tsai3904
03-18-2013, 09:17 AM
Good read on a program intended to help low income people buy homes in rural areas that has spread to near millionaires in urban areas. Payments by the Dept of Agriculture to lenders on losses are rising fast and homebuilders are lobbying to extend the program that expires when the continuing resolution expires on March 27.
A rural housing program city slickers just love
Dotted with swimming pools and golf courses, the thriving seaside enclave of Ewa Beach perches just down the coast from bustling Honolulu, Hawaii. The island-style homes fronting palm-fringed streets offer views of two mountain ranges and proximity to some of the best big-wave surfing in the world.
This resort community, where houses sell from around $200,000 to more than $1 million, enjoys another perk: easy access to no-money-down home mortgages, guaranteed by the U.S. Department of Agriculture. The guarantees are provided to qualified homebuyers courtesy of the farm agency's rural housing program, created in 1949 to help lower-income Americans in rural areas who lacked access to "safe and sanitary dwellings" and couldn't get credit any other way.
Reuters found at least 250 of the loans in the Ewa Beach area. It also found them in a lot of other places that aren't very isolated or very rural: Los Angeles; Washington, D.C.; Austin, Texas; Seattle, Washington; and Tampa, Florida. The mortgages pop up near Silicon Valley's Sand Hill Road, the main drag for high-tech venture capital, and a short distance from the headquarters of Google, Facebook and Apple, as well as in dozens of small to midsize cities across the United States, from Salinas, California, to Spring Hill, Florida.
Durwood Canaday and his wife, Lisa, used a zero-down, USDA-backed mortgage last year to buy a 102-year-old house in Benson, North Carolina, for $84,000. "I could have bought a house another way," says Durwood, a semi-retired advertising executive, who lives less than a 30-minute drive from his office in Raleigh. "But this allowed us to travel, and our hope in a few years is to purchase a beach property in Surf City that we can rent out now and retire in later."
More:
http://www.reuters.com/article/2013/03/18/us-usa-mortgages-usda-special-report-idUSBRE92H0CO20130318
Here's the audit report on the Single Family Housing Guaranteed Loans progam:
http://www.usda.gov/oig/webdocs/04703-0003-HY.pdf
Loss claims the Dept of Agriculture had to pay lenders for borrowers inability to pay (USDA pays up to 90% of loan loss):
2008: $103 million
2009: $191 million
2010: $198 million
2011: $295 million
2012: $496 million
A rural housing program city slickers just love
Dotted with swimming pools and golf courses, the thriving seaside enclave of Ewa Beach perches just down the coast from bustling Honolulu, Hawaii. The island-style homes fronting palm-fringed streets offer views of two mountain ranges and proximity to some of the best big-wave surfing in the world.
This resort community, where houses sell from around $200,000 to more than $1 million, enjoys another perk: easy access to no-money-down home mortgages, guaranteed by the U.S. Department of Agriculture. The guarantees are provided to qualified homebuyers courtesy of the farm agency's rural housing program, created in 1949 to help lower-income Americans in rural areas who lacked access to "safe and sanitary dwellings" and couldn't get credit any other way.
Reuters found at least 250 of the loans in the Ewa Beach area. It also found them in a lot of other places that aren't very isolated or very rural: Los Angeles; Washington, D.C.; Austin, Texas; Seattle, Washington; and Tampa, Florida. The mortgages pop up near Silicon Valley's Sand Hill Road, the main drag for high-tech venture capital, and a short distance from the headquarters of Google, Facebook and Apple, as well as in dozens of small to midsize cities across the United States, from Salinas, California, to Spring Hill, Florida.
Durwood Canaday and his wife, Lisa, used a zero-down, USDA-backed mortgage last year to buy a 102-year-old house in Benson, North Carolina, for $84,000. "I could have bought a house another way," says Durwood, a semi-retired advertising executive, who lives less than a 30-minute drive from his office in Raleigh. "But this allowed us to travel, and our hope in a few years is to purchase a beach property in Surf City that we can rent out now and retire in later."
More:
http://www.reuters.com/article/2013/03/18/us-usa-mortgages-usda-special-report-idUSBRE92H0CO20130318
Here's the audit report on the Single Family Housing Guaranteed Loans progam:
http://www.usda.gov/oig/webdocs/04703-0003-HY.pdf
Loss claims the Dept of Agriculture had to pay lenders for borrowers inability to pay (USDA pays up to 90% of loan loss):
2008: $103 million
2009: $191 million
2010: $198 million
2011: $295 million
2012: $496 million