Groups Oppose Rural Development Cuts

Daily Yonder | April 28, 2014

More than 1,400 advocates sign a petition to stop cuts in federal programs that provide low-cost home ownership loans and water-treatment grants. They say rural development isn’t a priority for the administration.

Last week, more than 1,400 rural organizations and advocates, led by the National Rural Housing Coalition (NRHC), delivered a petition to Congress, voicing strong opposition to the significant funding cuts proposed in the Fiscal Year 2015 budget for U.S. Department of Agriculture (USDA) Rural Development programs. These proposed changes include a 60% cut in low-cost homeownership loans and over $150 million in cuts to grants that help small, rural communities provide potable water and waste disposal systems to residents.

“Rural communities are more than disappointed with the administration’s little support for rural development,” said Bob Rapoza, executive secretary of NRHC. “Small communities need affordable housing and clean water. This budget cuts both.”

Rural advocates argue that rural America’s community development needs are not a priority for the administration and urge Congress to reject the proposed reductions as “unwise and unwarranted.” They warn that the president’s budget will only make it harder for low-income families, the elderly and persons with disabilities to access decent, healthy and affordable housing and will hurt struggling rural economies.

Key members of Congress, including Chairman of the House Appropriations Committee, Rep. Hal Rogers (R-KY), have voiced similar concerns about the president’s budget. At a committee hearing earlier this month, Rogers claimed the proposed reductions demonstrate USDA’s “lack of respect for our rural communities and the constituents who have made these programs successful.”

Rogers cited NRHC members Kentucky Highlands Investment Corporation, Frontier Housing and the Federation of Appalachian Housing Enterprises (FAHE) as effective and successful organizations that have used USDA’s Self-Help Housing and Section 502 Direct Loan programs to help low-income, working families become homeowners.

Chairman Rogers voiced concern about how the president’s proposed cuts would affect families who benefit from these programs. For example, Rogers highlighted the story of a woman who had been the victim of extreme domestic abuse who called Kentucky Highlands hoping to find a home for herself and her young daughter. With some financial counseling and guidance from Kentucky Highlands, she was approved for a $66,000 Section 502 Direct Loan. And with the Self-Help Housing program, she was able to build her own home for about $35,000 less than it would have cost to hire a contractor. That means that today, she is living in a home that she can afford that she built with her own hands.

“Without the Self-Help Housing program and Section 502 Direct Loans, she would not have been able to have the benefits of homeownership and the clean slate that opportunity afforded her,” said Rogers.

The committee chairman also highlighted NRHC members Frontier Housing and the Federation of Appalachian Housing Enterprises (FAHE), which participate in USDA’s demonstration program. That program helps low-income rural families become homeowners and has significantly reduced the time it takes for USDA to process its loan applications.

USDA has reported that this program has helped the agency save $1.5 million to date. “Because of this demonstration program, one of my constituents and his family were able to secure a 502 Direct Loan in half the time it normally takes for USDA to process the loans themselves. And because of that loan, he now lives in a new, energy-efficient, green home in Rowan County (Kentucky),” commented Rogers.

Congress is expected to start marking up its fiscal year 2015 Agriculture Appropriations bill in May. NRHC and it members are working to educate members of Congress on how the president’s budget cuts would affect rural communities.

“This year, the administration is at it again, and rural communities are saying they have had enough,” Rapoza said. “We hope Congress’s budget will reflect the fact that rural communities deserve affordable housing and economic development just as much as urban areas,”

Section 502 Direct Homeownership Loans provide fixed-rate mortgages – with up to 38-year terms and subsidized interest rates as low as just one percent – to help low-income rural families gain access to clean, decent and affordable housing.

Self-Help Housing is the only federal program that combines “sweat equity” homeownership opportunities with technical assistance and affordable loans for America’s rural families.

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