USDA approves more home loans last year; national rankings improve

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An increase in federal housing loans in New Mexico has bumped the state up from 47th to 24th in the nation.

State Director for U.S. Department of Agriculture Rural Development Terry Brunner said his agency set a record in the number of home loans produced in the 2013 fiscal year that ended on Sept. 30.

The USDA provides financial assistance in the form of direct loans and grants to those seeking to buy a home or fixing up their existing house.

Not only are the loan numbers up across the state, Brunner said Valencia County was one of the higher performing counties.

"We had more applicants here," Brunner said. "I think people are starting to understand better that USDA is involved in housing. People typically think HUD, FDIC or Fannie Mae when they talk about federal bank lending. Our role is to help strengthen rural communities and one way to do that is housing."

Brunner added that having one of the agency's regional offices located in Los Lunas probably also increased the number of applicants.

In Valencia County, there were 12 direct loans made to buyers, which totaled about $1.2 million, and about 89 USDA-backed loans, where the bank is the agency's client and the borrower receives the benefit of a federally-backed loan.

Facing a combination of factors, such as an atmosphere of sequestration, ongoing budget problems and diminished staff, Brunner said one reason his agency increased loan numbers was due to the slight improvement in the New Mexico economy in general.

"People are feeling a little more confident, a little more secure in their jobs and are ready to make the leap of owning their own homes," he said.

Brunner said borrowers have been more successful in obtaining financing because USDA is developing partnerships with local organizations that are bringing in better applicants with stronger credit scores and who have taken financial literacy class.

"They are better prepared. We have local organizations that know the community and homeowners, local nonprofits assist in finding people housing and local chambers or councils of government providing financial literacy and credit counseling," Brunner said.

The director emphasized credit counseling for prospective borrowers.

"I don't think people are as aware of that system and credit scores. They assume if they do one thing here and one thing there, the score will go where it needs to," he said. "You have to be active and find ways to improve your score. Everybody — wealthy and poor and in-between — need to look at their score."

Individuals seeking assistance from USDA will most likely apply for a direct loan, Brunner said. If all the criteria are met, borrowers could come away with a home loan with a very low interest rate, no down payment required and no mortgage insurance.

Borrowers can buy, build or rehabilitate a home with a direct loan. In the case of a USDA-guaranteed loan, Brunner said borrowers many times may not even know the agency helped.

In the 2013 fiscal year, more than $76 million was made in USDA home loans in New Mexico, guarantees and grants, compared to nearly $71 million last fiscal year.

That amounted to 624 obligations estimated to have affected the lives of 1,872 rural New Mexicans allowing them to buy or build a home, or upgrade the house they own.

And while 2013 was a record year, the number of loans and grants have increased across the state in the last five years, Brunner said in a recent press release.

"We attribute this success to excellent staff work and the development of community partners that help us deliver our programs deeper into rural communities," he said.

The agency also provides loans for improvements to multi-housing units. In 2011, the Belen Crossing Apartments and the Hilltop Terrace Apartment Complex in Los Lunas each got a renewed look after a combined $4.2 million in renovations from the USDA's Rural Development.

The Los Lunas USDA office is at 2600 Palmilla Road Suite C, and can be reached at 865-4643, ext. 4. It serves Bernalillo, Sandoval, Santa Fe, Torrance, Valencia, Socorro, Taos, Los Alamos and Rio Arriba counties.

For information about rural housing and rural development, visit www.usda.gov.


-- Email the author at jdendinger@news-bulletin.com.