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The Council for Affordable and Rural Housing (CARH) held its annual mid-year meeting from January 26-28 in Islamorada, Florida. Here is a summary of the sessions held during the three-day conference.
Day 1
The first day of the conference is made up mostly of committee meetings, which are well attended.
State Affiliated Association Committee
1. Welcome & Introductions
2. Meetings Reports on 2025 Fall Meetings
- Upcoming meetings scheduled for 2026
- Speaker recommendations
3. Update to Committee Recommendations to the Board from the June 2025 Meeting:
- Continue to encourage RD and Congress to find IT development to support multifamily housing programs.
- Encourage agencies to bring back harmonization efforts to simplify the process whereby customers using federal government resources would not need to resubmit the same information for multiple agencies and would be able to access needed information in one place.
- Encourage local RD to come to state meetings and restart local trainings.
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CARH to draft a letter to the national RD with a list of upcoming state meetings that would like to have representatives from RD to speak/attend (either in person or virtually).
4. Other Concerns/Issues
5. Recommendations to CARH Board of Directors
After introductions around the room, each state organization reported on activities, conferences, and trainings happening in their state. Wisconsin held its fall conference on October 22, 2025, in Wisconsin Dells, WI. Speakers and topics included US Housing Consultants, Mental Health Issues, Washington Updates with Colleen Fisher (CARH Executive Director), Overview of Stand-Alone Rental Assistance (SARA), lease update and real estate law changes, Wisconsin Housing & Economic Development Authority (WHEDA) financing tools, and the WHEDA Foundation Grant program. The Badger State Housing Alliance was introduced as a group following state housing legislation. A final session reviewed federal funding and resources for affordable housing. A spring training will be held April 22-23, 2026, in Madison, WI, with Fair Housing and HOTMA being the topics. The fall conference is scheduled for November 4, 2026, in Wisconsin Dells, WI.
Indiana holds a multi-day conference each year. Topics included fire safety and inspections led by a fire chief of a municipality, artificial intelligence for managers, and a property insurance session. The Carolinas association held discussions on insurance and HOTMA. Alabama discussed property insurance issues, maintenance training, and fair housing training provided by the E & A Team. Florida provided attendees with Home Depot HD maintenance training, a review of their lease, and the keynote speaker was Jan the Work Lady.
The Texas association had Karissa Stiers from RD via Zoom. Michigan also had Karissa Stiers speak on RD topics via Zoom. The Michigan association used an association agency called GAP to arrange their conference, fees, and general organization. Mississippi held their conference in Biloxi and also provided fair housing training at 10 separate locations around the state to accommodate its members. Joe Henry was the speaker. April is fair housing month. Indiana has held several webinars of one hour duration, promoted as fireside chats to discuss housing topics. Each state association briefly discussed its scholarship programs. Alabama leads the way with sixty scholarships per year. They have a separate foundation and a separate board to handle this activity. CARH reminded state representatives that the CARH scholarships are now submitted online.
Best Practices and Education Committee
1. Welcome and Introductions
2. Best Practices - CARH member-company best practices
- Employee retention
- Resident relations
- Administrative cost-cutting
3. Training Options through CARH Members
4. Update to Committee Recommendations to the Board from the June 2025 Meeting: Encourage RD to have non-executive level staff attend state-affiliated association meetings - specifically the staff that services that state. If unable to attend in person, ask RD to push for attendance of the servicing staff to attend training or participate in sessions via Zoom or other internet conference service. (This is a recurring recommendation. Over the last year, there have been several state meetings where RD regional staff have attended meetings.)
