loans

i'm sarah young with nar governmentaffairs, and i'm here with kathy glover who headsup the section 502 direct loan program at usda and washington dc. so, i know that there's a section 502guaranteed home loan program that many people are familiar with. but, there's also a section 502 direct homeloan program that people might not be as familar with, but it's a good option for many rural home buyers. can you tell me moreabout the difference between the two programs and

who might qualify for the direct loanprogram? okay, so the 502 guaranteed loan program isa program that's administered by agency approved lender. so, all of the loan processing is done by the lenders. the direct loan program which is theprogram we're focusing on today is administered by the rural developmentfield offices. the big difference is the incomelimitations on the guaranteed program, the incomelimits are a little bit higher where's they are much lower on the direct side.

for example, the average 502 directloan borrower has an income of around thirty thousand dollars and they areable to purchase a new or existing home. but, with such a low income. so, if i'm a home buyer and i'm interested in the direct program, i go to my lender to find out about it or is there another process that i needto be following? so, if they're interested in a 502 direct loan porgram, they should not go to their lender that would be for theguaranteed program.

on the direct side they should go to on of our local rural development field offices where they would actually collect andprocess the application. make the eligibility determination andum prep everything for loan closing. okay, so, if i'm a real estate agent.what other things can i do to help a potential homebuyer use one of these rural home loan programs? are there other tools that i could use, or resourcesthat i could direct my home buyer to? well, there's quite a few things that wehave on our website that could help a realtor.

prep a buyer for a home loan with us. ourproperty and eligibility website actually contains all up the incomelimits for the program it also contains the rural areas that would be very important to makesure the loan is in a rural area they can find out informationthere and they can actually put in the customers income and determine which programwould best suit them. so, i know that $900 million wasappropriated in 2015 for the direct loan program. is thatenough money to fund

all the loans that people might beinterested in the program this year? okay, that's a very fair question. yes, that is correct, we only have 900 million available for the 502 directloan program this year. we do not foresee any problems meetingthe demand this particular physical year. last year we were not able to um, use all of the funds believe it or not when we had just nine hundred milliondollars. should we get into a situation where we think we may be running out of funds. we will work closely with allof our partners including the real

estate agents to make sure they are aware funding situations before an advocate can sign a contract. so, just to wrap up do you have anysuccess stories of a family that recently used the program? to give our members an idea of who, what kind of client they might be working with to use the direct program? okay, yeah, i have i have a great storyof a young family uh, actually it was a single mother whohappened to be hearing-impaired. she had a daughter, and she did not growup in a single-family home,

and all she wanted was a home for heryoung daughter. so, we were able to assist her andconstructed a brand new home for herself and her young daughter whichis great story. that's great. we're really excited towork with, we are so glad you came in today. and we're dedicated to providing moreresources to members on realtor.org. i know we've we've committed todeveloping some are frequently asked questions that we can provide to ourmembers, as well as information that i knowyou're planning to provide on the usda

website. thank you for having me we're glad to behere and i'm so looking forward to working closely with your organization.