MBA Letter Cites Concerns over Proposed Rural Housing Service Reorganization

The Mortgage Bankers Association, in a letter to the U.S. Department of Agriculture, expressed concerns over a proposed reorganization plan it said would diminish the effectiveness of Rural Housing Service programs.

The June 12 letter, in response to a USDA request for feedback over its proposed reorganization, said eliminating the position of Under Secretary for Rural Development and placing these agencies under direct oversight of the Secretary of Agriculture could compromise the RHS mission to rural communities.

“While MBA greatly appreciates the stated intention of this proposal to elevate the stature of the RHS, we are concerned that, in practice, such a change could diminish its influence both within the Department and with outside stakeholders, making it more difficult for the RHS to effectively carry out its vital mission,” wrote MBA Senior Vice President of Residential Policy and Member Engagement Pete Mills.

The letter noted rural communities in the United States face unique struggles in developing and maintaining safe, high-quality, affordable housing. “In many rural areas, the more limited availability of certain financial products, including mortgages, only exacerbates the negative effects of unemployment and poverty rates that are persistently higher than national averages,” MBA said.

MBA said lack of a dedicated Under Secretary overseeing RHS would likely cause it to be underrepresented in the policy planning processes at the most senior levels of the Department.

“In such a scenario, the Secretary and other Department leaders would be deprived of a valuable resource with expertise in the intricacies of the housing finance system,” MBA said. “And while RHS officials may have direct access to the Secretary, it is unclear that they would have the frequency of access to, and communication with, the Secretary as do Under Secretaries representing other parts of the Department.”

MBA added the lack of a dedicated Under Secretary with housing expertise would also likely have negative effects on the RHS’ relationships with outside stakeholders. “The loss of an important public representative for the agency could harm certain outreach efforts, including those related to educating the public and rural communities that could benefit from RHS programs and services,” the letter said. “The Under Secretary for Rural Development also serves as an important liaison to Congress, particularly when representing the agency during congressional hearings. Because Congress determines RHS funding levels and provides authorization for RHS programs and services, without an Under Secretary overseeing the agency, the RHS would be left without a key voice to further its interests and operations.”

Should the proposed reorganization be implemented, MBA recommended USDA ensure that RHS is provided with necessary resources, including appropriate funding and staffing levels, “to continue carrying out its programs and services in a high-quality manner.”