5. Other Concerns/Issues
6. Recommendations to CARH Board of Directors
Employee retention was discussed. The owner in Indiana provides awards to property managers throughout the year. Quarterly bonuses are extended if maintenance is caught up and tenant certifications are sent in on time. Maintenance can earn a bonus if a unit is turned over and ready to lease in seven days or less. Management companies have gone to virtual trainings. Wages for property managers ranged from $26.00/hour to $18.00/hour. Maintenance averages $30-$33.00/hour. It is harder to find maintenance personnel, who used to be recently retired handyman, mechanics, etc., wanting part-time work to fill retirement hours, but are now harder to find. The Ohio company has a 30% turnover in personnel yearly, and offers few benefits on their mostly RD portfolio. The website has become the best recruiting tool for most companies. Florida management companies will have monthly Zoom calls with all managers/maintenance. Training was discussed, and several training firms were in attendance. HD Supply can do in-person trainings and has a library of online webinars, and training is at no charge. Spectrum Training (Steve Rosenblatt) does all training online. This is their 40th year, and they are planning a celebration August 26-28 in Portland, Maine. Zeffert provides in-person and online trainings. Applying the HOTMA rules has been the main request. The E & A Team provides accessibility and fair housing training, both live and online. Sessions can be recorded for new employees. US Housing Consultants were not present. The new reserve account policy of RD was discussed briefly.
Lenders Committee
1. Welcome and Introductions
2. Section 538 Program
- 50-year amortization
- Increase in the Loan-to-Cost ratio to 85%
3. Impact on Possible Changes to GSEs’ Operations
4. Underwriting and Lending Issues
5. Update to Committee Recommendations to the Board from June 2025 meeting: For the Section 538 program, continue to advocate for 50-year amortization (including lining up a conversation with the Government National Mortgage Association (GNMA).
- Increased the Loan-to-Cost ratio from 70% to 90%, and
- Reduced Debt Service Coverage Ratio (DSCR) from 1.15 to 1.11.
- All of these are documented in the CARH letter sent to Secretary Rollins on March 28, 2025.
Continue to advocate for the suggestions made by the Rural Multifamily Lenders Council (RMLC) surrounding task delegation to lenders, to relieve the burden on the RD workforce plagued by the RIF, which will reduce bottlenecks and speed up review/approval times.
6. Other Concerns/Issues
7. Recommendations to CARH Board of Directors
Chris Mullen of Bonneville Multifamily Capital led the discussion. Rural Development fees on guaranteed 538 loans have been reduced. Other incentives to ramp up the use of the 538 loan product were discussed. $400 million guaranteed loan authority continues to be allocated, but less than 50% utilized. A 50-year amortization on loans (program allows 40 years currently) is still being pushed. Discussions are ongoing with Ginnie Mae to raise the loan-to-cost value to 85% (currently at 70%), which would help with transactions that are considered workforce housing. Approaching Ginnie Mae first for approval before approaching RD. A proposal was discussed to raise the $6,500/unit limit on rehabs eligible for refinancing. The $6,500 limitation has not changed in years. RD development fee caps of 15% for rehab and 8% for acquisitions were discussed. The Rural Multifamily Lenders Council (https://www.rmlc.org) is made up of the majority of the 538 lenders nationwide.
Development fees are an administrative/regulatory issue, not in the statute, and mainly affect portfolio deals. Since the November 2025 shutdown and reopening, there has been a lack of response on processing, and checklists are being changed without notice. Review times have been excessively slow. The HUD process is worse, with fewer people. NEPA environmental regulations were discussed. Categorical exclusions need to be expanded, especially on 515 transfers. 1924 Instruction needs updating. Appropriate for new construction, not needed for rehabs. Subordination agreements continue to be an issue. Dan Rogers has been temporarily reassigned. Question raised as to who is running the program? Can Administrator George Kelly change the process?
Management Committee
1. Welcome & Introductions
2. Operational Issues:
- Budgets for Properties
- Retaining & hiring staff
- Insurance costs
3. Rental Assistance Needs/Issues – RD and HUD
4. Management Fees: Formation of Management Fee Subcommittee
5. New Replacement & Reserve Process
6. Physical Inspections: Possible MOU to Reduce the Number of Inspections on Properties Per Year Due to Multiple Funding Sources
7. Update on Committee Recommendations to the Board from the June 2025 meeting:
- Encourage RD to issue Rental Assistance for all RD units. This action would help provide affordable housing for more low-income families in rural communities and improve the utilization of units.
- Until RA can be provided for all units, encourage RD to establish a budgeting mechanism to offset revenue losses when Housing Authority payment standards are lower than the Basic Rent for tenants with Section 8 tenant-based vouchers in non-RD subsidized units. Currently, the shortfall between the voucher rent and Basic Rent is paid from the owner's Return to Owner (RTO). As RD rents have increased to CRCU levels or near, this issue has become more common in our non-assisted units.
