The Department of Housing and Urban Development, despite its name, has always been heavily involved in rural housing, though rural public housing and otherwise.
Shaun Donovan, HUD secretary, took advantage of an appearance at the Housing Assistance Council’s biennial rural housing conference in Washington to launch a new Rural Innovation Fund.
HUD has issued a $25 million NOFA (notice of fund availability) for the fund, which largely replaces HUD’s old Rural Housing and Economic Development program.
Consortia of groups will be eligible for grants up to $2 million apiece. Single groups can be awarded up to $300,000 apiece or in the case of tribal groups, $400,000 (there is a $5 million set aside for Indian projects).
Five percent of the grant money can be used for technical assistance. The projects are supposed to be targeted towards housing and economic development.
While definitely on the niche side, government rural housing numbers add up quickly, and they include homeownership efforts. HUD, for instance, runs the successful HUD 184 guaranteed American Indian mortgage program, which has extended $1.8 billion in mortgage credit for Indians and Alaska Natives.
Donovan told the group that HUD’s Indian Housing Block Grant program has built or acquired 25,000 homes and rehabbed 52,000 more in tribal areas during the last ten years.
And the long-established mortgage programs of the U.S. Department of Agriculture (now called Rural Housing Service mortgages) have made more than $140 billion in loans since 1950.
With other sources of mortgage money ebbing, the RHS 502 mortgage has been more visible, and has had to endure several temporary shutdowns in funding this year. The Section 504 loan, for rehabs, has added another $1.5 billion to the tally.
The 502 loan comes in two flavors, a direct loan and a guaranteed loan. More than $66 billion of the direct loans have been obligated, and $73 billion of the loan guarantees.
One product that should become better used is the section 306C grants for water and waste disposal for “colonias” in Texas, New Mexico and Arizona. These colonias are unplatted settlements that cluster near our border with Mexico and feature the worst housing and sanitary conditions in America. Just 63 of these loans were obligated in fiscal 2010, for $224,938. All time, there have been 6,613 made, for more than $21 million.
While the isolation of rural areas can keep them off mortgage industry radar, rural areas still account for 20% of the nation’s housing and 80% of its land area.
