The U.S. Department of Agriculture this week acted administratively so that borrowers in 900 communities in 48 states will continue to have access to Rural Housing Service-backed single-family loans for at least another six months.
Otherwise, those communities would have been cut off from RHS loans on Monday, Oct. 1.
The agency’s undersecretary for rural development issued an administrative notice Sept. 25 that delays transition to 2010 census data until March 27, 2013.
The new census data will determine which communities continue to be eligible for RHS loans. Since Congress has not updated the population limits for eligible rural communities since 1970s, it was estimated that 900 communities could lose access to these affordable, low-downpayment loans.
Undersecretary Dallas Tonsager cited the continuing appropriations bill passed by Congress that will keep government agencies funded through March 27 as the basis for the six-month delay.
“Generally speaking, the authorities and limitations under USDA’s FY 2012 Appropriations Act continue during this period. Therefore, Rural Development will defer transition [to the 2010 census] at this time,” Tonsager said.
The National Association of Realtors welcomed USDA’s reading of the continuing appropriations bill.
“Without congressional intervention, RHS was on the brink of reverting to a definition of ‘rural’ that has not been updated since 1974,” the Realtors said.
NAR has been working with legislators to update the definition of "rural" for communities inside metropolitan statistical areas. Currently, the population limit inside MSAs is 25,000.
The Senate has passed a farm bill with an amendment by Sen. Nelson, D-Neb., that raises the MSA population limit to 35,000. But House members adjourned early without passing a farm bill. Lawmakers will not return to Washington until after the November 6 elections.
Most of the communities in danger of losing their RHS eligibility are in metropolitan areas.
Borrowers in rural communities outside of MSAs with populations below 10,000 are eligible for RHS loans.