- Continue to request that owners be permitted to resize replacement reserve deposits of up to $600 per unit per year (PUPY) without the need to submit a Capital Needs Assessment (CNA) and rent comparability study to support the request. Most projects under development size reserves to this level, as it more accurately reflects current labor and material costs.
Continue to urge RD to revoke the CARES Act requirement that owners/agents provide a 30-day notice before filing for eviction.
Encourage RD to issue updated Management Fees no later than June 30 each year to better align with property budget cycles.
Recommend that RD allow owners/agents to conduct a complete utility analysis with usage data once every three years, with utility allowances adjusted using OCAF in years two and three. The administrative burden of gathering information for the annual utility analysis has increased significantly. Most Public Utility Districts (PUDs) now require signed releases from tenants for each request (rather than accepting a release that authorizes data retrieval for the duration of the tenant's residency in the unit) and often fail to provide the usage data on time, causing delays.
Request clarification from RD on where the RA goes when properties exit and how RA assignment is determined, since it appears to be inconsistent across the RD portfolio.
Encourage RD to explore the possibility of reduced rents for non-RA units. In addition to helping to attract HAP voucher holders, it may help in finding applicants without vouchers, but who could pay a reduced basic rent amount.
8. Other Concerns/Issues
9. Recommendations to CARH Board of Directors
Discussion: Budgets had pushed back this year on rent increases and costs. Staffing and management companies are competing with retail hourly wages now, the same all over the country. Insurance costs in budgets have been 25% higher for all insurance, including property, general liability, workman’s comp, and more.
Rental Assistance: Make a suggestion that RD focus on the chronically vacant units. The comment was made that MINC was not set up initially to handle SARA contracts. RD is pulling RA on some units that show over-income on units.
Management's fees: No increase for 2026. RD thinks RD fees are higher than HUD, poor comparison, smaller properties, more remote, RD seems to have an attitude that you should be happy with what you have.
The issue brought up is to have a review of what is included in the management fee, and there is a need for more inclusion, such as IT expenses, software expenses, etc.
Consider OCAF adjustment rather than RD consideration? Use a “Bundle of Services” as a strategy to raise management fees.
New reserve process was discussed. Ari Severe & TM were beta testers. Realized a 48-hour turnaround on requests. RD promises a no longer than 5-day turnaround if all paperwork complies.
Developers & Owners Committee
1. Welcome & Introductions
2. Preservation and Operational Issues
3. New Construction Challenges
4. Development Costs
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Materials and construction costs
- Hiring skilled workers
5. Legislative and Regulatory Issues
6. Update to Committee Recommendations to the Board from the June 2025 Meeting:
- Schedule a meeting with Rural Development staff to discuss expectations and timeliness for the processing of transfer applications.
- Encourage Rural Development to create benchmarks and procedures for transfers that are consistent across the agency.
- Further impress upon Rural Development the importance of making certain Rental Assistance and rent increases are in place at the initial closing on all 515 properties.
- Aggressively advocate for 100 percent RA for the RD portfolio.
- Seek further clarity on the SARA/decoupling program-specific.
- Seek a blanket waiver regarding the Build America Buy America Act requirements.
- Advocate for a 30 percent basis boost (LIHTC) for rural housing.
7. Other Concerns/Issues
8. Recommendations to CARH Board of Directors
Discussion on construction costs and pricing, consensus is that costs have settled down and are not as turbulent as early 2025. Transfers have slowed down, and OGC is now looking at 60 days rather than 30 days for closing. The comment was made that CARH should suggest private attorneys or contract attorneys to speed up the process.
A New York owner has been asked to decommit their 2018 funds reserved under MPR. A request letter will be sent to CARH for follow-up.
Return to Owner has been an issue on bond transactions. The development fee cap also issues on same deals.
Question raised as to how unused rental assistance is being reallocated. RD & OGC only ones who know the number of rental assistance slots available.
Washington Report
Tom Reynolds of Holland & Knight, Nick Tsimortos of Arnell Golden Gregory, and Colleen Fisher of CARH discussed appropriations for RD-USDA. The agency is fully funded for fiscal year 2026. Decoupling was authorized at 5,000 units to participate, up from 1,000 units authorized in 2025 and 2024. Fifty developments are eligible.
