Vol. 1, No. 1                                                                                                                            September 2003
Current Issues in Rural Housing and Homelessness
 
By Pamela Friedman
 
Background
 
Access to affordable housing is essential to the well-being of working families. Affordable housing lends the stability needed to obtain and maintain employment. Yet affordable housing is at a premium, especially in rural communities. Rural families with low earnings may be confined to substandard housing located far away from job opportunities. They face longer commuting times that may prevent them from participating successfully in the regional labor market. In addition, housing assistance resources in rural areas may be limited, particularly in outlying communities.
 
The rural housing stock differs significantly from the housing stock in urban and suburban areas. These differences impact the needs of rural residents and influence the types of programs required to address those needs. Nonmetropolitan areas have larger percentages of mobile and single-family homes and a greater number of seasonal units. Homeownership is more prevalent than renting in rural areas, and there is less crowding in terms of persons per room (Wills 2002). However, rural owner-occupied housing has a lower median value and is more likely to be substandard. According to a soon-to-be-released study by the Rural Community Assistance Program, more than 700,000 rural households lack complete indoor plumbing.
 
In addition, as in other areas, the cost of rural housing has consistently outpaced income during the past few years, causing many low-income rural workers to spend a high percentage of their income on housing. Whitener (1997) found that nearly 71 percent of poor families residing outside of major metropolitan areas spent more than 30 percent of family income on housing.
 
The challenges facing the homeless in rural areas differ from the challenges facing the homeless in urban and suburban communities.  The rural homeless are more likely to be working and newly homeless (for three or fewer months).  Most rural homeless are male and single, but homeless families account for 15 percent of the total.  Among homeless clients in families, 84 percent are women. Because there are fewer shelters in rural areas, homeless families are more likely to live in their cars or with relatives (Burt 1999). Although assistance for the rural homeless is available, the programs provide few services. For example, because of the limited number of health care facilities serving the rural homeless, individuals seeking medical assistance are likely to be more seriously ill than their urban counterparts (Post 2002).
 
This Issue Note offers suggestions on how to design programs and policies that address rural housing needs. For more information, visit the Rural Assistance Center at www.raconline.org and these Welfare Information Network websites: http://www.financeprojectinfo.org/rural/ruralhousing.asp, http://www.financeprojectinfo.org/win/housing.asp and http://www.financeprojectinfo.org/win/homeless.asp.
 
Policy and Program Issues
 
What are the housing needs of low-income rural residents? Most low-income housing units in rural areas are single-family units, but many of these units are substandard because they do not meet building codes, are structurally unsound, or lack appropriate plumbing, electricity, or sewage disposal systems.  Moreover, even though many low-income rural homeowners work full time, they may still spend a high percentage of their monthly income on housing and be unable afford to bring their residences up to code. The 2001 American Housing Survey found that 25 percent of all rural households were “cost-burdened,” meaning they spent more than 30 percent of their income on housing (U.S. Bureau of the Census, 2001).
 
Many rural residents also lack access to affordable mortgages. Lenders hesitate to locate in rural communities because the limited number of potential borrowers decreases profitability. Overhead expenses are higher because fewer loans are serviced, and lenders must market to a wider geographic area. As a result, mortgage rates tend to be higher and the amortization period longer than in urban areas. Because the existing rural housing stock is older, its collateral value is lower, which dissuades lenders from offering competitive mortgage rates. The lack of basic infrastructure such as water and sewage systems and the need to bring existing systems up to code increases mortgage costs.  In addition, secondary markets are poorly developed and rarely used. Although rural homeowners are eligible to participate in these markets, few do (Jaure et al. 2003).
 
Many low-income rural families live in manufactured housing, which in 1991 accounted for 16 percent of all rural housing (U.S. Bureau of the Census, 2001). Although the costs of these homes are significantly less than the costs of conventional homes, the homeowners may not own the land on which these homes are built. They often must pay a land rent fee in addition to mortgage payments. Furthermore, these homes do not have the same endurance as permanent housing, and their use tends to deter permanent housing development (Jaure et al. 2003). The purchase of a manufactured unit is also financed differently from the purchase of a conventional home.
 
