In my part of the World, the Mountains of Western North Carolina we has a community and Real Estate/Building company are very blessed to be able to offer low income families and very low income families the ability to build new homes on their land or family land with a Government assisted USDA loan. This loan is subsidized by the Government and allows these families to keep their payments low but obtain a home safe and up to current building standards. The only restrictions up until now is the limit on the loan was $179,000 and there were strict income limits on how much a family could make. However with the new regulations handed down by the "Authorities in Charge" this loan and process will soon Disappear, and here is why....
Regulation has been passed (or seems to me just handed down without thought) that any new home built through this program can not be over 1400 sq. ft. As stated by a USDA official they looked back over the past 5 years and found the average home "bought" through the USDA program (they did not mentioned built) was 1400 sq ft. With that being the case they handed down a regulation without warning all homes built under the USDA Subsidized program had to be under 1400 sq. ft. and could not appraise for over $179,000. The appraising for under $179,000 will not be a problem its getting a home 1400 sq. ft. and under to appraise for the cost of building!
What USDA Officials do not understand is that in the mid range home there is very little cost difference between a 1500 sq ft home and a 1400 sq ft home. There is however a huge difference in what a 1400 sq ft home will appraise for (In the Current Market and Conditions) and what a 1500 sq ft home will appraise for. In fact on 2 recent appraisals one done on a 1400 sq ft home another done on a 1500 sq ft home there was $30k difference in the appraised value. However the cost to build the 1500 sq ft home opposed to the 1400 sq ft home was only $5760! It actually made it impossible for the 1400 sq ft future home owner to build their home and USDA has told them there is nothing they can do about it. This is a very deserving qualified young couple who went through the strenuous approval process, got approved, got their hopes up and now the Government has made it impossible for them to achieve their dreams of being a new home owner. I could go on and on about how this will affect the economy, local hard working people, and so much more; but I would rather hear some feed back from other Realtors, Builders, and Potential Clients........... Let me know what you think...
Comments(0)