USDA’s Section 515 Rural Rental Housing program has produced more than half a million homes for low income families since its start in 1963. These communities are now facing the same pressures their more urban counterparts have over the last decade: aging facilities and owners who want to prepay their mortgages and convert the housing to market rate, displacing current residents. Preserving rural rental housing has become more and more urgent.

With this in mind, the National Housing Trust held its third annual roundtable discussion on preservation at the National Council of State Housing Agencies Spring Training. This year’s focus was rural preservation issues and was held in partnership with the Housing Assistance Council. More than 30 representatives from 16 state housing finance agencies gathered in Indianapolis to confront the challenges they face and share their successes in preserving existing affordable rural rental housing.

Despite challenges, affordable rural housing is being preserved. Clover Patch Apartments in St. Charles, Minnesota, a Section 515 property saved from market-rate conversion, is a case in point.

Clover Patch was transferred to a non-profit after the owner decided to prepay the mortgage. But the deal almost did not take place; it was quite a challenge for U.S. Rural Development to find a non-profit willing to take ownership. The reason: non-profits cannot currently receive administrative fees from Rural Development. This makes it challenging for smaller non-profits to get involved. The good news: H.R. 5039, the ‘Saving America’s Rural Housing Act’, currently being considered by Congress, makes it possible for non-profits to earn fees in such transactions. If we want to encourage non-profits to take on rural preservation, we must make it economically feasible for them to do so.

Clover Patch was eventually saved because a local non-profit, Three Rivers Community Action, and the Minnesota Housing Finance Agency developed a successful strategy to raise sufficient rehabilitation funds and overcome the financial obstacles. But the difficulties Three Rivers encountered in saving Clover Patch underscores the challenges of revitalizing Section 515 properties and the need to make saving rural housing much easier, simpler, and more rewarding.

Yashonia Mallory, president of the Galen Terrace Tenant Association, leaned into her task at last week’s groundbreaking celebrating the start of renovations at the 84 unit community located in Washington, D.C. She was joined by co-developers NHT/Enterprise Preservation Corporation and Somerset Development – who fronted the cash and worked closely with the group in crafting the redevelopment plan – and a community of lenders and supporters.

D.C.’s tenant first right of refusal legislation and the residents’ determination to save their homes opened the door to preserving this Section 8 property. But the assistance of many others was needed to make it happen. The Fannie Mae Foundation played a key role by providing funding to NHT/Enterprise to preserve properties like this in D.C. Direct funders include: Enterprise Community Investments, Inc., MMA Financial, DC Housing Finance Agency, DC Department of Housing and Community Development, Adams National Bank, the Federal Home Loan Bank of Atlanta, and Enterprise Community Partners, Inc.

Seriously run-down, Galen is getting a full-scale rehabilitation designed to make sure it remains top quality affordable housing for the long term. A newly built community center will include an office, computer center and space for other resident programs and activities. The residents are receiving a portion of the developer’s fee and ongoing cash flow to fund these programs.

There's only one national nonprofit in the country that focuses entirely on housing preservation policy, lending and development: the National Housing Trust along with its affiliated organizations the National Housing Trust Community Development Fund and NHT/Enterprise Preservation Corporation. The National Housing Trust is not alone. We work with many others to achieve solid preservation results. At the end of the day, whether we have spent time on Capitol Hill, closed on a loan, or purchased and renovated an affordable home, we are all about helping people stay in their homes.