Encouraging homeownership on tribal lands is also a challenge. In remarks at the Rural Housing Summit in Washington, D.C., on June 16, 2003, Gary Gordon, executive director of the National American Indian Housing Council, noted that nearly one third of all tribal housing is overcrowded. He also said mortgage interest rates are significantly higher on tribal lands, at between 18 percent and 30 percent above usual rates, title clearance takes much longer; and mobile homes are common. Moreover, because of tribal sovereignty issues, lenders hesitate to provide access to loans. Other barriers to homeownership in Indian country include the dearth of economic development and the high number of potential buyers who lack financial literacy.
 
How can states and localities address housing needs in rural areas? One strategy is to create housing enterprise zones that encourage the development of affordable housing in targeted areas by offering tax breaks to new owners.  In addition, many states and localities are using housing trust funds that are  usually established through legislation or ordinance. These funds have many revenue sources; among the most common are set-asides from local real estate transfer taxes, penalties for late payment of real estate taxes, and fees on other real estate-related transactions. Trust fund governing bodies decide how the funds are used. Some are used to subsidize the purchase of affordable housing by providing zero-interest loans or gap financing. Some are used to provide rental assistance, while others are used to serve homeless populations. Some state housing trust funds, such as those in Arizona, Kentucky, and Texas, have designated revenues specifically for use in rural areas (Brooks 2002).
 
What funding sources are available to support rural housing development? The U.S. Departments of Agriculture (USDA) and Housing and Urban Development (HUD) are the primary federal programs providing direct assistance to low-income rural renters and homeowners. Each agency administers a large number of programs. Other federal programs offer energy and weatherization assistance to low-income homeowners or tax credits to developers.
 
USDA Programs
 
The Section 502 Homeownership Direct Loan Program of the Rural Health Service (RHS) provides loans to help low-income households purchase and prepare sites or purchase, build, repair, renovate, or relocate homes. At least 40 percent of appropriated funds must be used to assist families with incomes below 50 percent of area median income. To receive assistance, families must be without adequate housing but able to afford mortgage payments. They must be unable to obtain credit elsewhere even with good credit histories. Loans are for up to 33 years and no down payment is required. 
 
Section 502 Mutual Self-Help Housing Loans are designed to help very-low-income households construct their own homes. Targeted families include those who cannot buy affordable housing through conventional means. Participating families perform approximately 65 percent of the construction under qualified supervision. Qualifying applicants must have incomes below 50 percent of the area median. Loans are for up to 33 years.
 
Section 504, the Very-Low-Income Housing Repair Program, provides loans and grants to low-income homeowners to repair, improve, or modernize their homes. Improvements must make the homes more safe and sanitary or remove health or safety hazards. Eligible homeowners must have incomes below 50 percent of the area median and must be unable to obtain affordable credit elsewhere. Grants are available to homeowners above age 62 who cannot repay loans.
 
The Rural Rental Assistance Program (Section 521) provides an additional subsidy for households with incomes too low to pay RHS-subsidized rents. Subsidies cover the difference between the tenant’s contribution of 30 percent of adjusted income, including the cost of utilities and services.
 
Rural Housing Preservation Grants (Section 533) are designed to assist sponsoring organizations in the repair or rehabilitation of low-income or very-low-income housing. Assistance is available for landlords or members of a cooperative.  Funds are combined with other programs and used as loans, grants, or subsidies for recipient households based on a plan in the sponsor’s application. For more information, see http://www.rurdev.usda.gov/ms/rh.html.
 
HUD Programs
 
The HUD Self-Help Homeownership Opportunity Program finances land acquisition and site development associated with self-help housing for low-income families. Loans are made to the nonprofit sponsors of development projects and are interest-free. Portions of the loans are forgiven if promised units of housing are completed within a given period. These forgiven “grant conversion” funds may be used to subsidize future development projects. The program requires families to contribute sweat equity toward the construction of their home, which may replace funds needed for the down payment. For more information, see 
http://www.hud.gov/offices/cpd/affordablehousing/programs/shop/index.cfm.
 
The HOME Investment Partnership Program aims to encourage the production and rehabilitation of affordable housing. HOME funds may be used for rental assistance, assistance to homebuyers, new construction, rehabilitation, or acquisition of rental housing. Funds are allocated on the basis of jurisdictional need for affordable housing, with 60 percent earmarked for cities and urban counties. The other 40 percent is directed to states, which distribute the funds by formula to less populated areas. For more information, see
http://www.hud.gov/offices/cpd/affordablehousing/programs/home/index.cfm.
 
