USDA ENTERS ALLIANCE TO HELP RURAL PEOPLE BUY HOMES
WASHINGTON, June 4, 1998 -- Agriculture Secretary Dan Glickman today announced the signing of an agreement under which the U.S. Department of Agriculture will join an alliance that helps low- and moderate-income rural Americans buy homes. The Affordable Housing Finance Alliance will accomplish this goal by helping to improve access to credit in rural areas and by educating rural residents about programs that can help them become homeowners.
USDA's partners in the alliance are Rural Opportunities Inc., a major nonprofit housing provider, Freddie Mac, a stockholder-owned company which provides funds to mortgage lenders, and the Mortgage Guaranty Insurance Corporation.
"This alliance will establish a new model for delivering credit to people traditionally left out of the mortgage market," Secretary Glickman said. "Today, a record 65.7 percent of all U.S. households own their homes. But we are not content. USDA is committed to helping President Clinton meet his goal of creating 8 million new homeowners by the end of the year 2000. This alliance will play an important role in meeting the president's goal."
The alliance will seek to establish long-term business relationships between the private mortgage industry, nonprofit community-based organizations, the secondary mortgage market, the private mortgage insurance industry and the federal government.
The role of Rural Opportunities Inc. will be to provide outreach and technical assistance to rural residents who don't qualify for conventional home loans. Its efforts will range from counseling them about what it takes to become a homeowner to helping them file loan applications. USDA Rural Development will guarantee the loans, Freddie Mac will buy the mortgages on the secondary market and Mortgage Guaranty Insurance Corporation will insure the mortgages.
The alliance will concentrate its efforts in rural areas of a six-state region, including New York, Pennsylvania, New Jersey, Ohio, Indiana and Michigan.
"Every year, USDA housing programs enable 50,000 to 60,000 low- to moderate-income rural Americans to buy their own homes and help another 450,000 low-income rural residents rent apartments or houses," said Jill Long Thompson, USDA under secretary for rural development. "When rural residents achieve homeownership, they not only realize the American dream, they also contribute to a healthier economy and help build strong rural communities."
Glickman said that the agreement is particularly timely because next week (June 6-13) is National Homeownership Week. A variety of housing-related events will take place during the week, including Glickman's participation in an actual "working session" for a "self-help" home in Taneytown, Maryland on June 9.
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