Norman Reed is not a salesman, but lately he’s been acting like one. He’s been traveling the state trying to get people, lenders, and others to buy in to USDA Rural Development’s home programs.
Thursday, Reed’s travels brought him to Pittsburg, as he presented the specifics of three home programs that are aimed at improving the lives of the county’s lower-income families.
Reed’s biggest sell is the Direct Housing loans. These loans provide low-income home buyers with loans that can eliminate the down payment, mortgage insurance and origination fees found in a private loan, provide a 33-year mortgage, and offer lower interest rates. In fact, those interest rates can get as low as a note rate of 4.875 percent interest, with the possibilities of subsidies that could lower that as low as 1 percent.
“We have more funding for that program than we’ve had in 15 years,” Reed said. “That’s because we’ve received our regular funds (roughly $11 million) and also received additional funds from the American Recovery and Reinvestment Act. We are flush with funds.”
In order to be eligible for this program, a family of four in this region would need to make less than a combined $41,850.
Another program Reed touted at Thursday’s meeting was Rural Development’s Guaranteed Rural Housing loans. Unlike the Direct Housing loans, which are aimed more at those buying a home, the Guaranteed Rural Housing loans target bankers.
In effect, the Guaranteed Rural Housing loans provide a sort of insurance to lending institutions when the institutions lend money to lower-income families. For these loans, if a borrower defaults on the loan, the banks can recoup up to 90 percent of their losses.
“It minimizes a bank’s risk and makes them more willing to lend money to low-income families,” Reed said.
The final program Reed discussed was the Repair Loan and Grant program.
To qualify for the Repair Loan program, a family must make below 50 percent of the county median income. For instance, for a family of four, the family would have to make less than $26,150 in order to be eligible.
The program gives low-interest loans for home repairs and improvements. A grant program also exists for those 62 or older.
“It’s for basic home repairs, like to build on handicapped access to a house, or thermal updates like new windows or siding,” Reed said. “Not to mention the urgent things, like a furnace going out or you’re on septic and you need a new sewer.”
All told, Reed’s trying to spread the message of these programs before the deadlines for some of the programs hit later this year.
“We’re having local meetings. We’re trying to do the best we can to get out in the community, visit the realtors and communicate with lenders because they’re the ones who see the families that don’t qualify for other programs,” Reed said.
Andrew Nash can be reached at andrew.nash@morningsun.net or by calling 231-2600 ext. 132.
