It's hard to believe, but the Farmers Home Administration (FmHA) has had a hard time unloading $4 million in loans to prospective home owners this year.
Marvin Chilcott, rural housing chief with FmHA, said the new guaranteed program for housing loans offers assistance to low and moderate income residents of towns with a population of 20,000 or less.
"FmHA has been making direct housing loans for years," he said. "In the last eight years or so, we've been limited to funding only people in the low and very low income range. Two years ago, Congress appropriated money to 20 pilot states to try guaranteed loans."
CHILCOTT said the guaranteed loan program involves private lenders issuing the 30-year, fixed-rate loans, which are guaranteed by FmHA. In the longstanding direct loan program, applicants receive housing loans directly from FmHA.
This fiscal year, which started Oct. 1, 1991, the program went nationwide, and Kansas received $4 million. FmHA has approved only about $500,000 in guaranteed loans to Kansans so far, and the money was pooled back into a national fund on Aug. 14. However, Chilcott said the organization still should be able to make a few more loans during September, and the new allocation for the program will be available with the start of the new fiscal year, Oct. 1.
FmHA held training sessions for lenders, real estate brokers and builders to familiarize them with the guaranteed loan program, said Chilcott, who hopes more people will take advantage of the available funds once the word gets out.
"THIS PROGRAM offers a number of advantages to prospective home buyers," he said. "Private enterprise can process loans faster than the agency can, and FmHA tries to issue a guarantee or commitment to guarantee within three days of the request from the lender. Lenders also can loan up to 100 percent of the appraisal of property."
The maximum available loan varies by county, as do the eligibility requirements, which are based on the county's median income. The lid on loans is $67,500 in most Kansas counties, but higher loans are available in urban counties. For example, rural Douglas County residents can receive up to $70,775. Residents of Leavenworth County can borrow up to $81,600.
Chilcott said eligibility is based on the family's gross adjusted income, which includes deductions for each child and day-care expenses, and the number of people in the family. In Douglas County, a family of four can have a maximum adjusted income of $36,500 to apply for a guaranteed housing loan.
SEVERAL Lawrence-area communities, including Eudora, Tonganoxie, Perry and Wellsville, have high numbers of residents participating in the direct loan program, Chilcott said, adding he would like to see the guaranteed loans become as popular.
For a list of the 28 lenders approved in the guaranteed loan program, write FmHA at P.O. Box 4653, Topeka 66604.