The Housing Choice Voucher Program, formally known as Section 8, is the largest federal housing program serving low-income families. Public housing authorities (PHAs) administer vouchers that families can use to rent housing they locate in the private market. Participating families pay 30 percent of their monthly income for rent, and the voucher covers the difference between the family’s portion and the maximum rental subsidy. Families with incomes low enough to qualify receive vouchers from their local PHA and then seek private housing on the open market from landlords willing to accept vouchers. The vouchers are targeted so 75 percent of all new vouchers go to extremely low-income households. The remaining 25 percent can be given to households with incomes up to 80 percent of area median income. Congress is considering replacing the current voucher program with a block grant to states. If enacted, eligibility criteria for the program may change. For example, after the first lease term expires, states would not be required to limit payments by renters to 30 percent of their gross income. (Sard and Fischer 2003). For more information, see http://www.hud.gov/offices/pih/programs/hcv/index.cfm.
 
The Small Cities Development Block Grant (CDBG) or Small Cities CDBG program is the rural component of HUD’s Community Development Block Grant program, which is administered by state agencies. The state CDBG program provides assistance for the development of affordable housing and economic development efforts targeted to low- and –moderate-income people. Funds are awarded on a competitive basis to local governments with 50,000 or fewer people. Community organizations cannot apply directly for funds, but local grantees may fund activities by nonprofit organizations. For information on these and other programs, see
http://www.hud.gov/offices/cpd/communitydevelopment/programs/smallcities/index.cfm.
 
Other Programs
 
The Low-Income Housing Tax Credit (LIHTC), like HOME, aims to encourage the production and rehabilitation of affordable housing. It provides an incentive for private entities to develop affordable housing. The credit reduces the federal taxes owed by an individual or corporation for an investment made in low-income rental housing. The amount of the tax deduction is tied to the proportion of low-income residents in the housing produced. The credit is paid out over 15 years to investors in the housing project. LIHTC provides funding for the construction of new buildings or the rehabilitation or conversion of existing structures. To qualify, a property must set aside a certain share of its units for low-income households. Each state receives a tax credit allocation and awards the tax credits to investors in return for investments in the projects. Nelson (2003) suggests leveraging the LIHTC to make the units affordable for up to 40 years instead of the federally mandated 15 years. For more information, see http://rental-housing.com/rental/litc.htm.
 
Intermediary organizations such as Local Initiatives Support Corporation (LISC) work to build the capacity of rural community development corporations by providing funding, training, and technical assistance to address pressing economic development issues in rural communities. LISC coordinates the Rural Home Loan Partnership. This partnership, which involves the Rural Housing Service, Fannie Mae, Freddie Mac, the Neighborhood Reinvestment Corporation, the federal home loan bank system, and nonprofit housing sponsors, finances and builds homes sold to low-income buyers in rural communities. Contact Sandy Rosenblith at 202-739-9275 or srosenblith@liscnet.org.
 
In May 2003, Congressman Artur Davis (D-Ala.) introduced H.R. 1913, the Rural Housing Tax Credit Act of 2003. The bill calls for a $5,000 tax credit for low- and moderate-income rural homebuyers. Homebuyers with an income of $30,000 or less ($60,000 for those filing joint returns) would qualify. The credit would be phased out over the next $10,000 of income (or the next $20,000 of income for those filing joint returns). Purchasers would be required to buy homes in places defined as rural by the U.S. Department of Agriculture’s Rural Housing Service. In addition to supporting increased homeownership by rural minority residents, the credit is being touted as a way to draw industry to rural communities and improve their tax base. Contact Kate Tromble at 202-225-2665.
 
Some states have programs that use designated funds from an income source such as document stamps (official stamps affixed to real estate documents of sale) to support housing development. In Florida, State Housing Initiative Partnerships (SHIP) funds are distributed to each county. The program channels 70 percent of the documentary stamp tax revenues created by the Sadowski Act directly to all 67 state counties and 48 entitlement cities in Florida on a noncompetitive basis. SHIP retains 28.5 percent of the funds for affordable housing. The program encourages public-private partnerships for building, rehabilitating, and preserving affordable housing and provides the financial means to develop and implement housing programs that are locally designed. Each local government maintains a local housing assistance plan defining its housing initiatives, financial awards, selection criteria, award conditions, and recapture agreements. Contact Tom Burt at 850-488-4197; or visit information@floridahousing.org.
 
