Rural Housing Budget Disappointing, But Not Surprising
by Leslie Strauss, HAC
The guiding principle seems to be, as it is for “safety net” programs generally, reducing spending rather than meeting needs.
The USDA’s flagship rural housing efforts have long been direct loan programs: Section 502 for homebuyers and Section 515 for those who provide rental housing. Like past Obama administration budgets, the FY14 request emphasizes USDA’s loan guarantees rather than direct lending. The guarantee programs—Section 502 guaranteed for homebuyers and Section 538 for rental housing—are “budget neutral” because participants pay fees that cover the programs’ costs. They carry higher interest rates, however, and therefore serve residents with somewhat higher income levels than those using the direct loan programs.