One of the biggest problems that many rural housing markets have is that the properties on the market do not qualify for aid from federal programs. As a result, even if buyers are qualified to purchase properties, they are not able to take advantage of federal incentives and ultimately opt to buy elsewhere. This is a problem in areas like northern Michigan, for example. Now, however, the U.S. Department of Agriculture is attempting to change this negative, downward pattern by offering “low- and moderate-income residents living in rural areas…affordable housing finance options”. These options include no down payment, no monthly mortgage insurance premiums and several options on rates and closing costs. The program is called the “Guaranteed Rural Housing Loan Program” and is designed to benefit specifically ‘those in need of 100 percent financing or with lower credit scores.”
One of the main advantages of this program is that property eligibility is determined largely by location, which means that even if the property does not meet all other standards and the owners cannot afford to make the fixes, buyers may still be able to participate in the program.
Do you think that this is something that will benefit rural areas, or is it more artificial stimulus? Do the rural areas need artificial stimulus more than urban areas?
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