|(JUNE 13, 2011)PALMYRA RURAL RENTAL HOUSING CORPORATION SAVES TAXPAYERS $24,871.92 PER YEAR IN SUBSIDY|
|Palmyra, MO, Jun 13, 2011
PALMYRA RURAL RENTAL HOUSING CORPORATION SAVES TAXPAYERS $24,871.92 PER YEAR IN SUBSIDY
On Monday, June 13, 2011, at 5:00 p.m., the Board of Directors of Palmyra Rural Rental Housing Incorporated held an open house to celebrate the reamortization of their loans. The property, which consists of 42 one bedroom apartments, was originally constructed with funds from the United States Department of Agriculture. The apartments were originally constructed in two phases, between 1973 and 1978. The interest rates of the original loans ranged from 7.25% and 8.5%.
The board requested approval to reamortize their unpaid balances specifically to reduce the interest rate and to reduce their loan payments. Their request was approved by USDA and the loans were reamortized.
The reamortization resulted in a reduced payment to Rural Development (savings of $3,652.92 per year), and reduced government subsidy to the property due to the decreased interest rate. Prior to the reamortization, the rents were $245 to $291 for the first phase of the project and $255 and $325 for the second phase. At the time of reamortization, the board implemented a rent change and set the rents at $265 to $273 for the entire complex. The utilities are included with the rent.
In addition to the savings to the tenants in rents, the reamortized loan results in savings to the government. Through the reduction in interest rates, the amount of subsidy that the government provides is reduced. This reamortization results in an annual savings to the government of $24,871.92 and will result in $497,438.40 in savings for the 20 year life of the loan.
“I am happy to celebrate the reamortization of the loans for the Palmyra Rural Rental Housing Incorporated” said Anita J. Dunning, Missouri State Director for USDA Rural Development. “The lower interest rates will help keep the rental rates affordable for our tenants by reducing the mortgage payments on the rental complex.” Larry Vaughn, Board President, and the board of directors of Palmyra Rural Rental Housing Incorporated, were presented a certificate of appreciation from USDA Rural Development.
Affordable rental property in rural areas is an important part of any rural area. Apartment living can be an alternative for many people who cannot afford the purchase price of a home or may not be able to maintain a house. The USDA Rural Development, through the Rural Rental Housing (RRH) program, provides assistance to rural communities in meeting the needs of adequate, safe and affordable housing.
Since the beginning of the RRH program in Missouri in the late 1960’s, Rural Development (formerly Farmers Home Administration) has financed over 900 rental projects in 113 of the 114 Missouri counties. Through the hard work of dedicated citizens that volunteered their time working through a non-profit corporation, such as Palmyra Rural Rental Housing Incorporated, this federal program has benefited many rural communities.
For those interested in rental projects funded by USDA Rural Development in a particular county, you can access information by visiting http://www.rurdev.usda.gov/mo/mfhpage.htm and follow the instructions. The name of the complex, type of apartments (elderly or family), number of apartment units and the contact person are available online.
Anyone seeking more information about the Rural Rental Housing program or any other USDA Rural Development program may visit the homepage at http://www.rurdev.usda.gov/mo/, or contact Rande S. Bryan, Area Director, firstname.lastname@example.org, 2410 South Franklin Street, Kirksville, MO 63501 at (660) 665-3274, extension 4.