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More Buyers May Qualify For Zero-Down Rural Loans

WASHINGTON – Feb. 14, 2019 – Prisons and military bases are commonly located outside small, rural towns and often they’re the biggest employers and economic drivers around. But that’s been a double-edged sword – until now.

A town with a population greater than 35,000 isn’t considered rural under federal Rural Housing Service (RHS) guidelines, even if the area meets other criteria, such as a shortage of credit opportunities widely available in more populous areas. However, prisons and military bases currently count toward an area’s population, putting many RHS communities over the threshold of eligibility for programs.

Some small-town residents near prisons or military bases may now qualify for a rural housing loan thanks to a change in the big farm bill U.S. Congress recently passed, which the National Association of Realtors® supported. Going forward, only a portion of a prison or military base population will count against an area’s population total.

Access to RHS programs, which provide safe and affordable mortgages for rural communities, is a lifeline for many homeowners. Financing is underwritten using criteria that recognizes the unique characteristics of rural property, such as the presence of other structures on the property or the absence of public services.

The farm bill also includes a broader win for rural housing: The population threshold of 35,000 to qualify for RHS programs won’t change until 2030. It was expected to rise in 2020, along with new Census figures, but NAR and other groups asked that the change be delayed because so many communities stood to lose their rural eligibility.

Source: National Association of Realtors®, Robert Freedman

©Florida Realtors® 
Reprinted with permission Florida Realtors. All rights reserved.


Allen Thompson

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