Our nation has been celebrating June as National Homeownership Month, a time to note our accomplishments as a nation in achieving the American dream.

According to recently released Census figures, the rate of homeownership by Americans - at 68 percent for the First Quarter of 2002 - continues at a record level. This is true in every region of the country, among all races and ethnic groups, for all age categories and among all levels of income.

The picture is even brighter in America's rural areas. For more than 35 years, the homeownership rate outside metropolitan areas has exceeded 70 percent. At the end of 2001, it was an even 75 percent, according to Census reports.

Part of the success among these diverse groups and in rural areas can be attributed to a long-time federal program. For more than 50 years, the U.S. Department of Agriculture has been making loans directly to low-income families to purchase their own homes.

Administered by USDA Rural Development's Rural Housing Service, the Section 502 Direct Loan program was established by the Housing Act of 1949. The first loan was closed in 1950. The program was made available to non-farmers, beginning in 1961.

More than $55 billion and millions of homeowners later, the basics of this successful program remain the same. It provides an opportunity for those shutout by other lenders to own their own home. It works by making loans available to low-income families with no down payment and installments reduced to a one-percent interest rate level. As the household becomes established - increasing income and building equity in the property - the loan, including part or all the assistance received, is repaid. This allows low-income, rural families to share in the American dream of homeownership, along with all its benefits. It has clearly contributed to the high overall rate of homeownership.

In Fiscal Year 2001, Section 502 Direct Loans totaling $1.064 billion were provided to more than 15,600 families to buy their own home. In addition, the Rural Housing Service guaranteed more than 30,000 loans of $2.3 billion from other lenders (through a program begun in 1990), allowing slightly higher income households to buy homes without down payment at competitive rates and terms.

Another $61 million was provided in low-interest loans and grants for repairs and

improvements to nearly 12,000 of the poorest rural households, especially the elderly.

So far in Fiscal Year 2002, 8,000 households have obtained direct loans to purchase their own home, 16,500 have received loan guarantees and more than 7,200 have benefited from low interest loans and grants to make necessary repairs or improvements to their existing homes.

Rural Development in Kansas returned a total of $48,975,800 to our State for homeownership loans and guarantees in Fiscal Year 2001. We were able to provide homes and needed repairs to 1,061 households. Of this total, 591 families bought homes through the Guaranteed Loan Program to the tune of $33,356,870. Direct loan programs provided another 280 families with the responsibility of homeownership for a total of $15,160,600. Another 207 families were able to repair their homes and remove health and safety hazards through Rural Development's 504 loan and grant programs. Section 504 loans and grants totaled $946,790.

The Rural Development staff across Kansas continues to work diligently to bring additional federal dollars into the State. As in previous years, Fiscal Year 2001 loan totals greatly surpassed the amounts originally earmarked for Kansas. Rural Development offices have provided $49,494,260 of federal loan and grant dollars to our State -- a 38% increase over the Nationally allocated amount.

We at Rural Development appreciate the opportunities to serve the residents of rural Kansas and an economically stronger Kansas provides for a healthy state. For further information about the programs of USDA Rural Development, please visit our web site at: http://www.rurdev.usda.gov/ks/

Chuck Banks

State Director

Kansas USDA Rural Development