The nonprofit Federation of Appalachian Housing Enterprises (FAHE) will deploy $25 million in federal money to help low-income home buyers in Central Appalachia.
Known as the 502 Demonstration, the pilot program with the U.S. Department of Agriculture (USDA) is the first partnership of its kind in the nation, where nonprofit lenders are given unprecedented access to fast-track the distribution of federal funds, said FAHE.
The mortgage funds will be made available based on the USDA’s Sec. 502 direct loan program, which received new funding through the American Recovery and Reinvestment Act of 2009.
Loans originated through this pilot program will feature payment assistance and interest rates as low as 1 percent. For those who qualify, 100 percent financing and alternative credit analysis are available.
As an association of nonprofit housing providers, FAHE is uniquely positioned to deliver affordable mortgages in some of the country’s poorest and underserved communities, said group leaders.
“One hundred thousand families in the [Appalachian] region live in substandard housing that is overcrowded or lacking essentials like electricity and plumbing. Another 650,000 are cost-burdened because the real incomes are so low,” FAHE CEO Jim King told Affordable Housing Finance last year.
FAHE will administer the funds through its mortgage division, JustChoice Lending.