The RRH 515 budget is $50 million, down from $60 million last fiscal year. Of the $50 million appropriated, $15 million can be used for new construction. IT improvements were budgeted at $75 million. At HUD, $1.25 billion was approved for the HOME program.
The Road to Housing Act was passed by the Senate but was stripped from the NDAA bill in the House at the end of the year and may come back in 2026. The original bill would have made decoupling a permanent program.
The Public Welfare Investment Authority, being discussed in Washington, proposed an increase from 15% to 20% of capital for banks that can claim LIHTC investment as a credit; banks generally support the issue.
The HOME program is being discussed for reauthorization and would increase HOME funding through 2029, eliminate and reform NEPA regulations on HOME projects, and remove Build America Buy America (BABA) from HOME
The White House Affordability paper/statement will have little effect. More importantly, the FY 2027 budget starts with the administration when they release proposed funding targets in February/March.
Strategies for Navigating Insurance Costs
Two speakers from USI provided their thoughts on where the industry is now. When capacity is tight, rates go up. Capacity has increased recently as fires are down this year, the hurricane season was mild, and other disasters have been fewer than in years past. They predict a 10% reduction in flat increases on premiums for 2026. Claims have been reduced from 5%-20% across the country.
General Liability: General liability costs are increasing from 10-15%, Umbrella coverage increases expected from 0% to 20%; these two coverages are typically a lender requirement. False advertising is a part of general liability, along with injury on a property. USI does benchmarking across the country.
Seeing more secondary coverages and ancillary coverages, such as active shooters and molestation. Look for exclusions in coverage. Assault and battery coverage is becoming popular, cooking grills, dog bites, habitability, and mold all can be considered.
Have a recovery plan developed in writing for an insurance company to read if a disaster were to put tenants out of their housing in case of fire, flooding, etc. This will help with the premium discussion.
Frivolous lawsuits such as discrimination, wrongful termination, etc., can be mitigated with a clear policies and procedures manual; this is risk control. Trying to minimize exposure with defined hiring practices, having an employee handbook
Discuss with the insurance agent whether their policies are subject to discovery in a lawsuit. Opposing lawyer will typically sue to the limits of coverage.
Ask the insurer if you have the right to name your own counsel, rather than use the insurer's counsel. Depending on the carrier, negotiate at renewal.
Tenant data breach can be covered by IT coverage. Look at policies 120 days out from the renewal. Doing a claim review, closed claims are important, open claims at renewal can increase your premium.
Adjust your deductibles, update your valuations for the best premium comparisons. More carriers are out there; the best strategy is to have an alternative quote on your portfolio before the renewal discussion with your current carrier.
Day 2
Emerging Trends from HUD-RD
Jen Larson represented HUD, and Michael Cummings also attended, both via Zoom. Michael heads up SW Housing Compliance as a contractor and reports to Jen Larson. He oversees 850 properties, of which ninety-five are RD properties. Properties are in Texas and Arkansas, and they monitor compliance, occupancy review, contract renewals, and do tri-annual reviews, one of forty-two in the US.
At HUD, HOTMA has been pushed off to January 1, 2027, for implementation. The NEPA proposed rule change will be out soon, and the E-tool appears to be working. Do uploads of CNAs every 10 years.
Karissa Stiers and Michael Reznick of RD spoke via Zoom. Approving budgets took priority during the end of the calendar year work, with 93% of budgets approved by December 31, 2026. Rental assistance processing had a system error that caused a delay, but it is now fixed.
The new reserve account process will be fully implemented by February 5th. The five-day response time or less is the stated goal for reserve requests.
Decoupling, RD received eighteen applications with 415 units. FY2026 will allow up to 5,000 units to participate and have fifty-two eligible borrowers with maturing mortgages falling between October 1, 2025, to September 30, 2026. Going through the clearance process now to notify borrowers.
Concept calls are ongoing.
538 loans no longer need approval and review through DOGE. Improvements to the program and recommendations are being considered from CARH and from the Rural Housing Multifamily Lenders Council.
Transfer Process recommendations from January 16 are being reviewed by the Administrator, and look for implementation and announcement on changes in June.
