CACHE COUNTY – Young families here are being urged to contact their congressional representatives in an effort to save the local Neighborhood Nonprofit Housing Corporation.
In an open letter to U.S. Rep. Blake Moore (R-Dist. 1) and Utah Senators Mike Lee and John Curtis, county resident Katy Oldham has pleaded with those individuals to use their influence in Washington to reverse a recent rule change to the 502 Direct Loan Program operated by the Rural Development Office of the U.S. Department of Agriculture.
Until mid-February, that program allowed low-income families in Cache County to build homes valued at up to $595,000 through a “mutual self-help housing” effort.
The idea was that groups of pre-approved families would collaborate on building homes in a particular area, according to Josh Runhaar, the executive director of the local Neighborhood Nonprofit Housing Corporation. Most recently, those construction areas were in Hyrum and Smithfield.
In essence, each of those families would build their own home, earning so-called “sweat equity” for 35 weekly hours spent on do-it-yourself construction efforts, under professional supervision.
The program was supported by loans from the federal government that actually subsidized those new homeowners’ interest rates on a sliding scale that goes all the way down to 1 percent, making those homes affordable for the first time.
But not anymore.
On Feb. 10, the U.S. Department of Agriculture unilaterally revised the rules governing its Section 502 direct lean program. Previously set at 80 percent of Housing and Urban Development limits, the new rules lowered the cap amount to 60 percent of those limits, meaning that borrowers now have access to less financing than before.
In terms of dollars and cents, that change dropped the maximum loan limit and home value of the program from $595,000 to $324,700.
You can’t even build a town home in Utah for that amount, Runhaar explains.
“The new loan and appraisal caps do not reflect the real cost of building in Cache County,” Oldham argues in her letter of Feb. 24.
“Even the most modest homes now exceed the updated limits,” she adds, “making it impossible for families to both qualify for financing and build a home that can appraise within the allowed amount.”
Oldham explains that her family is already enrolled in the mutual self-help program and construction of their home is now underway.
But Runhaar said that more than 200 Cache Valley families that were waiting in line to join the program have now been left high and dry by the federal rule change.
Ironically, officials at all levels of government agree that the solution to the housing affordability crisis is building more single-family houses.
“These are working families with children,” Oldham emphasizes. “Families who have done everything right.
“They qualified for the program, committed to performing hundred of hours of sweat equity and planned their futures around the promise that affordable rural housing was attainable. But, overnight, that door was closed.”
Oldham respectfully urged Moore, Lee and Curtis to advocate for the USDA to rescind or revises the Feb. 10 rule change to restore loan and appraisal limits that align with real construction costs in rural Utah.
In her letter, Oldham also recommended that families being denied housing opportunities by the rule change contact the USDA Rural Development Regional Office at 125 South State Street in Salt Lake City.
Concerned local residents could also reach out to protest those changes by calling the U.S. Capitol switchboard in Washington at 202-224-3121 and leaving a message for their congressional representatives and senators.