House Passes Bill to Extend USDA’s Rural Home Loan Guarantee Program

On April 27, the House passed the Rural Housing Preservation and Stabilization Act of 2010, H.R. 5017, by a vote of 352 to 62. The bill was introduced by Congressman Paul Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises on April 14 and was passed unanimously by the House Financial Services Committee on April 22.

The bill allows the Section 502 Single-Family Housing Guaranteed Loan Program to continue this year by increasing the annual commitment authority for the program, which USDA reported earlier this year would be exhausted by the end of April.

To make the program self-funding and avoid the need for Congress to appropriate more funds for the program this year, Kanjorski’s bill, as amended, would allow for an increase of the current 2 percent upfront fee to up to 4 percent. USDA has said they will need to raise the fee to approximately 3.5 percent to make the program self-sustaining.

Since USDA’s announcement that funds would soon be exhausted, NCSHA and several other housing groups have been working with Congress and the Administration to extend the program.

Companion legislation has not been introduced in the Senate.

U.S. House of Representatives
USDA Rural Development Housing Programs
Congressman Paul Kanjorski