Where: Western United States

Issue: Low- and very low-income rural residents lack access to affordable housing, including traditional mortgages

Outcome: By increasing efficiency through strategic partnerships and improved access to affordable mortgages for rural organizations and residents, RCAC is promoting homeownership

Low- and very low-income rural residents often cannot qualify for a loan from traditional mortgage lenders. U.S. Department of Agriculture (USDA) Rural Development provides an alternative through its Single Family Housing Direct Loan Program (Section 502 direct loans), which provides subsidized mortgage loans for modest homes in rural areas. The applicants are generally first-time homebuyers.

With a high volume of loan applications, and decreased administrative resources, the USDA application and review process results in long waits for the applicants. To expedite the process, RCAC and other organizations participated in a pilot program, acting as “intermediaries” to support and train nonprofit housing organizations to become 502 loan packagers and to provide quality control for the locally generated loan application packages. The 2015 pilot program was so successful that USDA Rural Development issued a Final Rule to make it permanent.

RCAC reviews completed loan applications for accuracy and completeness before sending them to USDA RD for approval. By providing Rural Development with complete and decision-ready applications, the program has greatly reduced the processing and loan closing timeline.

RCAC provides training to qualified employers and certified packagers to ensure they are qualified to process loan applications.

For more information on RCAC’s 502 Direct loan program, go here.