News Column

USDA Extends Deadline For Rural Development Loan Eligibility

August 22, 2014

By Justin Bates, Times Record, Fort Smith, Ark.



Aug. 22--The U.S. Department of Agriculture announced it will delay work on implementing any changes to eligibility criteria for rural development loans until next year.

Last month, during a meeting with local real estate agents, brokers and homeowners, USDA representatives said that effective Oct. 1, Van Buren would become ineligible for rural development loans to allow lower- to mid-income families purchase land and build a home without a down payment, meaning families looking to build a home under the loan program would have to look for property outside Van Buren city limits.

Karen Phillips, housing and development director at the Crawford-Sebastian Community Development Council, told the Times Record earlier this month that with Van Buren's current population at 23,000, the city was already at risk of being cut from the program, but she said a stipulation of the federal farm bill, signed into law in February, raised the population number for loan eligibility up to 35,000, something she thought would keep the city within the loan-eligibility requirements.

In the meeting, USDA representatives said the city would become ineligible because of a stipulation that explains an area must be "rural in character" to be eligible, a factor the state's USDA office determines.

The decision drew the ire of U.S. Sen. Mark Pryor, D-Ark., who wrote a letter to U.S. Secretary of Agriculture Thomas J. Vilsack expressing his concern and request to delay implementation of the classification.

Pryor is chairman of the Senate Agriculture Appropriations Subcommittee, which oversees funding for USDA Rural Housing programs. He expressed concerns about the decision, namely with its timing and the evaluation process to determine "rural in character" not being made public, noting that the decision would not only affect those in Arkansas but other rural communities across the country.

On Wednesday, Vilsack ruled that the USDA will hold off on any changes to eligibility based on the "rural in character" criteria until Sept. 30, 2015.

During the suspension, the USDA department of Rural Housing Service will review and modify its determination procedures, Vilsack said.

"RHS will also evaluate and standardize its communications processes to ensure there is appropriate opportunity for public comment and consideration before final designations are issued," Vilsack stated in a news release.

C-SCDC Executive Director Mark Whitmore said he is pleased with Vilsack's decision and said although the victory is "short-lived," it gives the agency hope.

Whitmore said he hopes the USDA will properly define the "rural in character" criteria on a federal level, rather than leaving the definition up to individual state offices.

Pryor also applauded USDA's decision to provide the one-year delay.

"USDA was out of bounds in denying these communities access to rural housing programs. Suspending its actions is the right thing to do. It allows Arkansas households to continue to benefit from this successful housing program and provides time for stakeholders to be part of the decision-making process," Pryor stated in a news release. "I appreciate Secretary Vilsack's willingness to ensure the 'rural in character' designations are done right."

Whitmore thanked Pryor and his staff, along with U.S. Sen. John Boozman, R-Ark., and U.S. Rep. Steve Womack, R-Rogers, and their staffs for their work in the process.

Whitmore said the decision will allow the agency to develop a strategy and have an opportunity to make its case in favor of Van Buren's status as a "rural in character" community.

Though there is no definitive schedule for the public comment period, Whitmore hoped it would be published prior to the September 2015 deadline.

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(c)2014 Times Record (Fort Smith, Ark.)

Visit Times Record (Fort Smith, Ark.) at www.swtimes.com

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Source: Times Record (Fort Smith, AR)


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