June is National Homeownership month and USDA officials, bankers and housing partners are highlighting USDA’s ongoing role to help families with homeowner ship opportunities in rural communities. This year is also the 25th anniversary of a landmark USDA program that greatly expanded the availability of home financing for rural residents.
Former First District Congressman Doug Bereuter of Nebraska was the legislative author of the Single Family Housing Guarantee Rural Housing (GRH) loan program. USDA launched this program in 1991to help expand access to mortgage financing in rural areas. There are no down payment requirements, so loans may be made up to 100% of the appraised value. Approved lenders originate the loans and the guarantee provided through USDA significantly reduces a lender’s risk and increases the lender’s ability to reach potential homeowners. There were 75 approved lenders that participated in the GRH program in Nebraska in Fiscal Year 2015 and loans were made in 76 of the 93 counties.
Since the program was created, more than 15,500 rural residents in Nebraska have obtained home ownership with USDA loan guarantees, totaling more than $1.2 billion in rural Nebraska communities.
USDA Rural Development in Nebraska has approximately $120 million available for home ownership through their home ownership programs in FY 2016. To highlight home ownership opportunities, USDA representatives along with other housing partners will be hosting public town hall meetings in 26 communities across Nebraska. Recent meeting have been held in Holdrege, Chadron and Alliance. Additional meetings scheduled for June are in Crete, Beatrice, Cozad, Gordon and Columbus and additional communities meetings are being scheduled in July and August. Look for a meeting that may be coming to your area.
The GRH program in Nebraska helped Alyssa Peters purchase a home in Chadron that provided space and stability for her and her three children. Alyssa found a house owned by High Plains Community Development Corp. that was being rehabilitated. High Plains Community Development Corp. utilized funds from the Nebraska Department of Economic Development (DED) Housing Trust Fund to purchase and rehabilitate the home. High Plains used only local contractors to do the work, and the Chadron State College Women’s Basketball team and Pine Ridge Job Corps students helped in the rehabilitation.
With a partnership by Farmers State Bank and West Gate Bank, financing was secured, utilizing the USDA Rural Housing Guaranteed Loan program. Grant financing from High Plains Community Development Corp., with a second loan, helped with down payment and closing costs. Because of the DED funds, the homeowner accessed closing cost assistance funds of $5,000.
“It was just great to be able to move back to Chadron to raise the kids in a small town and to be able to provide them with a space of their own,” said Alyssa.
To be eligible, the property purchased by families must be located in a rural community or area. All communities in Nebraska are eligible for USDA housing programs with the exceptions of Fremont, Grand Island, Hastings, Kearney, Lincoln, North Platte, Omaha and South Sioux City/Dakota City. Applicants for home loans may have a household income of up to 115% of the median income for the area. For example, for many counties in the state, a 1-4 person household can have incomes up to $75,650 and 5-8 person households up to $99,850. Income limits are higher in some counties. See: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do for eligible areas and all income limits by county.
More information is available on USDA housing programs on the Agency website at www.rd.usda.gov/ne.