Building Communities Together with USDA Rural Development

Filed in Housing Finance by on June 30, 2016 9 Comments

Today, NAHBNow welcomes guest writer Tony Hernandez, USDA Rural Housing Service Administrator, to talk about new programs designed to provide more homes for families who otherwise might not be able to buy them.

Rural America needs new affordable homes.house in hand

As USDA Rural Housing Service Administrator, I’ve heard time and time again about the lack of good affordable housing stock in rural America. It’s a very real problem facing rural families and individuals financially and personally ready to realize their dreams of homeownership ─ everywhere from Vermont to North Dakota to Texas to California.

Together, home builders and lenders can work with USDA Rural Development to create affordable housing options for families who want to buy in rural America, and because of recent program changes it’s easier than ever before.

We have added the Single-Close Construction to Permanent Home Loan option to RHS’ Single Family Housing Home Loan Guarantee Program. This new way to administer the program allows USDA to issue our 90% loan note guarantee (that has helped nearly one million families since 2009 buy homes) before construction begins. This means the home builder never has to worry about risking their capital in a project.

The home buyer benefits most of all.  They may rest easy knowing the construction project is fully funded.  The lender may establish an interest reserve account to assist in making payments due for required loan purposes during the construction timeframe.  This allows the home buyer a more affordable option so they will not be in a position to make two mortgage payments, or pay rent and a mortgage payment.  New construction properties also have much less maintenance costs than an older dwelling which may require a new roof, furnace or other repairs.

New construction stimulates the rural economy in many ways, and USDA Rural Development is incredibly excited to help home builders help rural Americans. We estimate 2.1 jobs are created for every new home built in rural America.  Under the partnership of home builders and USDA Rural Development, an estimated 149,000 homes have been built, creating approximately 300,000 jobs.

To learn more about opportunities to build more homes with USDA, contact your local USDA Rural Development office or visit www.rd.usda.gov. We’re very excited to work with home builders to help families build the American dream of homeownership.

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Comments (9)

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  1. Great program that can enhance sales and closings predictably and profitably with cash flow!
    ONwards and UPwards!

  2. Lauree says:

    This sounds like an excellent finance package!
    Thanks

  3. Kerrville, Texas is serious about affordable housing and works closely with a non profit called the Hill Country Home Opportunity Council, Inc. Most homes are financed by USDA. They require Builders to meet codes and have inspections. Through a very generous Grant from the Cailloux Foundation,
    HCHOC purchased 8.25 acres next to sold out Pinto Trail subdivision. There are plans to develop the property for 38-45 lots.

    • klaus Becker says:

      I live in Wimberley, TX and am looking for a lender that offers the USDA construction product. no such luck. Do you know of anyone in my area that would fund a USDA construction loan?

      • klaus Becker says:

        we own our lot outright.

      • KLAUS, I believe USDA is the lender. You should locate the local office and ask about their programs.
        I hope this helps.

        • Klaus Becker says:

          USDA guarantees the loan but does not fund it. I am at a point now where I have the list from USDA with all their approved lenders and am phoning them directly. So far no one will do the construction loan, but they will do standard mortgage on new or pre existing home. Who does HCHOC use for mortgage company?

  4. Eoinlee says:

    USDA Rural development is doing excellent work.Of course, new construction stimulates the economy of rural areas.The rural areas in California is facing serious problem.I think USDA should look into matter

  5. chris says:

    Im searching for a builder who works with this great program in my area of Hunt County, TX which is in North East Texas. Why dont more builders and lenders get onboard. This seems like a win win for everyone!

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