By Suzanne Anarde-Devenport, RCAC Chief Executive Officer

As the housing crisis continues to impact families across the country, it’s important to remember that while access to decent affordable housing is a universal need, the challenges are different from community to community. And rural communities are often left out of the discussion.

When I think of the U.S. Department of Agriculture’s Mutual Self-Help Housing and its impact, I often pause to consider what an amazing financing vehicle the USDA 502 Direct mortgage program is for rural America. It has been a mortgage financing staple in rural communities for more than 60 years, yet we often take for granted what a powerful tool the 502 program is for building and sustaining affordable rural housing.

I bought my first home with a 502 Direct Loan. It was surreal to me that I could qualify for a mortgage to buy my dream house—a small, older farmhouse in rural New Mexico. And when my mom died in 1986, I adopted my 5- and 11-year-old sisters … as a 25-year-old. The fact that I owned a home was a huge factor in the court’s decision to approve the adoption. Access to a 502 mortgage changed our life’s trajectory.

Since then, rural America’s housing challenges have grown at a dizzying pace, driven by a potent blend of factors that have left too many families and young folks scrambling to find affordable, stable homes. The gap between the haves and have-nots keeps widening, and sluggish wages aren’t helping either. The decline of manufacturing industries has led to job losses and a shift towards lower-paying service sector jobs, making it even harder for families to find housing that fits their budgets.

Meanwhile, the surging popularity of short-term vacation rental platforms has placed extra pressure on rural communities, further stretching their already tight resources. Inflationary pressures and the lasting impact of COVID-19 intensify these challenges, leaving many rural households struggling to find housing or even facing the harrowing and all-too-real threat of homelessness.

The national stats on the program are truly impressive. The Section 502 Direct Loan Program has helped more than 2.1 million families realize the American Dream and build their wealth by more than $40 billion. It is the only federal homeownership program that is exclusively targeted to very low- and low-income rural families.

Currently, with a Section 502 Direct Loan, these families can access affordable, safe mortgages with interest rates starting at just one percent over a 38-year term. And Section 502 is the single, most cost-effective federal housing program; on average, a Section 502 loan costs $3,000 over its entire lifetime.

Despite the program’s success, demand for rural housing outpaces supply. Section 502 waiting lists typically have 12,500 loan applications amounting to $1.5 billion, and the program is often zeroed out in federal budget proposals. This tried-and-true program is essential to rural communities’ sustainability. And, in fact, it is incumbent on us to ensure that the program becomes more readily available in Black, brown and persistent poverty communities to better support those communities and residents in their quest for homeownership, wealth building and equity.

As we celebrate the USDA programs’ undeniable successes, we must also recognize the long and potentially tough road ahead. Urgent action is required to address the growing waiting lists, expanding housing crisis, and rising economic insecurity in rural America.

Between 2018 and 2022, self-help builders completed 680 new construction and 128 rehabilitated homes in the rural parts of California.  During that same time USDA financed 2,535 rural California homes using and leveraging Section 502 Direct program loan funds.  Impressive numbers, particularly when you factor in the impact of COVID during this time frame.

Congress is now beginning the budget debate for the coming fiscal year. We hope that members of Congress will recognize that the affordable housing crisis extends to rural America and that they’ll support increases in rural housing programs, such as the ones we’ve used throughout the rural west.

A good place to start is the recommendations made by the National Rural Housing Coalition.  You can also access housing data on the Housing Assistance Council website.


Also in this issue of Self-Help Builder: