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Builders Celebrate National Homeownership Month

Jill Rees
Release Date
Jul 01, 2014

U.S. Representative Suzanne Bonamici yesterday joined USDA’s national Administrator for rural housing programs, Tony Hernandez, and USDA Rural Development State Director Vicki Walker to help rural Oregonians who are building their own homes through the self-help method in Lafayette.

"These homes will serve as stepping stones to greater economic prosperity for their residents," Congresswoman Bonamici said. "Americans need more opportunities for success, and the Self-Help Housing Program opens doors. The program will lead to more stable families and better communities, and will give the area a much-needed economic boost. I'm excited for these future homeowners and the benefit this program will have on their lives."

USDA Rural Development’s Self-Help Housing Program offers families with modest means a hands-on approach to achieve homeownership. The local sponsor, Community Home Builders, uses USDA technical assistance funds to develop a site, provide coordination and training, and secure the assistance of a professional contractor. Working side-by-side on nights and weekends, participating families perform roughly 65 percent of the construction, and no one moves in until all the houses are completed. USDA Rural Development then provides each qualifying participant with an affordable, 100-percent mortgage to cover the remaining balance.

Throughout June, USDA Rural Development has been highlighting National Homeownership Month with events across the Nation. USDA Rural Housing Service Administrator Tony Hernandez is capping off the month-long celebration today by visiting self-help housing efforts in both Lafayette, Oregon, and Castle Rock, Washington.
“Since the start of USDA’s single-family housing programs in 1949, USDA has helped nearly 3.4 million rural residents buy homes of their own,” Hernandez said.  “Many are lower-income, first-time homebuyers who are earning a leg up into the middle class.  Homeownership is a critical step on the ladder of opportunity:  it helps build equity and increase assets.  Simply put, homeownership means long-term financial stability and security for many rural families.”

The Obama Administration housing's policies are helping to strengthen rural communities and the overall rural economy.  In 2013 alone, USDA helped more than 170,000 rural residents become homeowners, investing more than $23.4 billion in loans, grants and technical assistance to provide affordable, safe housing for rural families.  In both people served and dollars, 2013 was the most successful year in the history of USDA single-family housing programs.

“Here in Oregon, since the start of the Obama Administration, USDA Rural Development has made or guaranteed loans for nearly 14,000 rural families,” Walker said.
In addition to the Self-Help Housing Program, USDA Rural Development offers the following homeownership programs:

  • Direct home loans for very-low-income applicants.  Payment assistance is provided that can lower the loan’s interest rate to as low as one percent.
  • Guaranteed home loans for moderate-income families.  The agency works in partnership with private-sector lenders to back the lenders’ loans.
  • Home repair loans and grants to help rural homeowners make improvements or repairs.  Examples include making homes accessible for people with disabilities or removing health and safety hazards like poor wiring or plumbing.

In 2012, as part of President Obama's ongoing efforts to help middle-class families, USDA launched a rural refinance pilot program in states hardest hit by the housing downturn.  The program lets people with USDA direct or guaranteed home loans refinance in order to take advantage of lower interest rates and lower their monthly mortgage payments.  In January 2013, 15 more states and the Commonwealth of Puerto Rico were added to the pilot.
USDA is making changes to the guaranteed home loan program to help create jobs, enable more people to participate, spur new home construction and inject more capital into rural areas.  The changes will increase the availability of housing loans in underserved communities, such as those targeted by USDA's StrikeForce initiative to help alleviate rural poverty. The changes take effect on September 1, 2014, and include:

  • Increased lender eligibility.  Many small community banks and credit unions, which are currently ineligible, will be able to participate.
  • Construction-to-permanent financing.  Currently, only “take-out” financing is permitted once construction is complete.  “Construction-to-perm” financing — also called “single close” financing — will provide funds when construction begins.  This will encourage homebuilders, lenders and borrowers to build more new homes.

President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities.  Under the President’s leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America’s economy, small towns and rural communities. USDA’s investments in rural communities support the rural way of life that stands as the backbone of our American values.  President Obama and Agriculture Secretary Vilsack are committed to a smarter use of federal resources to foster sustainable economic prosperity and ensure the government is a strong partner for businesses, entrepreneurs and working families in rural communities.