On July 31, the U.S. Department of Agriculture (USDA) Rural Development (RD) sent letters notifying owners with Section 521 Rental Assistance (RA) contracts that expire in September that RA contracts cannot be renewed until fiscal year (FY) 2014 begins in October due in part to a shortage of FY 2013 RA funds. The letters explain that owners are permitted to defer payments of interest or principal to USDA, use funds in project reserve accounts, or obtain loans from other sources but they are not able to raise rents or evict tenants to make up for shortfalls. This short fall is ultimately expected to impact nearly 15,000 units in approximately 600 rental projects.

Click here to read the USDA RD letter.