WASHINGTON, D.C. – U.S. Senator Peter Welch (D-Vt.) introduced the Rural Homeownership Continuity Act of 2024, legislation to fix the U.S. Department of Agriculture (USDA)’s Section 502 Single Family Housing Loan Guarantee mortgage assistance program to provide more financing options so rural families can become homeowners. The bill would amend the Housing Act of 1949 and update Section 502’s liability process to help more low- and moderate-income families in rural communities purchase homes using the loan program.
“Rural Vermont is reckoning with an affordable housing crisis and must use every tool at our disposal to make it easier to buy a home. That includes updating the loan programs that were designed to help more rural families secure loans to put homeownership within their reach. This legislation will cut through red tape to make it more affordable to buy a home in rural America.” said Senator Welch.
The Rural Homeownership Continuity Act of 2024 is supported by the Mortgage Bankers Association (MBA), Housing Assistance Council, and the National Rural Housing Coalition.
“The Mortgage Bankers Association supports the Rural Homeownership Continuity Act of 2024, as it provides the opportunity to assume a home seller’s existing mortgage and aligns the program with other government-backed lending. This important legislation would improve affordability, boost home buying and selling activity, and increase lending options in the future for rural communities,”said Bill Killmer, Senior Vice President for Legislative and Political Affairs, MBA.
“The National Rural Housing Coalition is pleased to support the Rural Homeownership Continuity Act and appreciates Senator Welch’s leadership on this issue. In many small towns and rural communities, housing assistance available under the Agriculture Department’s rural housing programs is the only affordable housing resource,” said Bob Rapoza, Executive Secretary, National Rural Housing Coalition. “The legislation fixes a technical glitch in current law and will facilitate the assumption of Section 502 guaranteed loans by low and moderate-income households.”
“USDA’s Section 502 Guaranteed Loan program provides low- and moderate-income rural families across the country with a tool to achieve homeownership. And it is an example of a great public-private partnership between local lenders and USDA,” said Jonathan Harwitz, Director of Public Policy at the Housing Assistance Council. “We applaud Sen. Welch for really looking into the nuts and bolts of this important program and identifying commonsense improvements. This bill will make the Section 502 Guarantee program more user-friendly for rural families looking to buy a home.”
The Section 502 Single Family Housing Loan Guarantee Program is a mortgage assistance program within USDA that assists with lending for low- and moderate-income households buying homes located in eligible rural areas. Currently, when an individual assumes a Single-Family Guarantee Loan, the departing borrower is not released from liability for the debt. As a result, there are zero loans that have been assumed under this program.
The Rural Homeownership Continuity Act would amend the Housing Act of 1949 to permit loan assumption under Section 502 to release departing borrowers from liability when their loans are assumed by new borrowers.
Read the full text of the bill.
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