guaranteed rural housing loan program

Groceries, childcare, education, transportation, insurance, utilities: these are just some of the essential places families nationwide spend their paychecks every month. Making ends meet takes hard work, but sometimes even after working long hours and shopping right families need help to make it.

Twenty years ago essential affordable housing opportunities were scarce in rural America. Banks weren’t investing in these opportunities because deals that would build affordable rentals required long-term, patient capital that turned profit much slower than those big, new, luxury apartments in cities and larger towns.

2014 will soon be in our collective rear view mirrors, and USDA Rural Development has had an incredibly productive year. This week we are looking back on stories from the year that illustrate the impact our programs have on rural communities. Here's a story out of our Kansas State Office from June.

Megan Estrada and her three children are excited to spend time on their new home’s porch – a home they just moved into this summer. Prior to purchasing their own home, Estrada and her children had spent the last nine years in an apartment in Dodge City, Kansas.

In rural areas, financing a home can be difficult. There often aren’t as many lenders serving rural locations as there are in more densely populated parts of the country. Also, some rural lenders may require a larger down payment or a higher interest rate to secure a loan. Fortunately, USDA Rural Development partners with more than 3,000 housing lenders to make sure low- and moderate-income rural families have a chance to enter the housing market.

Through the Section 502 Guaranteed Housing Loan Program, USDA Rural Development backs loans made by approved lenders for the purchase, refinance, renovation, or repair of an owner-occupied residence. The USDA guarantee allows lenders to provide 100-percent financing on a safe, low-interest, 30-year mortgage.

Tammye Treviño, USDA Rural Development Administrator for Rural Housing Programs participated in a three-day tour throughout Illinois, Iowa and Missouri last month to highlight National Homeownership Month, a time when USDA, its federal partners and members of housing communities all across the country bring attention to the role housing plays in the economy.

As part of this tour Administrator Treviño visited Pilot Grove Savings Bank in Mount Pleasant to recognize the bank for using USDA Rural Development’s Guaranteed Rural Housing program to assist rural Iowans achieve their homeownership goals. Pilot Grove Savings Bank became an approved lender in 2001 and has used the USDA program to assist 70 families in obtaining a home in rural Iowa.

Owning a home in the same area where he built his business is a win-win for new homeowner Greg Kane.  In early June 2011, Kane purchased his studio condominium at Riverbend, Colorado,  through the help of US Bank Home Mortgage and the USDA Rural Development Guaranteed Rural Housing Loan Program.  Homeownership was the right answer for Kane’s housing dilemma.  Over the past four years as a renter he moved five times.  While his relationships with property owners had always been great, it seemed that something always came up. Twice the homes he was renting were sold and the new owners chose to use it as their primary residence.