State mortgage revenue bonds can be used to help low-income workers obtain first mortgages. Income from the sale of these bonds can be used to finance low-interest mortgage loans available to first-time homebuyers with earnings less than the state or area median income, whichever is lower. However, mortgage revenue bonds are deemed private activity bonds, have a cap, and are based on population (Jaure et al. 2003).
 
States can use federal Temporary Assistance for Needy Families (TANF) funds to finance homelessness prevention benefits for families with children without negatively affecting those families’ TANF benefits. Doing so will not affect the 60-month federal lifetime limit on TANF assistance if these families do not receive monthly cash benefits. The flexibility afforded in the federal TANF regulations also enables states and localities to provide these services to all low-income families, not just TANF recipients. So long as the homelessness prevention benefits are defined as short-term benefits, they may be provided more than once a year. Using federal funds to meet emergency needs may free up state maintenance-of-effort funds for rental subsidies (see Sard 2001). Current state fiscal conditions may impede these efforts, however.
 
The National Governors Association identified several ways states can work to increase access to housing for low-income families. These include providing tax incentives for developers to build and preserve affordable housing, creating a state managed trust fund with dedicated revenue to support housing production, providing grants to subsidize low-income families’ rental costs, providing credit counseling, and helping families save to purchase a home by establishing individual development account programs (see Smith 2002).
 
State and local governments can also design programs that support housing development and rehabilitation by providing seed capital and strengthening local linkages between housing and other support services programs.
 
What role can faith- and community-based organizations play in rural housing development? Faith-based organizations (FBOs) and community-based organizations (CBOs) have a long history of involvement in programs to support rural housing and assist the homeless. Their activities are especially important in communities where access to services is limited.
 
In addition to providing emergency food and housing assistance, these organizations can conduct the outreach required to ascertain the numbers of homeless in their communities. By providing financial literacy education and loan application assistance to local residents, they can assist both lenders and applicants. As nonprofit housing corporations, they can apply for government funds to build, maintain, weatherize, and manage low-income housing units. In addition, they can provide support services, such as transportation, child care, and job search assistance, to the community at large and work to promote economic opportunities that create jobs for local residents. Transitional housing is one of the most common social services that FBOs and CBOs provide.
 
In many cases FBOs and CBOs are the providers of choice to low-income families in their communities. They typically work with other support programs, referring clients to job training, health care services, and other supports that can help them improve their credit and build the assets needed to secure safe and affordable housing.  Some FBOs and CBOs opt to provide these services themselves onsite.  Because of their familiarity with local community needs, FBOs and CBOs also work to build bridges and facilitate partnerships across sectors, for example, with local agencies and businesses.
 
The Indiana Family and Social Services Administration’s Division of Family and Children formed FaithWorks Indiana in 1999. The initiative promotes faith- and community-based services to families statewide. Among FaithWorks’ activities is an outreach and education effort targeted to FBOs and CBOs about the state’s one-stop program known as WorkOne. WorkOne centers provide employment and training services, referrals, recruitment, and information on support services to job seekers and employers. Services offered in rural communities include service fairs, held in conjunction with other community organizations and government agencies, where provider agencies, FBOs, and CBOs disseminate information about their services, identify gaps and needs, and brainstorm about how they can meet those needs. Contact Kathy Koehler at 1-800-599-6043.
 
Research Findings
 
The economic boom of the 1990s saw a significant rise in the cost of housing in both urban and rural areas. Surprisingly, housing prices in nonmetropolitan communities rose at a greater pace than those in urban areas, 59 percent compared 39 percent (Wills 2002). Nonetheless, the average cost of buying a home in rural communities remains significantly lower than in urban areas.  For rural homeowners, their home is a major component of wealth and changes in price determine returns on this investment; it follows that lower housing values impede owners’ ability to increase their personal assets. Housing and neighborhood quality may also affect family health, proximity to jobs, and residential and family stabilization, which in turn influence the ability to find and keep jobs. Housing prices also affect the cost of living at the local level, influencing the community’s ability to attract and retain businesses and workers.
 
According to the most recent American Housing Survey, nearly 7 percent of nonmetropolitan units are either moderately or severely substandard (U.S. Bureau of the Census 2001). Minorities living in rural areas are among the poorest and worst housed. They are three times more likely to live in substandard housing than are white rural households. Communities without adequate housing may find it difficult to retain or attract new residents or businesses. Two primary barriers to the development of affordable housing are the lack of physical infrastructure necessary to support development and the negative attitudes regarding affordable housing in some communities.
 
