The Department of Housing and Urban Development is taking steps to expand government-insured lending in rural areas.
HUD is proposing to enable Farm Credit System direct lenders to participate in Federal Housing Administration programs as approved mortgagees and lenders.
FHA approvals for such lenders are not allowed under current regulations. The regulations were established when credit was readily available in rural areas.
Lenders have been hard-hit by a reduction of available housing credit in rural areas. By including rural lenders in the FHA program, HUD hopes to enable them to generate more revenue.
In addition, such an expansion would increase the amount of available credit in rural areas.
The plan was disclosed in a public filing Friday.
“Recent difficulties in mortgage finance markets have reduced the availability of housing credit in rural areas,” the filing stated. “HUD proposes to extend FHA mortgagee and lender eligibility to the Farm Credit System to provide an additional avenue for mortgage financing in these areas.”
Comments about the proposal are being accepted by HUD until Oct. 25.
