On Tuesday, the Financial Services Committee [1] (FSC) Subcommittee on Housing, Community Development and Insurance held a hearing titled “The Affordable Housing Crisis in Rural America: Assessing the Federal Response”. Hearing witnesses included Gideon Anders, Senior Staff Attorney, National Housing Law Project; Stan Keasling, President, National Rural Housing Coalition; David Lipsetz, Chief Executive Officer, Housing Assistance Council; Andres Saavedra, Senior Program Officer, Rural Local Initiatives Support Corporation; and Tanya Eastwood, President, Council for Affordable and Rural Housing.
According to a memorandum released by the FSC, rural areas are set apart from urban areas due to several distinct features. For example, rural areas tend to have comparatively high homeownership rates, however, the Committee notes that the quality and value of housing is comparatively lower than other areas of the country.
“Changes in the rural economy have negatively affected the job markets in many rural areas, contributing to higher poverty rates and severe housing affordability issues,” the memo notes. “The aging housing stock in rural areas has also resulted in higher rates of residents living in moderately or severely substandard housing that may, for example, lack basic plumbing, and pose a risk to the health and safety of residents.2 Moreover, racial minorities in rural areas are three times more likely to live in substandard housing, putting them among the worst-housed demographic group in the entire nation.”
Witnesses proposed solutions to issues faced by rural homeowners. For example, In his statement, Gideon Anders proposed an amendment to RD single family direct loan program.
Under Section 505(a) of the Housing Act of 1949, RD is authorized to extend a moratorium on payments to homeowner borrowers whenever the borrower is unable to continue to make mortgage payments for reasons beyond the borrower’s control without unduly impairing his or her standard of living,” Anders notes. “In cases of extreme hardship, RD is also authorized to forgive interest accrued on the loan during the moratorium period in order to facilitate the borrower’s capacity to resume making mortgage payment.”
He adds, “borrowers who face hardship, such as the loss of a job or a medical emergency, are frequently unable to resume making regular mortgage payments at the end of a moratorium, let alone make higher mortgage payments.”
Find more on the Hearing here [1], including the complete webcast.