JONESBORO, AR (KAIT)- The government shutdown is making it harder for some people in rural communities to buy a home. The shutdown has put a halt on rural development loans through the United States Department of Agriculture.
USDA home loans are applicable to people in rural communities with a family income cap starting at about $75,000. Recipients of the USDA home loan also do not have to worry about making a down payment.
"Rural development loans are very common in the county especially for someone with no money," said Ralph Crain, realtor with Fred Dacus Associates.
Within the past 10 days, Crain said he's had one person come in looking to purchase a home using a rural development loan.
"I know another agent in our office a few minutes ago said he's got one on hold because they're asking about a RD loan," he said.
Beth Crockett, vice president of the mortgage department at First Security Bank in Jonesboro says the mortgage insurance on a rural development loan is also a lot cheaper.
"We can take loan applications, we can get the appraisal on order, get everything ready to submit to rural development just as soon as the government is back up and running again," Crockett said. "If the loan was already approved through USDA, we can go ahead and close those"
She said the longer it takes for the government to be restored, the longer it will take to do all the paperwork for the loans. Not only will buyers be affected but also sellers.
"If they can't sell you know they are sitting there on hold, so it does have an effect on everyone in the county," Crain said.
"It's going to effect the time frame that's involved with meeting closing dates, getting that down, could possibly affect the interest rates lock in," Crockett said.
According to the USDA, a more permanent delay in the program would cause a substantial reduction in housing available in rural areas.