So you want to buy a fixer upper.
There is a fine line between a home that needs a little work and a home that is not financeable.
Your help is needed! We have received notice that USDA is considering changes to eligible area maps for USDA Rural Development housing programs in Washington State. Port Townsend and Port Angeles are both on the chopping block. USDA is mandated to conduct a review of areas under its jurisdiction every five years. The last review was in 2017-2018.
USDA is accepting public comments (until early June) regarding the potential loss of eligibility for Rural Development housing programs. Please email wa-sfh@usda.gov to let USDA know how vital these programs are for low- and moderate-income families in Port Townsend.
Why are USDA Home Loans Important?
USDA Direct mortgages are the primary financing mechanism for Habitat for Humanity of East Jefferson County and other non-profit and housing authority homeowners. USDA Direct provides 0% down mortgages to homeowners earning less than 80% of Area Median Income (AMI). These loans have reasonable interest rates which can be subsidized down to 1% to ensure a homeowner's payment never exceeds 29% of their income. The loss of this program would be a huge blow to financing of affordable housing in Port Townsend.
In fact, the USDA Direct program is the only financing mechanism currently available that will allow someone who earns less than 80% of AMI to own a home in Port Townsend. Home prices are too high for less than 80% AMI borrowers with little to no down payment to afford homes with mortgages at market interest rates.
Losing USDA's rural designation would also mean Port Townsend would lose the USDA Guaranteed Rural Housing Home Loan (a 0% down option for those earning less than 120% of AMI) as well as a suite of home repair loans and grants.
What is USDA's Definition of Rural?
USDA defines a rural area as open country or any town, village, city or place which is not part of an urban area and which:
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Has a population of less than 2,500
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Has a population of 2,500 to 10,000 and is rural in character
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Has a population of 10,000 to 20,000 and is not contained within a Metropolitan Statistical Area (MSA) and has a serious lack of mortgage credit for lower and moderate-income families.
USDA further stipulates that any area that was classified as rural in the previous three decades but has since become ineligible could continue to be considered rural by USDA's definition (at least until 2030) if the area has a population of 10,000 to 35,000, is rural in character, and has a serious lack of mortgage credit for lower and moderate-income families.
Read more about USDA's rural classification requirements here: HB-1-3550, Chapter 5.3.
Please consider emailing wa-sfh@usda.gov to advocate for keeping Port Townsend on the rural list. Port Townsend is far from any urban (or suburban) center, there is a serious deficit of affordable mortgage options for low- to moderate-income buyers here, and we desperately need every available financing vehicle to get people into homes!
