Late last year a group of 300 leaders from more than 60 rural Iowa communities participated in a one-day conference organized by the Iowa Rural Development Council to discuss a variety of issues and opportunities in their towns and counties. One common topic was a lack of quality housing options for younger families.

Members of the IRDC plan to continue this rural-housing conversation in July during a bus tour to see firsthand some innovative efforts a few communities are doing to address housing challenges. Scheduled stops include the communities of State Center and Marshalltown to look at upper-story housing in downtown districts, and Grinnell’s expansion of pocket neighborhoods and conversion of a historic factory into apartment housing.

Also on the tour will be Newton, where the city and Newton Housing Development Corp. have been organizing community meetings this year to bring local residents together with housing resource providers. A recently completed housing assessment in Newton demonstrated a shortage of quality housing for both upper-income and low-to-moderate income brackets. 

To help meet the mid-to-upper income demand for new single-family homes, builder and buyer incentives were adopted by the City Council three years ago as part of the community’s comprehensive housing initiative. 

Another aspect of the initiative was a program to identify, acquire and demolish blighted residential properties in existing neighborhoods. “This program has been incredibly successful with more than 50 housing units taken down and lots cleared for either redevelopment or sale as additional side yard space for neighboring properties,” says Craig Armstrong, development specialist with the city of Newton. 

Affordable home loan programs
Seven of the cleared lots have been acquired by Woodlands Construction Co. for construction of modestly sized and priced homes that would be eligible for USDA Rural Development direct or guaranteed loan programs assisting qualifying households.

“When new homes are constructed, it enhances the value of the entire neighborhood, as well as provides safe, modern homes for families in low-to-moderate income brackets,” Armstrong adds. “USDA staff has been immensely helpful in providing information and assistance on affordable loan programs to help with purchasing a home, or repairing an existing one.”

The homes being built by Woodlands Construction have a modest layout comparable to what might be found in a typical two-bedroom apartment, and include a large-size single-car garage. The affordable homes have new kitchen appliances, full laundry, two covered stoops, solid-core oak doors, oak millwork, oak cabinetry, lifetime plank flooring, fiberglass exterior doors, quality insulation and central air conditioning. 

“When looking at housing reports I noticed there was an open niche for building affordable housing in several areas throughout central Iowa,” says Jeff Denniston, general manager of Woodlands. “We are excited to be involved in providing quality housing to Newton residents that we do not see being otherwise readily available.” Construction on the first three homes has started with others planned later this year.

Bedrock of America’s economy
June is Homeownership Month, a time to reflect on the important role homeownership plays in American society, especially rural America. Homeownership is a bedrock of the American economy, helping to increase jobs, boost demand for goods and services, and build prosperity.

“Owning a home is a central piece of the American dream,” says Tim Helmbrecht, USDA Rural Development acting state director in Iowa. “Homeownership provides a strong foundation to help build household wealth, start a business, fund education through home equity, or give someone a chance to build a better future.”

Last year USDA Rural Development provided Iowans with $205 million in guaranteed and direct loans to help 2,100 families living in rural communities become homeowners, many of whom now own their first home. “Each year the dream of homeownership is realized by more and more Iowans,” notes Helmbrecht. “Many of these first-time homeowners are bringing new ideas, young families and a sense of energy to Iowa’s rural communities.”

USDA Rural Development has two low-interest, no-down-payment loan programs to help eligible families living in rural communities and areas purchase or construct a new home. Loans and some grants are also available to help families make needed repairs to their homes as well. Direct home loans through USDA Rural Development feature 33-year loan terms, and payment assistance is available.

Typical income limits for a household of four are $75,750 for the guaranteed loan program and $50,650 for the direct loan program. Income limits vary by county and household size, so applicants are encouraged to contact USDA Rural Development staff for limits in their specific area. Eligible homes must be located in a rural area or a community of generally less than 20,000 residents. The home can be existing or new construction. Existing homes must be structurally sound, and the property cannot have any income-producing outbuildings.

For further information, visit USDA Rural Development, call 515-284-4444, or email [email protected].

Leach is public information coordinator with USDA Rural Development in Iowa.