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Achieving the American Dream through Programs that Work

Alton and Robin Alexander lived in Western Michigan with their two daughters in a comfortable, modest and safe neighborhood prior to the Great Recession. However, as the nation’s economy struggled, this family of four lost their home and was forced to move into a substandard rental unit. The Alexanders’ story is not unique. Homeownership is considered a central tenet of the American Dream, but its value to families and communities is sometimes overlooked. June is National Homeownership Month, which shines a spotlight on the value of homeownership. For many low and moderate income rural families, homeownership is only possible through financing from U.S. Department of Agriculture (USDA) Rural Housing Service programs. In Fiscal Year 2015 alone, USDA Rural Development awarded $900 million Section 502 direct single-family housing loans and made more than $18.6 billion Section 502 guarantees to help more than 141,000 rural American families become homeowners. One of those families is Jeff, a single father, and his four children in Morristown, Tennessee. Back injuries limited Jeff’s ability to work and the family lived in a doublewide trailer. Eventually the family moved in to affordable rental housing owned and maintained by Clinch-Powell RC&D, a Federation of Appalachian Housing Enterprises (FAHE) Member. With assistance from Clinch-Powell, Jeff applied for a Section 502 Direct loan. FAHE helped prepare the application. Jeff and his children will soon be moving into their new home. The Section 502 direct program is also an essential tool for the Mutual Self-Help Housing Program, where groups of six to 12 families are paired together to help build each other’s houses with technical assistance from non-profit organizations. This program, which includes more than 100 Self-Help Grantee Organizations in 40 states and territories, celebrated its 50th anniversary in 2015, and has helped more than 50,000 families build their own homes. The Self-Help housing program is bigger than just homeownership: through the technical assistance from organizations like the Coachella Valley Housing Corporation (CVHC), this program allows families to gain financial stability and builds communities where children can thrive. For example, in Mecca, California, CVHC helped the Rodriquez family, including four children, move from their dilapidated rental apartment into a safe, clean rental complex, and eventually to become homeowners through the Mutual Self Help program. Juan Rodriguez, one of those children, went on to graduate from UC Berkeley, and now helps CVHC improve the community he grew up in. The success...
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Fahe Partners with USDA and WV Housing Development Fund to Help Low-income Families Access Affordable Housing

The Federation of Appalachian Housing Enterprises, Fahe, is one of several nonprofit organizations that participated in USDA’s loan packaging pilot program, which became permanent in May 2016.  They are working to further expand the reach and scope of the Section 502 Direct loan program to assist low-income rural families in achieving homeownership.  To achieve this goal, Fahe has partnered with the West Virginia Housing Development Fund (WVHDF) and the U.S. Department of Agriculture (USDA).  For the first time a state housing agency, WVHDF, will package USDA Section 502 Direct loans. Fahe will serve as the intermediary for the loans. A ceremony was held at the WVHDF offices in Charleston, WV in recognition of this important event.  Presenters at the ceremony included Jim King, CEO and President of Fahe, Erica Boggess, Acting Executive Director of WVHDF; Bobby Lewis, USDA West Virginia State Director; and Tony Hernandez, USDA Administrator for the Rural Housing Service.  Additionally Mary Elisabeth Eckerson read on behalf of Senator Shelly Moore-Capito, Sara Payne Scarbo read remarks for Senator Joe Manchin, Payne Warner read remarks for Congressman Alex Mooney, and Brian Aluise read for West Virginia Governor Earl Ray Tomblin. During the ceremony, Administrator Hernandez presented Fahe an award in recognition of the organization’s effort as a Champion of Rural Housing, and for their impact and achievements on the Section 502 Direct loan program.  Jim King said that in the past 6 years of partnership with USDA, Fahe has placed over 807 hardworking families in new, safe and affordable homes through the Section 502 Direct program. To read more about the partnership, please read the press release on Fahe’s...
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Spotlight on the FY 2017 House and Senate Agriculture Appropriations Bills

This is a moment in time when avoiding disaster with Congress or the Administration is viewed as a success, and seeking even the most modest improvements in policy or resources seems out of the question and hopelessly optimistic.  In light of these conditions, for those interested in improving housing and communities in rural America, the House (H.R.5054) and Senate (S.2956) Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations bills for Fiscal Year (FY) 2017 are, in separate ways, remarkable. Even though both bills had overall allocations amounts less than the enacted level in FY 2016, the FY 2017 bills reported by the Appropriations Committees of both Chambers increased rural housing and rural development spending above the current FY 2016 levels and well above the FY 2017 USDA Budget request.  Both the House and Senate Appropriations Committees sought to improve rural housing conditions in their Agriculture Appropriations bills for FY 2017, but by different routes. The House Appropriations bill includes $21.3 billion in discretionary funding, over $450 million lower than the FY 2016 enacted level, and $281 million below the Administration’s request for FY 2017.  Of the total, $2.88 billion of the funding is for rural development programs – more than $110 million more than the level enacted in FY 2016.  The House bill includes $24 billion in loan authority for the Section 502 Single Family guarantee program, and $1 billion for the Section 502 direct loan program – an increase of $100 million over the FY 2016 enacted level, as well as the President’s budget request. This is the first increase in direct homeownership loans in several years. The House bill also provides an increased funding for Mutual and Self-Help Housing Technical Assistance Grants – funding the program at $30 million, which is $2.5 million more than the Senate bill and $12 million more than the Administration’s request. [See chart below: “Section 523 Mutual and Self-Help Housing TA”]. The House Agriculture Appropriations Bill also recommends more funding for Farm Labor Housing programs than the Senate bill.  The House bill includes $8.4 million for Section 516 Farm Labor Housing Grants, which is about $60,000 more than the Senate bill.  The House bill recommends a funding level of $23.9 million for Section 514 Farm Labor Housing loans, which is an increase over the Senate bill ($23.857 million), the Administration’s request ($23.857 million) and the enacted amount for FY 2016...
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Spotlight on Migrant Farmworker Housing

