Lewiston gets ‘rural area’ tag

April 30--A new definition of "rural area" in the 2014 farm bill means Lewiston residents with low or moderate incomes will soon be eligible for low-interest and subsidized housing loans through the U.S. Department of Agriculture.

According to the definition in the 1949 Housing Act, only people in cities with populations fewer than 25,000 were eligible. The change bumps that number up to 35,000. Lewiston's population was just more than 32,000 in 2012, according to U.S. Census Bureau estimates.

The city will become an eligible rural lending area for USDA'sRural Development housing programs on May 6, according to a news release from the department.

Roni Atkins, the director of USDA Rural Development Housing in Boise, said guaranteed and direct loans will be available. The direct loan program is subsidized, and offers loans with an interest rate as low as

1 percent. Both programs have no mortgage insurance requirement, like a Federal Housing Administration loan. FHA loans require up-front and monthly mortgage insurance payments, which can be a deal breaker for lower income homebuyers.

"So it's a great opportunity for low- and moderate-income families who don't have a down payment," Atkins said.

The USDA does charge a 2 percent loan guarantee fee, but that can be added into the loan amount, she said.

Lewiston City Manager Jim Bennett said residents have struggled for years with the inability to access the funding. The city has used its Community Development Block Grant program to help low-to-moderate-income families obtain housing, but he said its resources can now be stretched much further if homebuyers are able to utilize the USDA loan programs.

Congress didn't pass a corresponding increase in funding for the programs, even though the definition change opens them up to thousands more communities. But Atkins said that shouldn't be a problem because the guaranteed loan program is cost-neutral. And the subsidized loan program hasn't been under much pressure because interest rates have been so low that most people can get into the guaranteed loan program.

The subsidized program also recaptures some of the equity in a home if it is sold, because taxpayers have been assisting with payments through the subsidy, Atkins said.

Stacie Badertscher in the Lewiston Community Development Department said it remains to be seen how many people will use the new programs. But she said the guaranteed loan program's requirement that applicants make less than 115 percent of the national median income is more attractive than the block grant's requirement that applicants make less than 80 percent of local median income.

More information on USDA Rural Development housing programs is available at www.rurdev.usda.gov/id.

Mills may be contacted at jmills@lmtribune.com or (208) 848-2266.

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