Rural SF Loans Doubled in FY08

Demand for federal rural development single-family loans has doubled this fiscal year to $6.1 billion, and agency officials estimate that the rural housing program could guarantee $10 billion in loans in fiscal 2009 if Congress approves additional support for the program. "We are bolstering the market and providing support the way government should during hard times," said Joaquin Tremolf, single-family director of the U.S. Department of Agriculture's Rural Development agency. The rural housing program provides no-downpayment loans for low- and moderate-income homebuyers in rural areas. "It is the only no-downpayment program left for nonveterans," Mr. Tremolf said. However, the agency has strict underwriting standards, and it reviews "every single appraisal" before approving a loan, the director said. The foreclosure rate on rural housing loans was 1.4% as of June 30, compared with 2.3% for Federal Housing Administration single-family loans.