Lower population density, a characteristic that may attract more affluent residents to rural areas, may create barriers to homeownership for low-income residents. Potential lenders are more likely to limit the number of loans available to increase their profitability margins, and interest rates on mortgage loans in rural communities tend to be higher than in urban communities. These factors are a disincentive to low-income housing development.
 
Approximately 9 percent of the homeless are rural (Burt 1999). This segment of the population is probably underrepresented because of difficulties in identifying homeless individuals and families in rural communities. In addition, much of the research excludes those who could not or did not access targeted homeless assistance services (Post 2002). There is a stigma associated with homelessness. To avoid being identified as such, the homeless may temporarily reside with family and friends. Post (2002) found that in rural communities, the homeless are two to four times more likely to live with family and friends, partially because of the limited availability of temporary shelters. Rural homelessness is prevalent in areas experiencing economic distress as well as in areas of economic growth where new businesses attract more job seekers than the number of jobs available. Post (2002) also found that many of the rural homeless are working, but the jobs tend to be temporary ones and do not provide benefits. Although incidences of homelessness are shorter, many homeless cannot access the support services offered in urban areas. Burt (1999) found that although nearly one third of programs servicing the homeless were located in rural communities, their scope of services was limited.
 
Program Examples
 
What States Are Doing
 
Between January 1, 1999, and June 30, 2003, Minnesota provided housing assistance to low-income families through several efforts, including using TANF reserve funds to support existing programs. This was a one-time-only investment designed to assist families with short-term, nonrecurring housing crises. The additional funding for transitional housing and homelessness prevention programs helped families stabilize their housing for up to four months. Other funding was transferred from the department of human services to the Minnesota Housing Finance Agency in partnership with the department of revenue, which oversees the state earned income tax credit program, to free up state funds for building or rehabilitating low-income housing. An additional $54 million was appropriated by the state legislature beginning in 2000 to develop a new building program—Minnesota Affordable Rental Investment (MARIF)—targeted to geographic areas in the state with the highest numbers of TANF recipients. MARIF was supplemented with other funding and awarded on a competitive basis. The funds are a 30-year set-aside for developers to encourage them to build housing for TANF-assisted families. Developers agree to a 30-year commitment to provide these housing units. In addition, developers are required to ensure support services are available to families through coordination with other agencies. A total of 434 residential units were created for use; of that total, 118 were located in rural areas. As with MARIF, these funds continue to benefit families, because loans are made available again once they have been paid down. Contact Pam Reinstatler at 651-296-9407 or Pam.Reinstatler@state.mn.us.
 
Vermont’s rental or mortgage arrearage benefit, funded by TANF and state maintenance-of-effort funds, is part of its Emergency Assistance Program that helps low-income families facing eviction or foreclosure preserve their housing and avoid homelessness. Assistance is available to eligible low-income families with children living in the home. To be eligible, the family must have exhausted its available income and resources, must be facing a loss of shelter because of rental or mortgage arrearage, and must have received a notice of termination or statement of amount owed. There also must be a likelihood that the payment of the arrearage will prevent the family’s homelessness rather than postpone it, and the landlord or bank must agree not to evict or foreclose. One category of mortgage and rental arrearage assistance provides up to two months of assistance in a 36-month period and the other provides up to three months of assistance in a 12-month period. The assistance covers only actual rental or mortgage arrearages. About 65 percent of program participants reside in nonmetropolitan areas. Contact Paula Gottwik at 802-241-2887 or paulag@path.state.vt.us.
 
 
 
 
What Regions and Localities are Doing
 
Like many other Native American tribes, the White Mountain Tribe in Arizona faces a challenging economic environment. Unemployment hovers at nearly 60 percent, and more than 1,400 families are in need of housing. To address these challenges, the tribal housing authority implemented the Apache Dawn program in 1999. The program aims to develop 300 single-family homes for the reservation while providing jobs to tribal members. Funds to support the program have been obtained through a partnership among the federal government, the tribal government, and private lenders. Funds have been raised from HUD, tribally issued bonds, and the Indian Housing Block Grant. By contracting with tribal businesses for the construction, the housing authority created 150 new jobs and lowered its per-unit cost by 30 percent. In addition, 85 percent of the lumber used and needed gravel and cement have been obtained from tribal companies.
 
