President’s Rural Development Budget ‘Races to the Bottom’

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President's 2015 Budget Would Result in a 57 Percent Reduction in Rural Development Program Funding Since 2010, States NRHC

Since 1969, the national voice for rural housing and community development programs.

This administration shows very little interest in meeting the development needs of rural America.

A statement issued by the National Rural Housing Coalition says that White House and the U.S. Department of Agriculture (USDA) is leading a “race to the bottom” by proposing significant funding cuts to Rural Development programs, including those that help low-income rural families access affordable housing and grants that help small rural communities provide potable water and waste disposal systems to residents.

“The President's budget demonstrates just how little this Administration and USDA support Rural Development,” says Bob Rapoza, executive secretary of the National Rural Housing Coalition. “Over the past few years, this Administration has led a ‘race to the bottom,’ by using one excuse after another to cut funding for these critical programs. It is appalling.”

Between 2010 and 2014, the President requested over $1 billion in cuts to USDA’s loans and grants for business development, water and waste disposal, and rural housing. As a result, these programs have been reduced by 35 percent since 2010.

If enacted by Congress, the President's budget would amount to a 57 percent reduction in funding since 2010.

Programs like Section 502 Direct Homeownership Loans, the single most cost-effective federal housing program, have been particularly hard hit.

Each direct loan costs the government about $3,000 over the entire lifetime of the loan, far less than the annual cost of many similar federal housing programs. Since inception, the program has helped more than 2.1 million low-income rural families become homeowners.

Above all, Section 502 Direct Loans are an important source of jobs in rural America. According to USDA estimates, the program created 94,000 jobs and generated $4.7 billion in wages over the past 5 years.

Rapoza argues that if the President’s 2015 budget is enacted, 4,600 fewer rural families will be able to access affordable mortgages, creating 8,100 fewer jobs and generating $407 million less in local wages.

Likewise, the President’s budget dramatically cuts grants to small rural communities without adequate water or waste disposal facilities. The President’s budget proposes a one-year reduction of nearly $160 million or 34 percent.

“The numbers speak for themselves. This Administration shows very little interest in meeting the development needs of rural America,” said Rapoza.


About Section 502 Direct Homeownership Loans
Section 502 Direct Homeownership Loans provide safe and sustainable fixed-rate mortgages – with up to 38-year terms and subsidized interest rates as low as just one percent – to help low-income rural families access clean, decent, and affordable housing. Demand for Section 502 loans continues to outpace supply; over 12,500 loan applications − amounting to more than $1.5 billion − are currently on Section 502 waiting lists.

About the National Rural Housing Coalition
NRHC is a national membership organization of non-profit housing organizations, housing developers, state and local officials, and housing advocates. Since 1969, NRHC has promoted and defended the principle that rural people have the right – regardless of income − to a decent, affordable place to live, clean drinking water, and basic community services.

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Sarah Mickelson
Rapoza Associates
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