Connecting capital and small town home ownership

Date:

By Brian Depew, executive director, Center for Rural Affairs

Home ownership increases family and community stability and is a key strategy to help low- and middle-income families build assets. In many regions, rural residents benefit from more affordable housing stock.

Yet, limited access to traditional mortgages can keep affordable houses out of reach. Fewer than one-quarter of homes sold for under $70,000 are financed with a traditional mortgage, often due to a lack of lender interest. This can translate to no viable path to home ownership for families in our communities.

For new home construction, the challenge is different. Housing developers face tight margins that limit new construction. For families who want to buy new homes, traditional lenders often won’t lend the full amount because the house may appraise at less than the cost to build.

Communities are responding in several ways.

• Local investment clubs are for-profit organizations whose members make a monthly investment. They stimulate new home construction by lowering the risk housing developers face by guaranteeing a quick sale.

• Nonprofit loan funds are filling gaps in some communities. With a mission to serve low-income families, and the ability to be more flexible with loan terms, they can make first or second mortgages to help families become homeowners.

• Local units of government often make lots available for new construction or might consider tax or utility abatement incentives. Partnerships could capitalize nonprofit loan funds and expand their impact. Loan guarantee programs incent traditional lenders into the market.

Access to affordable, desirable housing in small towns is as important as quality jobs, schools, health care, and other cornerstones of a vibrant community.

# # #

Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.

Opinion pieces are solely the opinion of the author and do not necessarily reflect the opinion of this newspaper. For more information about Letters to the Editor, please click here.

Share post:

spot_img

Related articles

The Double-edged Sword of Social Media

Editorial by Carrie Moritz             Administrating a Facebook group requires a quick learning curve, especially when that group goes...

Letter to the Editor: Headline Dispute

I was disappointed in your headline declaration of "Tom Godbey backs down on stricter pet ordinances". (I corrected...

City talks enforcement code complaint, septic tanks and drainage for new addition

The August 5, 2019 meeting of the Garretson City Council dealt with its first code enforcement complaint, fielded...

8th Annual Tractor Ride a Success

The 8th Annual Garretson Tractor Ride rolled into action on Friday, Aug. 9. Launching from Kibble Equipment in...

Log In

Latest articles

Celebrate our Veterans next Monday

Mark Williamson to be featured speaker             Veteran’s Day is next Monday, and there are two veteran’s Day Programs...

City talks Dog Park and appoints Matthew “Jake’ Jacobson to fill Tom Godbey’s seat

            Garretson may have a dog park within the next few years, if the vote taken at Monday...

Once a hospital, now a Garretson home

by Jill Meier, Brandon Valley Journal Addendum below             When Brandon Schweitzer purchased a massive house in 2016 that was once...

Trunk or Treat Fun

The Trunk or Treat in Split Rock Park and Downtown was plenty of fun for all last week,...

Mayor’s Desk for November, 2024

            I am going to deviate from my normal monthly column this month. I want to talk a...

Will GHS VB get that sweet 16?

UPDATE 11/7/24: Garretson Volleyball will be playing Baltic in Baltic at 7:00 p.m. on Thursday, November 7. The...
s2Member®