WASHINGTON (1/10/14)--The Credit Union National Association strongly supports the U.S. Department of Agriculture's (USDA) efforts to establish a program directed at increasing lending in rural areas, and urged USDA to consider credit unions as a lending option as it revisits existing lending programs and develops new ones.
The CUNA statement came in the form of a comment letter on an interim rule that would establish the Single Family Housing Guaranteed Loan Program (SFHGP). CUNA Senior Assistant General Counsel Luke Martone wrote that the loan program "aims to provide low- and moderate-income persons who will live in rural areas with an opportunity to own decent, safe, and sanitary dwellings and related facilities."
"Numerous credit unions operate in rural areas and we believe this program will benefit not only credit union members in these areas but also the broader communities," the CUNA letter said.
CUNA encouraged the USDA to extend the permissible loan term to 40 years when in the best interest of the member-borrower.
The interim final rule goes into effect Sept. 14. CUNA thanked USDA for providing this lengthy compliance deadline, and for recognizing "the general need to make the program more 'user-friendly' and more compatible with existing mortgage lending practices."
CUNA encouraged the USDA to examine similar programs with an eye toward increasing usability by both lenders and borrowers. CUNA also urged USDA to provide credit unions and other lenders with much-needed information to assess whether and how to participate in the SFHGLP by making its administrative instruction handbook available as early as practical.
The USDA could also provide additional resources such as webinars and audio conferences to inform stakeholders, and CUNA and state credit union leagues would welcome the opportunity to promote and/or partner with USDA on such outreach efforts.
For the full comment letter, use the resource link.