Cut in USDA rural development loan program may hurt Louisiana towns

A number of suburban New Orleans communities may be declared ineligible to participate in a popular government-backed rural home loan program this fall, limiting mortgage options for prospective homebuyers.

Louisiana has always been one of the nation’s top five participants in the government-guaranteed program, but in recent years, local participation has skyrocketed because conventional loans now carry stricter mortgage qualification, insurance and down-payment requirements. The rural development loan program is so popular that it accounts for about half of all home loans in the River Parishes, and builders in the River Parishes, on the north shore and in areas outside of Baton Rouge have begun building homes at price points that would enable prospective buyers to qualify for the program.

But because of population growth and an expiring grandfather clause that kept many communities in the program, a number of suburban New Orleans communities will no longer qualify as of Oct. 1.

Times Picayune

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