Jan Shadburn
Administrator
Rural Housing Service, USDA
Washington, D.C.
Addressing CARH:
It has been an interesting year. We would not be where we are today
without the support of CARH and, certainly, the membership. Let me make sure
that you understand — not only with the Stakeholder meetings, and looking
at the Reforms and all of the process that we’ve gone through.
You have to understand one thing: if we don’t have you, our customer,
supporting the Agency, then we don’t have an Agency. So, our interest, and
the staff’s interest, is to make sure that we try to come up with products
that you can support, that you can participate in, as well as our other
external customers.
I’d like to acknowledge the staff that are here at this table as well as
those back at the National Office. They have done a tremendous job. I’ve
been
here three years. Since I’ve been here, there have been tremendous changes
in
all of our programs, but especially the Rural Rental Housing program. The
staff have stepped to the line. I think that as we have gone through the
Stakeholder process, you have played a valuable part in the input. So I
would
like to acknowledge the staff at the National Office for the tremendous job
they have done as well as the field staff.
As all of you know, we have down-sized by some 400 offices last year and
also downsized in terms of staff. Yet we are still under some pressure on
the
Salaries and Expenses side.
Need for Viable Programs
It is important as we move forward, very important. We had breakfast
this
morning with a group from CARH. I understand how important the future is for
you, for your Association, for our our Agency and for the Rural communities
that we and you are trying to serve in America. I understand your concern in
terms of funding in the 515 program or the lack thereof. I understand the
interest that you have in the 538 program to try to have a program that can
attract participation from your members and to attract new members. So you
have no concern out of me in trying to work toward a 538 program that is
viable and solicits a great deal of participation. Obviously, as the
Administrator and the staff, we have a responsibility in the 515 program
because we have 18,200 projects. And we have you participating in that
program. It is an aging portfolio. And it has needs in the future.
Obviously,
I would like to have a new construction and a rehab/repair program for the
515 program.
538 Rural Guarantee
In terms of the 538 program, we are going to sit down with you and try
to
work with you during the comment period, which we hope to have the
regulation
through clearance and out somewhere in the first week of July. We’re looking
at some $37 million in the program and proposed for next year about $150
million. We want it to be a good product. The way we need to have it as a
good product is to sit down with your representatives to look at some of the
concerns that you have and to work through those and come up with a balance
that we can all live with, having made sure that it is a strong program.
Reinvention — 3560
The Reinvention [1930-C and 3560] that we have been working through —
we
had a teleconference with some of your members last week. And, regarding the Handbook,
obviously we are interested in making sure as we move through that we
massage
it and get it to where it is a product that we are all proud of. We have
been
through the Stakeholder meetings and solicited the inputs. We will continue
to have Stakeholder meetings and solicit input.
So, as you can see just in the 515 Rural Rental Housing program, there
is
a lot of change.
Then in the field staff, we have issues in terms of training and
automation that we have to be focused on — in our budget, that is where we
have taken the biggest hits. And that is in training and automation. It is a
dire need for us. Not only in trying to make sure that as we bring on new
programs or change existing ones, our automation and our training keep up or
stay ahead. Because I have to depend on our field staff, which is a
tremendous field staff, very capable and I know that they are concerned
about
the changes, and that we make the changes that will ensure the success and
the future of the Agency.
$35 Billion housing portfolio
No Agency has gone through more changes than Rural Development Rural
Housing Service. Not only in the Rural Rental Housing program, but in the
Single Family Housing program. When you’re talking about a $35 Billion
portfolio sitting out there, and you’re making the massive changes that we
are making — either in centralizing the servicing, we’re changing the new
loan origination, we’re doing several things in the 502 Direct Single Family
program, and trying to get our delinquency under control — it can’t help
but
have an impact in the other programs, and in this case, on the Rural Rental
Housing program. So you have my commitment and the staff’s commitment to
work
very closely with you.
Communication and Participation
My interest is certainly in communication and participation with your
Association. As I’ve said before, without you, without programs that work,
without having lenders, servicers and others in the secondary market looking
at a program that they can participate in, that is profitable, and most
importantly serves the segment of Rural America that we need to serve.
Likewise we balance that, too, by making sure that the existing portfolio
that we have in the 515 and Labor Housing, that we maintain those existing
projects and the people that are in them.
Prepayment
On the Prepayment side, I’ve made certain commitments, and we’ve lived
up
to those commitments in terms of establishing an Office of Prepayment and
Preservation. We have done that; we did that in the first quarter of this
calendar year, which we said we would do. We have staffed it with two
people.
We are interested in this issue, as you are. We will work through those
challenges with Prepayment and Preservation.
I ask for your support, your participation with the staff. They’re
committed, as I am, to working very closely with you in terms of how we can
develop these changes in these new products that will ultimately serve and
attract members to your Association. Most of all, what we want to do
together, as a partner, is to make sure that we have a product and that we
protect all of our products in the management and the servicing side so that
the Hill can support us. I have seen a change in that in the last few months
in the support of our programs — that had been controversial over the last
couple of years. We’ll work very hard with your support.
OIG “Partnership”
In the OIG partnership we have been involved in, we had a kind of
mid-project review. At this point, it is going well, and in the next six to
eight weeks, we look to have a final process with that. That, too, if it
comes out as we hope it will, will add an additional confidence to what
we’ve
said. Working with you, we can strengthen our programs, and certainly if we
strengthen our programs, then the Hill will be looking very closely.
Even under the times that we are under, we think that, with your help
and
the field implementing and giving the customer service and providing the
programs out there, that it is resonating positively in all areas on the
Hill. The Rental Assistance is something that everyone has a focus on — it
is expensive, however, in trying to provide rental properties in Rural
America, it is necessary to have the Rental Assistance. We are confident
that
our numbers are correct and that we’re not asking for any more than is
necessary to provide the level of necessary assistance to these projects to
keep them viable.
Thank you for your support. I pledge to you our participation, our
listening and working with you to make sure that we continue to provide the
products that you can participate in, that you can attract additional
members, and that we can serve Rural America and attract the necessary
support that we need on the Hill.