Rural Development to Implement Model Lease for Section 515 Program

The Biden Administration has instructed the U.S. Department of Agriculture to institute a broad set of actions with regard to leases in the Rural Development (RD) Section 515 program. Specifically, RD is developing a “model” lease for the Section 515 program, similar to the HUD Model lease for the HUD multifamily programs.

RD is also creating a tenant grievance FAQ outlining clear steps for tenants appealing management decisions and will distribute it to owners and management agents. The Agency will also ask that the FAQ be provided to tenants and tenant advocacy groups.

In addition, RD is working on a Tenant Rights & Responsibilities brochure modeled after the HUD Multifamily brochure for assisted housing residents, increasing consistency between the two agencies and clarifying the rights of Section 515 residents. It is likely that RD regulations will be updated to require Section 515 borrowers to utilize the brochure.

Owners and managers of RD Section 515 properties should be prepared for this upcoming change. A good starting point is a review of the current HUD Model Lease for Multifamily Housing and the HUD Rights & Responsibilities Brochure. This will give operators of Section 515 housing an idea of what may be coming down the road.