USDA Expands Subprime Loan Program In Western North Dakota
Western North Dakota has a housing shortage driving spiking prices. There’s no doubt that is creating headaches for those trying to find a place to lead, but are government-backed subprime loans really the answer?
According to Jasper Schneider, the USDA’s Director of Rural Development here in North Dakota, they are. Why, they can even provide up to 100% financing for those who can’t get a loan otherwise.
What’s the worst that could happen?
Jasper Schneider, state director for United States Department of Agriculture Rural Development, said effective today, USDA will increase the value of homes it will finance in North Dakota from $170,000 to $240,000.
In large part due to increased housing prices in northwest North Dakota, the federal housing program is changing its rules in an effort to help more people, Schneider said.
“The game has changed,” Schneider said. “Last year, we financed about 500 homes worth about $60 million. The justification for the change is the market analysis. The market dictates that prices for a modest home go up to $240,000.”
USDA offers two options for people looking to buy a home. For low-income buyers, USDA offers direct financing with a current interest rate of 3-1/8 percent. For those who don’t meet the low-income threshold, USDA offers loan guarantees for loans from other banks.
And USDA still lets people buy homes without massive down payments.
“We do offer up to 100 percent financing, which most people don’t,” Schneider said.
Things have well and truly gone off the rails when we reach a point where the United States Department of Agriculture is handing out home loans.
Want to know why our country has a debt problem? This sort of mission creep, and sorry public policy, is why.