Source: United States House of Representatives – Congressman Zach Nunn of Iowa (3rd Congressional District)
DES MOINES — U.S. Representatives Zach Nunn (IA-03) and Wiley Nickel (NC-13) today introduced bipartisan legislation to improve access to housing in rural communities. The Promote Affordable Rural Housing Act will improve the U.S. Department of Agriculture (USDA) Section 524 loan program by extending the term for rural housing site loans and expanding the use of these loans.
“Our country is suffering from an affordable housing crisis, especially in rural areas,” said Rep. Nunn. “This is a growing challenge that must be addressed now to prevent it from getting any worse. Modernizing the USDA rural housing development loans will help incentivize new construction and bolster affordable housing options in rural Iowa.”
Across the country, there is a shortage of 7.3 million affordable and available rental homes for low-income renters. In rural Iowa, 10.6 percent of the population lives in poverty, and the average household income is more than $10,000 less than the national average. Nearly 40 percent of renters in Iowa spend nearly one third of their income on housing.
The USDA Section 524 loan program provides loans that can be used to purchase and develop housing sites for low-income and moderate-income families. Currently, the program only allows for a two-year loan term at below-market rate. The program offers loans to non-profits, municipalities, and tribal governments who have difficulty repaying the loan within a two-year period.
The bipartisan Promote Affordable Rural Housing Act would extend the loan repayment window from two years to five years, increasing flexibility for borrowers. The legislation will also allow these loans to be used to fund necessary development projects including surveys, architecture design, and engineering.
The Promote Affordable Rural Housing Act was introduced in the U.S. Senate by Senators Jerry Moran (KS), Amy Klobuchar (MN), and Jeanne Shaheen (NH). The bill passed the Senate on January 24, 2024, unanimously. Text of the bill can be found here.