are cost burdened, paying more than 30 percent of their income for housing costs;
  • Almost one million rural renter households suffer from multiple housing problems; and
  • Of these households with multiple housing problems, 90 percent are severely cost burdened, paying more than 50 percent of their income for rent; 60 percent pay more than 70 percent of their income for rent.
Because of the limited availability of decent affordable housing in rural areas, the tenant protections in are inadequate. In many instances, the vouchers authorized for tenants displaced under the Ney-Ross Amendment will be of little use if there is no other housing available in the community and the population of section 515 -- predominately elderly and disabled is not mobile. Finally, the Ney-Ross Amendment only authorizes the use of vouchers and does not provide additional appropriations.

In recent years Congress and the Administration have unwisely reduced funding for rural rental housing and, therefore, made it more difficult to provide adequate incentives to preserve rural rental housing. However, this lack of funding does not justify the displacing low-income rural residents, including many disabled or elderly households.

National Rural Housing Coalition
1250 Eye Street, NW, Suite 902
Washington, DC 20005
E-mail