Housing Budget Disappointing for Rural Americans, Experts Say

Contacts: Leslie Strauss, Housing Assistance Council, (202) 842-8600 x141
Janice Clark, Housing Assistance Council, (202) 842-8600 x131

Washington, D.C., February 16, 2011 –The Obama Administration’s budget for fiscal year 2012 would abandon important efforts to improve housing for the lowest-income homeowners and renters in rural America, according to the Housing Assistance Council, a nonprofit national rural housing organization.

“The country’s economic recovery is far from complete and millions of families live in inadequate or overly expensive housing,” said Moises Loza, executive director of the Housing Assistance Council. “It’s seriously disappointing to see proposals that would slash support for key rural housing programs. If this budget becomes law, many rural families’ dreams of homeownership will be dashed. Federal investments in affordable rental homes will be discarded. And elderly rural residents will not be able to make basic health and safety improvements to their homes.”

The budget would harm aspiring homeowners by eliminating funding for programs that support self-help homeownership. Self-help enables low-income families to contribute hundreds of hours of their own “sweat equity” to construct their own homes. Funding for USDA mortgages at below-market interest rates would also be drastically reduced.

“The combination of self-help construction and low-interest mortgages has made homeownership – with all its benefits – successful for tens of thousands of rural families over many years,” Loza stated. “Without this opportunity, these families become targets for the kind of subprime lenders that helped erode our nation’s economy.”

For low-income rural renters, the budget would continue to finance limited construction of new affordable apartments, but it would eliminate two programs that preserve existing rural rental properties. “The government has already invested in making these rentals affordable and available to those who need them,” Loza noted, “and now if owners can’t get help to rehabilitate old buildings, that investment will be lost.”

Finally, loans and grants that enable very low-income homeowners to make desperately needed repairs would be all but eliminated. Much of this funding is currently used by elderly people who prefer to stay in their own homes rather than move to far more expensive care facilities.

Details about the rural housing budget proposals are available at www.ruralhome.org. A national nonprofit corporation headquartered in Washington, D.C., and founded in 1971, the Housing Assistance Council helps local organizations build affordable homes in rural America by providing below-market financing, technical assistance, research, training, and information services. HAC’s programs focus on local solutions, empowerment of the poor, reduced dependency, and self-help strategies. HAC is an equal opportunity lender.