It’s oddly quiet when it comes to Rural Development
For the past couple of months, both mortgage bankers and Realtors throughout Arkansas – and the nation – have been waiting to hear news about more federal money heading for the United States Department of Agriculture’s Rural Development.
We’ve not heard a whole lot about that program from politicians in Washington lately and that’s odd.
The Rural Development program has been a boon to real estate sales in Arkansas. Simply put, people buying homes backed by that program have been able to secure now uncommon “zero down” mortgages.
Here in Arkansas, people purchasing homes have been able to secure Rural Development loans in parts of the state that one might be surprised are defined as rural. Cities such as Bentonville and Bryant are rural areas under the program and, therefore, have grown quite a bit thanks to the availability of Rural Development loans.
At the first of April, bankers reported that Rural Development officials had said the program was due to run out of money by the end of that month. They were talking, of course, about a program guaranteeing loans through private lenders – there is still some money left for borrowers going through Rural Development’s direct loan program.
Of course, the news about Rural Development’s pending lack of funds didn’t concern anyone too much at the time. Congress routinely pumps more money into the program when it starts to run out of cash prior to the end of the fiscal year.
April came and went and funds weren’t sent to Rural Development. U.S. Senators Blanche Lincoln and Mark Pryor – both Democrats representing Arkansas – assured Realtors in May that a new round of funding would likely be sent to the Rural Development program by the end of May. The Senate, in fact, passed a bill that would send more money to Rural Development – the ball is in the House of Representative’s court now and has been there for some time.
We’re almost through June and there’s still no sign of more money for Rural Development. Furthermore, there’s not much information from the National Association of Realtors, the national Mortgage Bankers Association of America or, well, anyone about when more Rural Development funds will be available.
A problem with that state of affairs is that there are a lot of people in this state depending on Rural Development loans to come through so they can close on homes they’ve purchased. Realtors in Arkansas are reporting they’ve had deals fall through for want of Rural Development money – not exactly the kind of thing that will help a housing market that is still recovering.
Worse yet, there are a number of people who bought homes in March and April in hopes of receiving a first-time or repeat buyer tax credit from the federal government. In order to receive a credit, eligible buyers were required to get homes under contract before May 1 and close on them before July 1.
Congress is working on legislation to extend that deadline to Sept. 30, but there are a lot of people who bought homes in hopes of receiving both tax credits and a Rural Development mortgage. It will be a shame if they aren’t able to close on those homes, particularly since they entered agreements to purchase them due – in part – to promises made to them by the federal government.
This column is part of the House to House series, which is written by Ethan C. Nobles and distributed weekly to newspapers throughout Arkansas on behalf of the Arkansas Realtors Association.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.