Since the plan was approved, 228 housing units have been completed; another 72 units are slated for completion in 2004. Completed homes are made available to tribal members on a lease-purchase basis. After the first 10 years, families may purchase their home, and they have the option to purchase each year thereafter. Families choosing not to purchase continue to make monthly payments for 30 years, at which time they become owners.  A second program to develop another 100 single-family homes in conjunction with scattered site development is in the planning stages. Contact Gladys Bencomo at 928-338-4831 or gbencomo@cybertrails.com.
 
Mercy Housing South West (MHSW), located in Colorado, develops and manages affordable housing for low-income area families with incomes ranging from 9 percent to 60 percent of the area median. Target populations include working families, senior citizens, formerly homeless families, and adults with mental or physical disabilities. MHSW is one of six regional development corporations affiliated with the Mercy Housing System, founded by the Sisters of Mercy in Omaha in 1981. MHSW owns and operates 11 properties throughout the state. The current inventory of 791 single- and multifamily housing is home to more than 2,000 people. MHSW also provides support services to help clients move toward self-sufficiency through skills building for career advancement, financial planning, and youth leadership. In rural LaPlata County, MHSW is building 46 units of affordable housing that will provide onsite services to low-income families as well as residents with mental illnesses. It is the first such housing program in the county, whose residents will be served in partnership with the Southwest Colorado Mental Health Center. The site will include a community learning center with access to computer learning, office space for the mental health center, and leased space. MHSW is exploring collaborative arrangements with other community service providers to broaden its scope of services in the area. Contact Melinda Pollack at 303-830-3428 or mpollack@mercyhousing.org.
 
Interfaith Housing of Western Maryland, in operation since 1992, has developed 39 projects of more than 600 housing units that provide housing for a five-county area in the state. Another 400 units are under construction. About 50 percent of the units are located in areas USDA defines as rural. Among the programs that Interfaith Housing operates is the Mutual Self-Help Housing program supported with funds from USDA. Under this sweat equity program, five to six families work together to build a house for each family. Interfaith Housing provides construction supervision and helps arrange low-interest mortgages for these new homeowners. Participating families receive budget and home maintenance counseling prior to the project’s completion. To date, 140 units have been built. In addition, Interfaith has developed three transitional housing shelters owned and operated by organizations with expertise in providing support services to families moving toward self-sufficiency. Contact Jim Upchurch at 301-662-4225 or jupchurch@interfaithhousing.org.
 
The Southern Maryland Tri-County Community Action Committee, Inc. (SMTCCAC), organized in 1965, serves three counties in southern Maryland, a rural but developing area that lies between the Chesapeake Bay and the Potomac River. Although a growth area, affordable housing has become increasingly scarce. The average cost of housing is lower than in the Washington metropolitan area, attracting newcomers who commute to jobs outside the region. Although defense technology is a growing industry in the area, the jobs that have been created are mostly high-salary jobs. As a result of this growth, affordable rental and home ownership opportunities are hard to find for many longtime, low-income area residents who work in the retail and service industries. SMTCCAC also works with sister agencies to provide counseling services to homeless families.
 
SMTCCAC’s housing programs consist of four major components: homeownership, rental management, community development, and housing preservation. The homeownership program combines Self-Help Housing, the USDA’s rural development program, and HUD’s community services program. Self-Help funds are used to provide subsidized mortgages to low-income families that perform most of the labor needed to build their homes. The community services program makes use of educational and mutual support to prepare potential homebuyers to qualify for mortgages. Working in conjunction with local housing development corporations, this program secures grants and loans and packages mortgage applications to provide affordable single-family housing. To date 648 have units been created throughout the three-county service area. SMTCCAC also manages 121 rental units it developed in five local communities. Funding from USDA and the Maryland Department of Housing and Community Development (DHCD), as well as low-income housing tax credits, were used to finance development. Housing counseling assistance is available to renters. SMTCCAC’s community development activities include identifying opportunities for affordable housing development, conducting feasibility studies, and obtaining financial commitments. Its housing preservation program provides weatherization and home repair services to low-income homeowners. Local utility funds and loans and grants from USDA, the U.S. Department of Energy, and Maryland DHCD are used to finance repairs. More than 750 rehabilitation projects have been completed.  Contact Robert Tourigny at 301-274-4474, ext. 277, or Robert@smtccac.org.
 
The Kentucky Mountain Housing Development Corporation (KMHDC), a church-related organization, provides affordable and safe housing for low-income families in the southeastern counties of Clay and Jackson, where an estimated 39.7 percent and 30.2 percent of families, respectively, live in poverty. Founded in 1973, the corporation initially received funding and volunteer services from two local churches. Early support was also provided through the Daniel Boone Development Council, a local community action agency.
 
