Announcements
Jennifer Emerling / There Is More Work To Be Done
Jennifer Emerling / There Is More Work To Be Done
FY 2010 Spending, Section 502 Direct Homeownership Loans
National Rural Housing Coalition Budget Bulletin,
Volume 13, Number 44
October 1, 2010
reprinted by permission
Attached is a table on USDA Section 502 direct loan obligations for Fiscal Year 2010. Through the Recovery Act as well as FY 10 appropriations, the Rural Housing Service had a total of $2.423 billion available, the most since the early 1980’s.
USDA obligated $2.144 billion or 85% of the total available. Of that, $755 million went to very low-income borrowers. This was 36% of the total. While this amount was less than the 40% setaside for very low-income, it is still the most that USDA has ever spent in a single year in the category. In terms of loans, USDA made 17,640 loans. Almost 40% of those went to very low-income borrowers. Self-help obligations totaled $167 million for 1,243 loans. The Home Ownership Partnership totaled $20.7 million and 271 loans.
In FY 2009, USDA obligated a total of $1.39 billion in Recovery Act and FY 09 appropriated funds. So, in FY 10, the Agency obligated about 55%, or $750 million more.
In September, USDA issued a change in procedure that allowed loan obligations without an appraisal. This change resulted in a spike in obligations and allowed the Department to get as close as it did to obligating the entire amount available. A question remains as to how many of those loans made in the last month will close, once appraisals are completed.
It is very likely that Section 502 direct returns to earth in FY 11. The budget request for FY 11 is about half of that available in FY 10. Discretionary resources are on the downswing and a program level of $1.12 billion (the level for the regular FY 10 appropriation) is likely.
Posted: October 1, 2010