Title

CED Rural Home Loan Packaging Program

Relevance

Low and very low-income rural residents need opportunities for homeownership, but traditional mortgage financing is too often out of reach. The U.S. Department of Agriculture Rural Development (USDA RD) Single Family Direct Loan Program (502 direct loans) and the USDA Single Family Housing Repair Loan & Grant (504 loans) is an affordable alternative that provides subsidized mortgage loans for modest homes and repair grants/loans for seniors in rural areas. Applicants are generally first-time homebuyers, existing homeowners, and seniors over the age of 62.

Response

USDA RD stated that "affordable housing is essential to the vitality of communities in rural America. Affordable housing programs allow families and individuals to buy, build, repair, or own safe, affordable homes in rural America. Through rising construction costs and an increase in demand, median housing prices have increased well over $300k making housing and traditional home mortgages unaffordable for low-income families (Texas Real Estate Research Center). Prairie View A&M University (PVAMU) Cooperative Extension Program's (CEP) Community & Economic Development (CED) Rural Home Loan Packaging Program (RHLP) provides informative training and packaging assistance to promote and advance successful homeownership. The program's purpose is to increase the knowledge of USDA RD home loans and repair programs by marketing and promoting USDA RD 502/504 Programs in rural Texas counties.

Results

Building capacity with USDA Rural Development allowed the CED Unit to provide financial literacy and education surrounding affordable homeownership. In most cases, our clients are first-time homebuyers and seniors who benefit from a low-interest rate, no Private Mortgage Insurance (PMI), and low to no down payment requirements. Certified Agents/Specialists meet with clients to provide housing counseling, financial literacy, credit review, debt management, and loan packaging assistance. Building capacity with USDA Rural Development Local Offices allows CED staff to market the 502/504 program, prescreen and counsel potential applicants, and assist applicants in assembling a complete application. As a result, the staff submitted 77 homeownership applications, 2 first-time homeowners approved, $443,896.00 in 502 home loans packaged, and $696,500.00 in 504 loan/repair grants packaged.

Public Value Statement

Primary Focus Area

Youth, Family, & Communities

Secondary Focus Area

None Selected

Impact Statement