A new bipartisan bill would expand the eligibility of the Farm Credit System so that it can help millions more people in more small towns buy homes.
Senate Bill 4182 would amend the Farm Credit Act of 1971, which provides credit for rural homes. Currently, that program defines rural areas as any city or village of fewer than 2,500 people. The new bill would expand that to cities of fewer than 10,000 people.
Farm credit institutions can loan only to homebuyers in those rural areas. This change would allow an additional 29.9 million homebuyers to apply for flexible home loan assistance. The bill also expands loans for accessory dwelling units.
The bipartisan bill was proffered by four members of the Senate Agriculture Committee: Republican Sens. Cindy Hyde-Smith of Mississippi and Jim Justice of West Virginia and Democratic Sens. Peter Welch of Vermont and Adam Schiff of California.
"It is too hard for too many people to land a home mortgage by coming up with traditional down payments, especially in rural communities," Hyde-Smith said.
Farm credit aimed at stemming rural decline
Michigan Reps. Kristen McDonald Rivet and Bill Huizenga, a Democrat and a Republican, respectively, put forth a companion bill in the House in December.
Hyde-Smith said the bill would "broaden the use of its flexible lending assistance to help qualify tens of thousands of rural families and individuals," including in Mississippi. An additional 1.8 million people in that state would be eligible for rural housing assistance if the law changes.
The change would also align the Farm Credit System with the eligibility requirements of the U.S. Department of Agriculture's rural housing lending program.
The American Farm Bureau Federation, the Farm Credit Council, the National Council of Farmer Cooperatives, the National Cooperative Business Association, and the Housing Assistance Council are among the bill's backers.
Christy Seyfert, president and CEO of the Farm Credit Council, says the measure could ensure rural communities continue to attract people and allow their continued economic viability as population growth slows.
Rural areas see continuing population declines, but they also see higher home prices and limited inventory.
"Updating this one-size-fits-all statute will spur economic growth and job creation in rural areas, while improving housing options in agricultural communities," Huizenga said last year.
