USDA makes more home loans available

MAT-SU -- Potential Mat-Su Borough homeowners in higher income brackets may be able to achieve the dream of ownership sooner than expected with the help of a recent lowering of the income limits for USDA Rural Development home and home improvement loans.

The reduction of these income limits means, in short, that the loans will be available for applicants in higher income brackets than had been allowed previously. Limits for Section 502 leveraged loan funds, which can be combined with native corporation or other tribal funds, have increased by more than 10 percent. Before the end of June, a family of four making more than $55,300 was ineligible for these funds. Now, the same family can obtain a loan provided they make less than $63,150 per year. These numbers vary region to region, and may not apply outside of the Mat-Su Borough.

"We currently have funds available in our Section 502 leveraged program, with subsidized interest rates as low as 1 percent, for Alaskans who meet income eligibility requirements," said Debbie Andrys, acting director of Rural Development Housing, in a press release.

Andrys said her office would continue to offer the very popular "guaranteed" program, but with increased income limits for qualifying applicants. Under previous limits, an individual making no more than $56,550 per year in the Mat-Su could apply for one of these loans. Under the new, revised limits, individuals with an income of $63,150 per year or less can qualify. The limit for a family of four is $90,200 per year. In this program, lending institutions partnered with Rural Development provide conventional home loans, and the office backs the loan with a guarantee. This guarantee states that, if the borrower defaults on the loan, the payments will still be made in full by the office.

"It leaves the bank with very little risk," said Cynthia Jackson at the Palmer office. Among the benefits offered by a USDA home loan, she said, are no down payments and additional financing of closing costs. If a home is appraised above the buyer's price, the loan can be expanded to encompass up to 100 percent of the appraised price, as well as expanding to include such amenities as appliances for an unfurnished house.

Part of the driving force behind these USDA loans is to increase housing opportunities for minorities. An initiative by President George W. Bush is currently attempting to increase minority home ownership by 10 percent before the year 2010. In Alaska, Andrys said, the USDA hopes to significantly exceed that goal.

In addition to the loans, USDA Rural Development offers home repair and rehabilitation funding under the Section 504 program. Mat-Su residents over the age of 62 who meet income eligibility requirements can qualify for up to $7,500 in grant funds to make roof repairs, make their homes handicap-accessible, repair water and septic systems, or perform other health and safety improvements. Residents under 62 may also be eligible for loans of up to $20,000 under this repair program.

The primary attraction of the USDA loan, however, is its potential for acquisition by families that might not be able to obtain a traditional loan from a lending service.

"The goal here is that low-income families, many of whom have never owned a home before, can finally have access to housing loans," Jackson said. "It's an excellent program."

For more information, call the USDA-Rural Development State Office in Palmer at 761-7742.

Contact Daniel Spoth at daniel.spoth@frontiersman.com.