What is Stand-Alone Rental Assistance?

Decoupling Rental Assistance allows eligible USDA Rural Development Multifamily Housing (MFH) direct loan borrowers to continue receiving long-term rental assistance in exchange for agreeing to preserve and operate their multifamily property as affordable rural housing.

Eligible MFH direct loan borrowers whose loans are reaching natural mortgage maturity can enter into Section 521 Stand-Alone Rental Assistance (SARA) contracts after they have made the final payment on their direct loan.

Before this policy change, once an owner of a USDA-financed property paid off their Multifamily Housing direct loan, the property could no longer receive Rental Assistance (RA).

Why are SARA contracts necessary?

SARA is an important strategy in preserving affordable housing for tenants while also supporting the preservation and rehabilitation of the USDA Rural Development MFH portfolio.

Rural communities benefit by retaining properties with project-based RA to continue helping current and future tenants. With access to RA as a steady source of project revenue, owners can leverage other public and private financing sources for project rehabilitation.

With more than 400,000 apartment units nationwide, the MFH program is a crucial source of affordable housing for rural communities. More than 80 percent of the tenants living in USDA-funded multifamily units rely on USDA RD rental assistance to keep their housing affordable.

The MFH program is facing an accelerated loss of affordable housing projects in its portfolio. Between now and 2034, roughly 27 percent of the units in the current MFH portfolio could exit the program as their mortgages mature. More than 94 percent will be eligible to pay off their loans by 2050, reflecting the potential loss of about 333,000 multifamily apartments.

In July 2023, we conducted Congressionally mandated listening sessions for input regarding the necessary resources, tools and policies to successfully implement decoupling. Participating stakeholders were overwhelmingly supportive of decoupling.