USDA Rural Development Program Faces Cuts, Despite Strong Demand

Tighter credit has meant more business for the U.S. Department of Agriculture Rural Development program, which guarantees loans for rural homebuyers.

However, even as demand goes up, the program faces cuts.

Across the country, those who lost their homes to foreclosure tried to rent. The market was tight, especially in rural communities. The USDA Rural Development program recently helped seven different communities in southern Wisconsin rehabilitate multifamily units.

Stan Gruszynski is the state director of USDA Rural Development.

Gruszynski: “People are looking for rental units – they can’t afford to build, [and] they can’t afford to buy. Oftentimes, in these smaller communities there’s no place for these people to go.”

The program also guarantees loans for homebuyers. The foreclosure rate in 2011 was 3.3 percent.

Gruszynski: “Our delinquency rate with the guaranteed program is less than the national average on commercial lending. So we do a good job with that program.”

But some say rural housing hasn’t been a funding priority. Bob Rapoza with the National Rural Housing Coalition points out that since 2010, funding was reduced by $400 million. The USDA’s budget request cuts $100 million more from rural development.

Rapoza: “In the context of the federal budget, what is spent on rural housing is tiny…as compared to what is spent on other things.”

Rapoza says the return outweighs the expense: Construction jobs are created and families get homes.