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October 12, 2024 – FRESNO, Calif. – U.S. Representatives Jim Costa (CA-21), Lori Chavez DeRemer (OR-05), and Doug LaMalfa (CA-01) have introduced H.R. 9814 – Rural Homeownership Continuity Act, bipartisan legislation that would help families attain federal loans at lower interest rates, making the American dream of homeownership more affordable in rural America.
“The Rural Homeownership Continuity Act represents a vital step forward towards strengthening communities in the San Joaquin Valley and rural America,” said Costa. “By helping families take advantage of lower interest rates, we’re not just making homeownership more attainable, but fostering stability and economic growth. Every family deserves the chance to build a future in a home they can afford.”
“Oregon is ranked the fifth-most unaffordable state for local homebuyers, and all of our communities – urban, suburban, and rural – have felt the effects of this affordability crisis. Too many Oregonians are forced to work multiple jobs just to afford their mortgages,” Chavez-DeRemer said. “That’s why I’ve been working to find bipartisan solutions that will make a direct, lasting impact. I’m honored to help introduce the Rural Homeownership Continuity Act, which will improve housing affordability and access in our rural communities.”
“As we face a growing rural housing crisis in California and across the country, I’m happy to support this bill that removes bureaucratic barriers to low-income residents’ ability to achieve homeownership. By streamlining the process of loan transfer, this legislation makes it easier for rural families to get the financing they need to own a home,” said LaMalfa.
WHAT ARE THEY SAYING?
“Unfortunately, this year has brought a crisis to both the families that we serve and the families that depend on our business. The approved funding for USDA Home Loans in California has been depleted, leaving families in limbo, unable to close on their new homes. These families, some of whom have been waiting for over a year and a half, continue to live in substandard conditions while brand-new homes sit completed and ready for occupancy,” said Leonel Alvarado, Century Builders.
“USDA’s Section 502 Guaranteed Loan program provides low- and moderate-income rural families across the country with a tool to achieve homeownership. And it is an example of a great public-private partnership between local lenders and USDA,” said Jonathan Harwitz, Director of Public Policy at the Housing Assistance Council. “We applaud Rep. Costa, Rep. Chavez-DeRemer, and Rep. LaMalfa for really looking into the nuts and bolts of this important program and identifying commonsense technical fixes. This bill will make the Section 502 Guarantee program more user-friendly for rural families looking to buy a home.”
BACKGROUND
The Section 502 Single Family Housing Loan Guarantee Program is a mortgage assistance program within USDA that assists with lending for low- and moderate-income households buying homes located in eligible rural areas.
In rural communities, where access to affordable housing is often limited, the Rural Homeownership Continuity Act would amend the Housing Act of 1949 to permit loan assumption under Section 502 to release departing borrowers from liability when their loans are assumed by new borrowers.
Right now, when someone sells a home that has a USDA Section 502 Guaranteed Loan, the buyer can’t transfer the seller’s low interest rate. Instead, they often must settle for higher rates from private lenders—averaging around 6% in California. In contrast, existing USDA loans can offer rates as low as 3-4.5%, and even down to 1% for very low-income buyers. This difference can save families a lot of money over time.
The Senate version of the bill, S.4971 was introduced by U.S. Senator Peter Welch (D-VT).
View the text of the bill HERE.
Source: Congressman Jim Costa
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Publish date : 2024-10-12 02:39:00
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