Both HUD and USDA Rural Development programs support rural housing.
Key HUD rural programs:
- Rural Housing & Economic Development (RHED)
- Many HUD programs are used in rural and urban areas.
Key USDA Rural Development programs:
- 502 Single Family (direct and guaranteed loans)
- 504 Very low income repair loans & grants
- 515 Rental Housing Direct loans
HUD’s Rural Housing & Economic Development (RHED) Program:
- Funds capacity building at the state and local level for rural housing and economic development and to support innovative housing and economic development activities in rural areas.
USDA Rural Development Programs:
- Section 502 loans help low-income households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites. Very low income individuals who are unable to obtain credit elsewhere are eligible for direct loans. Applicants with up to 115% AMI and good credit are eligible for guaranteed loans.
- Section 504 loans and grants help very low-income single family home dwellers make repairs to improve, modernize, or remove health and safety hazards.
- Section 515 Rural Rental Housing loans are used principally for new construction of rental housing for low and moderate income families, elderly and disabled.
- The FY 2011 budget proposes funding rural housing programs at the same level as FY2010, with a decrease in Section 502 and 521 rental assistance and grants.
- Obama administration’s FY 2010 budget replaced RHED with a new $25 million Rural Innovation Fund as a set aside within CDBG. No funding is requested for either program in the 2011 budget.
- The FY 2010 budget was passed October 21, 2009. Funding for all USDA Rural Development programs is at about the same level as FY 2009 with some portions being increased. For details see below.
Funding:
The FY 2010 budget is roughly the same as FY 2009 with the exception of a few increases, including Section 502 Single Family Guarantee Loans which doubled to $12 billion.
USDA Rural Development FY 2010 funding is as follows:
- 502 single family: direct loans, $1.12 billion; guarantee loans, $12 billion
- 504 very low-income repair: loans, $34.4 million; grants, $31.6 million
- 515 rental loans: $69.5 million
Administration:
- HUD and USDA Rural Development administer their own respective programs.
- In MN, USDA Rural Development has 5 regional offices plus a state office.
Updated March 23, 2010.