Articles

Rural Housing Programs NAR Issue Summary

Rural Americans rely on programs like the 502 Rural Housing Loan Program to provide them with services that can be difficult to come by in some communities. Section 502 loans can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. There are two different programs: the guaranteed program, and the direct loan program.  Guaranteed loans are funded by private lenders, and simply insured by the RHS. The Guaranteed loans are self-funded and budget neutral, meaning the fees paid for borrowers fully pay for the program, placing no burden on American taxpayers.  Direct loans benefit very low income or low-income borrowers with funds loaned directly by the Rural Housing Service, without the use of private lenders.

What is the fundamental issue? Rural families face unique difficulties in finding access to safe, affordable mortgage financing.  Programs like the U.S. Department of Agriculture's (USDA) Rural Housing Section 502 loan program are instrumental in providing opportunities for homeownership for these families.  Section 502 loans can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. These loans are funded by private lenders, and simply insured by the USDA Rural Housing Service (RHS).

I am a real estate professional. What does this mean for my business?  Rural housing programs provide much needed affordable mortgage financing to unserved markets and are instrumental in providing affordable housing opportunities to low and moderate-income rural homebuyers.

NAR Policy: NAR supports federal programs for home loans, rental development and rental assistance, including those of the RHS. Rural families face unique difficulties in finding access to safe, affordable mortgage financing, and affordable rental options in short supply in rural America. Fully funding the RHS’s programs is critical to the more than 17 million Americans living in rural communities. NAR believes communites with rural characteristics should maintain access to RHS programs.

Income eligibility

https://www.rd.usda.gov/files/RD-DirectLimitMap.pdf

 

USDA Income and Property Eligibility 

https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfpd

 

North Carolina
Bob Chandler, State Director
4405 Bland Road, Suite 260
Raleigh, NC  27609
Voice: (919) 873-2000
Fax: (844) 325-6921
www.rd.usda.gov/nc

USDA Website: Effective March 1, 2019, the current interest rate for Single Family Housing Direct Home Loans is 3.50% for low and very low income borrowers.

 

USDA Approved Lenders  https://www.rd.usda.gov/files/SFHGLDApprovedLenders.pdf

 

Submitted by Paula Fields with My Favorite Realty Inc   336-543-8683   PFields2@triad.rr.com