Best-kept Rural Housing Secret: 502 Direct Loans

I’m Sarah Young with NAR Government
Affairs, and I’m here with Kathy Glover who heads
up the section 502 Direct Loan Program at USDA and Washington DC. So, I know that there’s a section 502
Guaranteed Home Loan program that many people are familiar with. But, there’s also a section 502 Direct Home
Loan Program that people might not be as familar with, but it’s a good option for many rural home buyers. Can you tell me more
about the difference between the two programs and who might qualify for the Direct Loan
Program? Okay, so the 502 Guaranteed Loan Program is
a program that’s administered by agency approved lender. So, all of the loan processing is done by the lenders. The Direct Loan Program which is the
program we’re focusing on today is administered by the rural development
field offices. The big difference is the income
limitations on the guaranteed program, the income
limits are a little bit higher where’s they are much lower on the direct side. For example, the average 502 Direct
Loan borrower has an income of around thirty thousand dollars and they are
able to purchase a new or existing home. But, with such a low income. So, if I’m a home buyer and I’m interested in the Direct
Program, I go to my lender to find out about it or is there another process that I need
to be following? So, if they’re interested in a 502 Direct Loan Porgram, they should not go to their lender that would be for the
Guaranteed Program. On the direct side they should go to on of our local rural development field offices where they would actually collect and
process the application. make the eligibility determination and
um prep everything for loan closing. Okay, so, if I’m a real estate agent.what other things can I do to help a potential homebuyer use one of these rural home loan programs? Are there other tools that I could use, or resources
that I could direct my home buyer to? Well, there’s quite a few things that we
have on our website that could help a realtor. Prep a buyer for a home loan with us. Our
property and eligibility website actually contains all up the income
limits for the program it also contains the rural areas that would be very important to make
sure the loan is in a rural area they can find out information
there and they can actually put in the customers income and determine which program
would best suit them. So, I know that $900 million was
appropriated in 2015 for the Direct Loan Program. Is that
enough money to fund all the loans that people might be
interested in the program this year? Okay, that’s a very fair question. Yes, that is correct, we only have 900 million available for the 502 Direct
Loan Program this year. We do not foresee any problems meeting
the demand this particular physical year. Last year we were not able to um,
use all of the funds believe it or not when we had just nine hundred million
dollars. Should we get into a situation where we think we may be running out of funds. We will work closely with all
of our partners including the real estate agents to make sure they are aware funding situations before
an advocate can sign a contract. So, just to wrap up do you have any
success stories of a family that recently used the program? To give our members an idea of who, what kind of client they might be working with to use the Direct Program? Okay, yeah, I have I have a great story
of a young family uh, actually it was a single mother who
happened to be hearing-impaired. She had a daughter, and she did not grow
up in a single-family home, and all she wanted was a home for her
young daughter. So, we were able to assist her and
constructed a brand new home for herself and her young daughter which
is great story. That’s great. We’re really excited to
work with, we are so glad you came in today. And we’re dedicated to providing more
resources to members on I know we’ve we’ve committed to
developing some are frequently asked questions that we can provide to our
members, as well as information that I know
you’re planning to provide on the USDA website. Thank you for having me we’re glad to be
here and I’m so looking forward to working closely with your organization.

2 comments on “Best-kept Rural Housing Secret: 502 Direct Loans”

  1. Onii Bivens says:

    I submitted an application to the USDA Rural direct feld office here in NC in April, submitted all required documents. Was told I would be contacted regarding status. Fast foward, 4 weeks went by and heard nothing. I called them and was told they were still processing info. 2 more weeks went by mid- May and was told by someone else it was mailed to a person in Winston Salem. I called her and she said she has not seen a file on me and later called back that day and said it was under some other forms on her desk. LOL. She said she wasn't sure why I was told they were processing info. because she was the Tech that handles that and she just got my record. It took her 2 weeks, she finally ran my credit, etc. She communicated she is in the office only 2 days a week. Finally mailed it to loan officer at original office I initially spoke with. Loan officer was out of office about a week when I called. Loan officer says she just got paperwork a few days ago and working on someone else's and would take about 3 to 4 weeks before she could give me a answer regarding loan approval and letter. A week later got a letter asking for bank statements (previous ones were old by now.) I emailed her the documents, verified she got them. I called back in 3 weeks, a worker said she out of office be back next week. I called the fourth week and she acted as though she did not remember me and asked had I even submitted an application I said yes! Finally she found in her computer my info. and said she had not had a chance to look at it yet, check back next Thursday!!! I'll be calling tommorrow which is that time. Its been almost four months tops since initial application and I don't have an approval yet. Can't look for a house without knowing what I qualify for. This is unbelievable!!! They have the subsidy that's why I been trying to hold on a few but I almost wanna try the Guaranteed loan. Any suggestions???

  2. Michelle Young says:

    Racist as fuck

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