KMHDC constructs new homes and repairs abandoned homes for these low- and very-low-income families by making affordable loans and grants, historically making available more than 90 percent of its grants and financing to this population. KMHVDC maintains two offices, one in each county, where loan applications, homeownership counseling, and house payment collection are conducted. The corporation established its own revolving loan fund in 1981 to provide financing for families that could not qualify for loans from other sources. The fund has financed 344 new homes and 415 home repairs for families with incomes averaging below $12,000 per year. Since its inception, KMHDC has built 640 new homes, developed three subdivisions, and built five apartments buildings designated for low-income rentals. Contact Marthana Dobson at mdobsonkmhdc@alltel.net.
 
The Metropolitan Housing and CDC (MHCDC), a faith-based organization located in rural North Carolina, has developed more than 500 units of affordable housing since its inception in 1992. A MHCDC-developed partnership will produce 150 more homes, with a large component reserved for low-income residents, by using proceeds from the sale of some of the upscale housing developed as part of the same project to finance affordable housing for others. In addition to the development and sale of single-family units, MHCDC has developed rental units for low- to –moderate-income tenants and apartments for low-income elderly residents and others with special needs. Contact Edwin Moran at 252-940-0174 or edwinm@MetropolitanCommunity.org.
 
Montana’s Glacier Affordable Housing Foundation (GAHF), created by Glacier Bank in 1995, provides affordable housing for low- to –moderate-income state residents. The foundation provides down payment and closing cost assistance to first-time homebuyers who have incomes at or below 80 percent of their county of residence median income. Eligible first-time buyers must have stable employment, good credit, and a minimum 1-percent down payment in cash or sweat equity. They must also complete a nine-hour homeowners’ education course offered by attending a local community college or privately conducted class.
 
As of March 31, 2003, GAHF has 215 homes in its portfolio, representing 10 different grants. Of the families that have received assistance, nearly 77 percent have incomes at or below 69 percent of median income. Funds provided to qualifying homeowners are secured through GAHF’s resale restriction agreement (RRA) that contains a recapture clause requiring loans to be paid in full when the home is sold or refinanced. No interest accrues and no monthly payments are required. An equity share provision in RRA requires the owner to share the equity with GAHF to the extent the assistance represents the original purchase price of the home. Between 1996 and 2003, the average cost of homes purchased under the program increased from $67,890 to$109,020. This increase in property value enables the foundation to use equity monies to provide additional subsidies to the next generation of first-time homebuyers. As funds are “recaptured,” they are made available to other low- to –moderate-income homebuyers in the jurisdictional area served by the original funding source. Contact Lynn Moon at 406-758-7741.
 
Resource Contacts
 
·         Council for Affordable and Rural Housing, Colleen Fisher, 703-837-9001.
·         Council of State Community Development Agencies, Linda Thompson, 202-293-5820 or lthompson@coscda.org.
·         Housing Assistance Council, Jennifer Pinder, 202-842-8600 or Jennifer_p@ruralhome.org.
·         National Alliance to End Homelessness, Steve Berg, 202-638-1526 or sberg@naeh.org.
·         National American Indian Housing Council, Jane DeMarines, 202-789-1754 or jdemarines@naihc.net.
·         National Association of Development Organizations, Zachary DeWaters, 202-624-7806 or zdewaters@nado.org.
·         National Coalition for the Homeless, Michael Stoops, 202-737-6444 or mstoops@nationalhomeless.org.
·         National Council of State Housing Agencies, Jennifer Schwartz, 202-624-7710 or jschwartz@ncsha.org.
·         National Law Center on Homelessness and Poverty, 202-638-2535.
·         National Low-Income Housing Coalition, Danilo Pelletiere, 202-662-1530 or danilo@nlihc.org.
·         National Rural Housing Coalition, Bob Rapoza, 202-393-5229 or bob@rapoza.org.
·         Rural Community Assistance Corporation, George Chimiklis, 916-447-9832, ext. 114, or georgec@rcac.org.
·         Rural LISC (Local Initiatives Support Corporation), Sandy Rosenblith, 202-739-9275 or srosenblith@liscnet.org.
·         Urban Institute Labor and Social Policy Center, Martha Burt, 202-261-5551 or mburt@ui.urban.org.
 
