Unless Congress acts, thousands of American families will lose access to safe and affordable mortgages backed by the Rural Housing Service Section (RHS) 502 Program. Strong communities, large and small have always been the key to a strong America. Whether you live in an urban area, suburban, exurban community or a small farming town as a REALTOR® we need you to remind Congress to keep the door to homeownership open in all housing markets.


Unless Congress acts quickly, homeowners and prospective owners in more than 900 communities across the country will not have access to the programs of the Rural Housing Service (RHS).

One program of concern is the Section 502 guaranteed loan program that provides opportunities for homeownership for rural families. These loans can be used for a variety of important homeownership needs including purchase and or site preparation, as just two examples. RHS insures the loans while 502 loans are made at no cost to the federal government as the program's costs are fully supported by the premiums paid by borrowers.

The Senate and House have legislation before them that will extend the program for 10 years but no final action has occurred on either bill.

Congress needs to act when they return to Washington after the election. 

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More than 900 communities nationwide will NOT lose access to rural housing programs this fall, as expected. On September 25, the Office of Rural Development of the Department of Agriculture published an Administrative Notice delaying implementation of 2010 Census data for use in their programs through March 27, 2013.

The programs of the Rural Housing Service (RHS) provide access to safe, affordable mortgage financing for lower-income rural families. Without Congressional intervention, RHS was on the brink of reverting to a definition of “rural” that has not been updated since 1974. This outdated definition would have rendered more than 900 communities in 48 states ineligible for access to these valuable programs.

The National Association of REALTORS® (NAR) has been working with Congress on grandfathering these communities. In the Senate, the Farm Bill includes an amendment by Senators Nelson (D-NE) and Johanns (R-NE), passed by voice vote without objection, that would have grandfathered existing communities for 10 years and moved the threshold for existing eligible communities to 35,000. In the House Rep. Fortenberry (R-NE) has a similar bill, and also lead the charge, with Rep. Hinojosa (D-TX), in circulating a letter that 100 Members of the House signed to House Leadership, urging them to include this provision in any legislation. NAR will continue to work with Congress upon their return to advocate a 10-year grandfathering provision. While this notice from Rural Development extends eligibility through March 27, 2013, we would like long-term certainty for communities and rural families looking to purchase a home.

Rural Development Notice
NAR coalition letter to Senate
NAR coalition to House
Congressional Letter on Rural Housing