HAC Releases Research Brief Detailing Shrinking Section 515 Portfolio

Housing Assistance Council (HAC) released a new research brief detailing how USDA’s Section 515 Multifamily Housing Portfolio continues to shrink.

By The Numbers:

• 504 properties not identified for loan maturity exited the portfolio, departing earlier than the date of their final mortgage payment.
• Seven states (Nebraska, North Dakota, Michigan, South Dakota, Wisconsin, Indiana, and Iowa) lost more than 10 percent of their USDA Section 515 housing stock between 2021 and 2026. Michigan lost the most homes, with 2,072 housing units leaving the program between 2021 and 2026.
• States with the largest property losses are heavily concentrated in the Midwest and Upper Great Plains regions, where early Section 515 loans are now maturing.
• USDA estimates of annual property departures from Section 515 predict a sharp increase in program exits over the next few years, with exits expected to peak in 2040, potentially completely depleting the program by 2056.

The Bottom Line: The impending mass exodus of homes slated to leave the Section 515 portfolio will likely further strain the rural affordable housing supply in states all across the nation.