Home sweet home: Program turns residents into homeownersHomeownership plays a vital role in improving lives, as well as in strengthening neighborhoods and the economy.
By: By Marit Aaseng, Intern Reporter, Alexandria Echo Press
Homeownership plays a vital role in improving lives, as well as in strengthening neighborhoods and the economy.
Recently, USDA Rural Development in Minnesota received $20 million in Recovery Act funds to help low and very-low income individuals and families achieve their dreams of homeownership in rural areas.
The funding goes toward Rural Development’s low income direct home loan program, which offers 100 percent financing and low interest rates.
In June, USDA recognized several individuals and families who used this program, including Melissa Miller of Brandon and Jessica Botten of Alexandria.
Miller became a first-time homeowner in late April, after nearly 10 years of renting. She and her two children moved into the home she built in Brandon along with West Central Minnesota Community Action, using a USDA Rural Development direct home loan.
“This loan has helped us tremendously,” said Miller. “Without this program, we wouldn’t have been able to get into a home, much less a brand new one.”
Allan Cowles, an area specialist for USDA Rural Development, said they wanted to recognize someone like Miller because “we admire her hard work. She put herself through school, works two nursing jobs to support her two kids, and worked diligently to obtain acceptable credit standards that meet RD regulation. She is prototypical of many applicants.”
Botten is another hardworking homeowner. In early December, she closed on her first home, which is located in an established neighborhood – a safe place to raise her disabled daughter. This was made possible by a USDA direct home loan.
“My daughter has a place she can truly call ‘home’,” said Botten. “Being a single mom just got a little easier, like a weight was lifted.”
Botten recently graduated from Alexandria Technical College, and now is employed as a phlebotomist at the Douglas County Hospital. She has actively recommended other people to the same program that helped her.
“Jessica had also rented for many years and wanted a better environment for her family. She is another example of how this program can make a difference,” Cowles said.
The goal of the USDA’s direct home loan program is to help people who can’t find decent, safe and sanitary housing through conventional means – usually low-income or one-income households with children – to obtain a secure home.
Households with an income of 80 percent or less of the county median household income qualify for the program, if they have acceptable credit. Households with 60 percent or less of the county median income receive an interest rate subsidized down to 1 percent. More than two-thirds of qualified applicants receive the 1 percent subsidized interest rate, and therefore a low-income household can qualify for more than double what they would have qualified for elsewhere with normal interest rates.
A home rehabilitation program is also administered by Rural Development and offers loans, up to $20,000, at 1 percent interest amortized over 20 years to low-income individuals in households at 60 percent of median income or less. The 504 program also offers grants up to $7,500 in order to address health or safety issues in homes owned by individuals 62 or older. Recipients must meet the income and credit requirements.
According to Cowles, the demand for these programs is immense, especially in the current economy. On average, Rural Development deals with 30 to 40 mortgages per year in the nine-county area covered by the Alexandria office, in addition to assisting dozens of homeowners with rehabilitation grants and loans.
This year, Minnesota has used more than $35.4 million to help 301 rural families achieve home ownership through the direct home loan program.
“Our mission is a vibrant rural economy…safe, decent, sanitary housing is necessary for rural communities,” said Cowles.
This goal is being reached one homeowner at a time.
“I never dreamed I would own a home,” Miller said. “It’s still kind of surreal, but we did it.”
For more information about all of the Rural Development housing, business, and community building programs, contact Allan Cowles at firstname.lastname@example.org or visit www.rurdev.suda.gov/mn.