Publications
 
Brooks, Mary E. Housing Trust Fund Progress Report 2002, Local Responses to America’s Housing Needs. Frazier Park, Calif.: Center for Community Change, 2002. Available at
http://www.communitychange.org/publications/housingtrust.htm.
 
Burt, Martha R., Laudan Y. Aron, Toby Douglas, Jesse Valente, Edgar Lee, and Britta Iwen. Homelessness: Programs and the People They Serve. Washington, D.C.: U.S. Department of Health and Human Services and U.S. Department of Housing and Urban Development, August 1999. Available at http://www.urban.org/UploadedPDF/homelessness.pdf.
 
Gordon, Gary L. “Native Americans on Tribal Lands Have the ‘Least Chance’ of Successful Homeownership.” Remarks at the National Rural Housing Summit, Washington, D.C., June 16, 2003.
 
Housing Assistance Council. Information About the Low-Income Housing Tax Credit for Nonprofits Developing Rural Rental Housing. Washington, D.C.: Housing Assistance Council, April 2002. Available at http://www.ruralhome.org/pubs/infoshts/15.htm.
 
Housing Assistance Council. Why Housing Matters: HAC’s 2000 Report on the State of the Nation’s Rural Housing. Washington, D.C.: Housing Assistance Council, December 2000. Available at http://www.ruralhome.org/pubs/hsganalysis/SNRH/why/whyhousingmatters.pdf.
 
Jaure, Ruth, Robert A. Rapoza, and Deidre Swesnik. Opening Doors to Rural Homeownership: Outcomes from the National Rural Housing Coalition Rural Homeownership Symposium. Washington, D.C.: National Rural Housing Coalition, revised June 2003. Visit http://www.nrhcweb.org/.
 
Nelson, Arthur C. “Top Ten State and Local Strategies to Increase Affordable Housing Supply.” In Housing Facts and Findings, vol. 5, no. 1. Washington, D.C.: Fannie Mae Foundation, 2003. Available at http://www.fanniemaefoundation.org/programs/hff/v5i1-topten.shtml.
 
Post, Patricia A. Hard to Reach: Rural Homelessness and Health Care. Nashville, Tenn.: National Health Care for the Homeless Council, January 2002. Available at http://www.nhchc.org/Publications/RuralHomeless.pdf.
 
Rural Community Assistance Program. Rural Matters. Washington, D.C.: Rural Community Assistance Program, summer 2003. Visit http://www.rural-matters.org/.
 
Sard, Barbara. Using TANF Funds for Housing-Related Benefits to Prevent Homelessness. Washington, D.C.: Center on Budget and Policy Priorities, April 3, 2001. Available at http://www.cbpp.org/4-3-01TANF.pdf.
 
Sard, Barbara, and Will Fischer. Answers to Questions Raised During Assistant HUD Secretary Liu’s Housing Voucher Block Grant Testimony. Washington, D.C.: Center on Budget and Policy Priorities, June 10, 2003. Available at http://www.cbpp.org/6-10-03hous.pdf.
 
Smith, Courtney. “Increasing Access to Housing for Low-Income Families.” Issue Brief (April 2, 2002). National Governors Association Center for Best Practices, Washington, D.C.  Available at http://www.nga.org/center/divisions/1,1188,C_ISSUE_BRIEF^D_3551,00.html.
 
U.S. Bureau of the Census. American Housing Survey for the United States 2001. Washington, D.C., 2001. Available at http://www.census.gov/prod/2002pubs/h150-01.pdf.
 
Whitener, Leslie. “Rural Housing Conditions Improve but Affordability Continues to Be a Problem.” In Rural Conditions and Trends, vol. 8, no. 2. Ames, Iowa: Iowa State University Extension, 1997. Available at http://www.extension.iastate.edu/housing/media/pdf/rcat82p.pdf.
 
Wills, Darryl S. “Rural Housing Prices Grew Rapidly in the 1990s.” In Rural America, vol. 17, no. 3. Washington, D.C.: Housing Assistance Council, fall 2002.  Available at
http://www.ers.usda.gov/publications/ruralamerica/ra173/ra173h.pdf.
 
 
This is a periodic special edition of the Welfare Information Network’s Issue Note series provided through the Rural Assistance Center, a partnership between The Center for Rural Health at the University of North Dakota, the Rural Policy Research Institute and the Finance Project, and is funded through the U.S. Department of Health and Human Services, Health Resources Administration, Office of Rural Health Policy.