Simple Transfer Process changes are going through clearance now, and the PILOT has expired. Expect the release of the simple transfer process and extension in February.
Rural Opportunity Zones will be effective January 1, 2027, with July 2026 targeted for area eligible designations.
MPR responses to applicants are expected by mid-February. The new MPR/515 NOFA is still going through the clearance process. The oldest MPR approvals are coming up on their 20-year balloon cycle in 2027. RD does not have a policy as to how these will be handled. RD welcomes/needs input from stakeholders. Rosa Scarcelli of Stanford Management in Maine has several and has no guidance on what will happen. She has been working with Larry Anderson of Get RD Done Right, and they have submitted a white paper on what RD can do.
The end-of-2025 calendar year priorities were approving budgets and end-of-year closings (40+ in all). SARA IT fixes have been made.
The management fees discussion has not taken place internally yet at RD. Stakeholder feedback is needed and requested.
In the appropriations bill, there is a $1 million automation increase.
Karissa Stiers expects to have more announcements on all of the above by the March Board Meeting of CARH and the June meeting.
Housing Strategies – State of the Markets
Cinnaire, Enterprise, Churchill Stateside Group, and Rose Community Capital participated in a panel discussing debt and equity for the LIHTC and the general market.
HUD d4 loan product is providing the bulk of loans on LIHTC deals. Equity drives the deal; a developer will typically pin down their equity before committing to debt. Equity pricing ranging from seventy-one cents to ninety cents. High end of the range driven by CRA markets, economic investors expecting a 9-10% return, and a $29 billion overall market. GSE caps (Fannie & Freddie) went to $2 billion each. Banks are 80-85% of the market. GSE’s want big deals as they have more dollars to invest, but no additional staffing. Freddie Mac invests only in proprietary funds and wants deals of $15 million equity minimum. Fannie Mae is investing in multi-investor funds, including regional and local equity funds (like Cinnaire).
Advice for developers: talk to your investors early, update your financial statements to a current status, explain thoroughly your problem properties, and have a list of your contingent liabilities.
Advancing AI in Affordable Housing
The session was led by Jeffrey Promnitz, CEO of Zeffert & Associates, a compliance training firm. He reviewed practical applications of AI in the workplace, including organizing notes, writing emails, summarizing documents, and doing spreadsheets. He emphasized the review of material for accuracy, and always needs a human in the loop (HITL).
Day 3
Here Comes the Sun-Capitalize on Federal Solar Credit Before They Expire
Rob Dicke of Baker Tilly (WI-CARH Board Member & Vice President) reviewed Section 48 of the tax code. Expect energy costs to keep increasing, with the AI demand for energy driving up pricing. Commercial tax credits are still available until July 1, 2026, and require a minimum of 5% be spent on your project by the July 1 deadline. If met, you have until 2032 to finish your project. There are heat pump rebates available in individual states. Fleet Development in Oregon has specialized in solar and batteries for a few years and has a pipeline of work for several years.
The Oracle of 25%: Prophesies, Pitfalls, and the New Age of 4% Bonds
This session reviewed the effect of bond financing with the recent lowering of the 50% test to 25% and how states are reacting that issue bonds. Also reviewed the states with state tax credits that can make a deal potentially work. The effect of the lower test has reduced equity pricing. Knowing your capital stack, knowing your issuers/programs, and knowing your underwriting are all important.
Exit Strategies and Aging Properties
Belmont Development of Oklahoma led the discussion. They bought a portfolio 20 years ago and are now realizing negative capital accounts. The MPR program has twenty of the first eighty approved, and they are coming due in 2027 on their 20-year deferrals. RD has no current policy on what they will allow. Would they forgive debt? Allow new debt or a refinancing? Also discussed was the need for Return to Owner reform and the need for an exit ramp policy for current owners.
Advice given on LIHTC year 15 strategies. Make sure you have a call option to buy out the investor at year 15. Do not be in a position where you are forced to sell/liquidate at year 15. The goal is to get a $0 capital account at end of year 15. Strategy starts with the language of letters of intent. Ask the investor how they want to be bought out or their preferred exit. The current preferred option is for the general partner pays 10% of the fair market value to the investor to leave.
Russell D. Kaney
President, WI-CARH
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