U.S. Sens. Angus King, I-Maine, and John Curtis, R-Utah, are urging the Trump administration to alter recent changes to financing policies that make it more difficult for rural Americans to obtain housing loans.
In a letter to U.S. Department of Agriculture secretary Brooke Rollins, the senators asked that updates limiting additional access to the Rural Development Section 502 direct loan program be rescinded, noting that the revisions drastically reduce loan limits and add new layers of administrative complexity.
The 502 loan program assists low-income applicants in obtaining housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability.
“The revisions … severely curtail program eligibility and make it more difficult for nonprofit partners to place rural families in homes,” the letter stated.
One of the changes the senators are objecting to is the reduction of Section 502 loan limits from 80% to 60%.
“This revision is coupled with another that prohibits loans from being issued when the appraised value of the house exceeds the loan limit,” the letter continued.
“For families participating in the USDA Mutual Self-Help housing program, whose sweat equity lowers the total of the Section 502 loan but increases the value of the house, this change is especially problematic,” the senators wrote.
The senators noted the changes will limit the ability for non-profit organizations to package loans, which USDA cannot do on its own.
“These changes are not only burdensome but also create uncertainty for families navigating this process,” the senators wrote.
Joining King and Curtis on the letter are U.S. Sens. Susan Collins, R-Maine; Mike Crapo, R-Idaho; Mazie Hirono, D-Hawaii; James Risch, R-Idaho; Tim Kaine, D-Va.; Lisa Blunt Rochester, D-Del.; and Alex Padilla, D-Calif.
Nonprofit response
Amy Nucci, executive director of Habitat for Humanity of Maine: “These shifts would slow Habitat’s ability to build new homes and support rural homebuyers, reducing much-needed housing supply. Restoring the previous rules would keep this vital program working for the families and communities that depend on it.”
Jennifer Hawkins, president and CEO of Avesta Housing: “At this time of high prices, USDA should be using all of its tools to support homeownership, not make it more difficult for first-time buyers.”
