With just over a week remaining in fiscal year 2015, USDA Rural Development has obligated all of its Section 502 direct loan funds for the year. This is the first time since FY12 the agency has been able to use all the money appropriated for this program, which makes mortgage loans directly to low- or very low-income first-time homebuyers. Of the total obligated, 31.8 percent is going to very low-income families, who have incomes less than 30 percent of the median income in their areas.
The FY15 funding is providing 7,043 loans, with 714 of them obligated in the past week. Because staffing cuts and competing priorities have made it difficult for USDA RD to process all the Section 502 direct applications it receives, the agency has had difficulty using all the funds in the last few years, so this year in late August it launched an “all hands on deck” effort to obligate funds by September 30.
USDA still has an additional 1,160 requests for Section 502 direct mortgages from eligible applicants, and 4,944 from hopeful buyers whose eligibility has not yet been determined.
Loan funds remain available in the Section 504 loan program, which helps very low-income homeowners to make repairs on their homes. Although initially each state received a specific allotment of funds, the remaining loans are available in all states. Section 504 grant funds for elderly very low-income homeowners have all been used for FY15.
More funds should be available for USDA housing programs when Congress makes FY16 appropriations available after October 1, 2015.
For more information contact a USDA Rural Development office.