The House of Representatives are considering a bill that will “renew” the Farm Bill. Unlike the Senate bill to fund the USDA – the House version does NOT tackle the question of USDA Home Loans and the new “definition” of Rural. That’s unfortunate. The Real Estate “Housing” recovery is not in high gear – and this program change could cause further HARM to home sales in NC.
The USDA RD Program is at a critical point – with mixed signals about it’s future. There are over 500 communities that grew between the 2000 and 2010 census that could be determined as ineligible for the program. That’s about 9.1 million people or approximately 8% of the population that currently lives in an eligibile area – these folks would no longer have access to the program.
One study notes that:
Approximately 90 percent of these potentially ineligible places are located in metropolitan areas, where towns must have populations below 10,000 to be eligible. Not surprisingly, while they are scattered around the country, clusters of these growing exurbs are particularly noticeable in metros in California, Florida, and Arizona. Rural housing producers have invested time and money in planning developments in some of these places, and we can safely assume that many of them need more affordable housing.
At the base of the issue we find that no one in Congress seems willing to tackle legislation that would raise the population thresholds for all rural housing eligibility determinations – this close to an election. Because of that, and the fact that population limits for USDA’s rural housing programs are not the same as they are for its business or utilities programs, it’s not surprising that the General Accounting office in Washington suggests that there needs to be a more “consistent” definition of Rural. Again, we question the TIMING of the change to the program, given the Economic “recovery” that the Fed says is so fragile. [Read more...]