Time is running out
You have read about the changes in the market, with city real estate increasing in price. More than escalating prices, there is another threat to low income buyers and it is getting closer.
For many the dream of getting out of a rental and into their own home is dependent upon zero down payment loans. One of the programs that has helped our less densely populated areas is the Rural Development loan offered by the United States Department of Agriculture (USDA). These USDA loans offer a way for people on fixed or lower incomes to afford their own homes. Statistically these homeowners are far less likely to default and end up in foreclosure with less frequency than those with conventional loans.
Since these loans are authorized for low density population areas, they have helped keep the market in our rural communities alive. Post Falls is a prime example. According to past reports, USDA loans have funded more than $68 million in real estate transactions there over the last several years. Last month, for the first time in a long time, we actually saw evidence of stability in that market as they posted a 2 percent gain in average price.
The 2010 U.S. Census report however, puts that marketplace in jeopardy. The report illustrates a
see COOPER, 2
COOPER
from 1
denser population in a majority of that city's geography which could eliminate its eligibility for the USDA guaranteed loans. Maps for the proposed Rural Development loans in Post Falls, if approved, will eliminate everything east of McGuire Road and south of Prairie Avenue. This then, will make the core of the city ineligible for the very loans that have helped stabilize that market.
Many young couples or older people with fixed incomes cannot qualify for conventional loans. These Rural Development loans have been a godsend to them and a blessing to the city as those people buy and occupy vacant, lower priced homes. These loans require no down payment and borrowers are not required to pay expensive mortgage insurance which keeps their payment low - often lower than the rent they may have paid before finding a USDA eligible home.
Arguably, the loss to Post Falls may prove to be a boon to other rural areas. Again, the loan is for communities with low population density, but may also increase the commute time for those working folks who make less than enough to qualify for a traditional loan. That increase in commuting fuel consumption, or probable mortgage insurance for those with less than 20 percent down, will no doubt price many out of the market.
There is still time though, to benefit from this program and if you want to live in Post Falls. If approved, the new geographic restrictions won't take place until the beginning of the USDA's fiscal year, or Oct. 1, of this year.
As with any who are anticipating a home purchase, the first step is to contact your lender, or the USDA directly to see if you qualify to buy a home. We have helped many who thought home ownership was out of reach, by utilizing this Rural Development program. Don't resign yourself to being a lifetime renter due to a lack of down payment. This program could help you and it certainly couldn't hurt the community where you will become a productive member.
Trust an expert...call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664.