502 Rural Housing Program Proposed for Decimation

Today the National Rural Housing Coalition sent a letter (below) to Tom Vilsack, the Secretary of the US Department of Agriculture, decrying the proposed funding reductions for the 502 Direct loan program.  The Administration’s own budget proposes reducing the funding for the 502 Direct program from $1.12 Billion to $200 million.

This reduction will impact Texas more than most states — USDA calculated Texas has the highest need for 502 Direct funds of any state.  Last year USDA Texas made 765 Direct loans to Texas families. (This number included 502 Direct loans under the ARRA program).

Last month the National Rural Housing Coalition released a report on the 502 Direct program that found that the total lifetime cost per unit for a Section 502 Direct Loan is $4,650.  The report states “There is not another federal program that provides assistance to low and very low income households at such a low cost.”

The National Rural Housing Coalition letter to Secretary Vilsack ends with a poignant statement about the federal rural housing budget: “Budgets are all about choices and this rural housing budget is certainly the wrong choice for rural America”