Population growth in rural communities has challenged homeownership for countless moderate and low-income families.
And with some of the cities nearing or already outside the parameters to qualify for U.S. Department of Agriculture rural housing programs, lawmakers are stepping in to preserve lending to those areas.
Sen. Tim Johnson, D-SD, and Sen. Pat Roberts, R-KS, are introducing a bill to raise the population cap from 25,000 to 35,000 through 2020.
As part of the bill, lawmakers agreed to grandfather all existing communities in the USDA rural housing programs, allowing them to maintain access to USDA’s Rural Housing Service.
"Buying or building a home in a rural area can present unique challenges, and the USDA’s rural housing programs have helped make responsible homeownership a reality for countless moderate and low-income families in South Dakota and nationwide," Johnson said.
He added, "Providing these loans, grants, and loan guarantee programs helps younger generations stay in the communities they’re from, and ensures rural housing markets have access to private credit."
A similar measure was passed with bipartisan support in the Senate last year as an amendment to the Farm Bill, but did not ultimately become law after the bill stalled in the House of Representatives.
"I am pleased to introduce this legislation to help rural communities like Dodge City, Garden City, Liberal, Hays and several others qualify for loans and grants that will help those who need it most," Roberts said, when referring to cities in his home state of Kansas.
He added, "As our rural communities continue to grow, so do their housing needs, and this legislation will help them remain eligible to receive assistance."
At the end of March, Congress approved a continuing resolution to extend current law for rural housing until Sept. 30, 2013. The current bill will extend the threshold by an additional seven years based on precedent relating to the grandfather clause.
The existing grandfather clause was first enacted in 1990 and extended by Congress in 2000, as well as recently extended in the continuing resolution through the end of the fiscal year.
This grandfather clause allowed a certain group of communities that were “rural” in 1990 to continue to be eligible for USDA Rural Development funding until the 2010 census, as long as it had a population of 25,000, explained Sarah Little, spokesperson for Roberts' office.