A recent article published by the Statesman highlights the devastating housing conditions many migrant farmworkers are facing across America, and particularly in Texas.  The article, aptly titled “Unbelievable” by Jeremy Schawrtz, explains how, in spite of existing laws that require housing facilities for migrant farmworkers to be inspected and licensed to ensure minimal health and safety conditions, many of these properties are never inspected, or, if they are inspected and problems are discovered, the owners of the properties face no penalties. In fact, as the Statesman’s investigation uncovered, Texas, unlike other agriculture states, provides no funding to ensure safe and sanitary housing facilities for migrant farmworkers.  In addition to the lack of funding and lack of inspections, the state agency responsible for inspecting migrant farmworker housing facilities also does not engage in any outreach to determine if unlicensed facilities are being used.  Even where complaints do reach the agency, there is frequently no follow-up to determine if the problems reported have been addressed. To read the article, please click here. The article will be published in print in the Statesman on...
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Under Secretary Mensah Meets with Central Valley Family Using USDA Funds for New Water Well

While in California last week, U.S. Department of Agriculture Under Secretary Lisa Mensah toured a self-help housing tract that Self-Help Enterprises is developing in Merced County and visited with a family that is a recipient of USDA funds. Representative Jim Costa (D-CA) was also on the tour. Under Secretary Mensah and Congressman Costa met with the Cabrera family, of Madera, California, who have spent the past two years without running water.  According to Tom Collishaw, the President and CEO of Self-Help Enterprises, the Cabreras are one of around 2,000 families in the rural Central Valley who are suffering from water shortages due to drought.  For the past two years, the Cabreras were forced to buy water to do basic tasks such as wash dishes and flush toilets, and to go to their children’s home to shower.  The Cabrera family, with help from Self-Help Enterprises, secured USDA funding, which includes a grant for a new electrical panel and a much needed loan to finance a new water well.  The Cabreras now have running water through a temporary water tank, and a permanent water well will be installed sometime in February.  For more information on the Under Secretary’s trip and the Cabreras, please read Dale Young’s article from ABC 30 Action News and Gregory Woods’ article on...
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Spotlight on the Intermediary Relending Program

The Intermediary Relending Program (IRP) was first enacted in the 1980s and has had remarkable success in strengthening rural communities through investment in local projects.  Because loan capital is revolved several times over the course of an IRP loan to an intermediary, USDA estimates that every $100,000 in IRP loan funds leads to the creation of 76.5 jobs by the entities that receive funding from the IRP intermediaries.  Further, despite significant decreases in funding over the past decade, the IRP is credited with assisting an estimated 9,000 rural business across the country. What is the IRP? The Intermediary Relending Program, or IRP, provides low-interest loans to local intermediaries that in turn re-lend the funds to businesses and for community development projects in rural areas.  Today it is administered by the U.S. Department of Agriculture (USDA) by the National Rural Business Cooperative Services (RBCS).  Non-profits, cooperatives, federally recognized tribes, and public bodies are eligible to serve as intermediary lenders under the IRP.  Using the funds, the intermediaries create revolving loan funds (RLF). In general, an RLF is a pool of public- and private-sector funds that recycles money as loans are repaid.  Lenders, which can be state or local government agencies and nonprofit organizations structured to make loans, receive funds from a number of federal departments, including USDA.  The lenders in turn provide loans to local groups within their communities, which use the funds for economic development and business growth.  Frequently, the communities in which RLFs are used have no other affordable credit options. What is the Background of the IRP? The IRP has its roots in the War on Poverty.  The Economic Opportunity Act (PL 88-452) included a “Special Impact Programs to Combat Poverty in Rural Areas,” and an authorization for loans to “raise and maintain the income and living standards of low income rural families and migrants agricultural employees and their families.” While Congress initially authorized this program in 1967 and provided some $70 million in appropriations a few years later, the Rural Development Loan Fund (RDLF) never got off the ground.  Through the 1970’s, OEO and its successor, the Community Services Administration (CSA), refused to make the money available. Finally, a lawsuit forced the Administration’s hand, and the Carter Administration was ordered to obligate the money.  In 1980 and 1981, approximately $35 million in RDLF loans was made to a several Community Development Corporations (CDCs). Those first loans...
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