USDA map changes could impact local housing

Greater Wilmington is known for its growth. Once clocked as the fastest-growing region in the nation nearly 20 years ago, new subdivisions and shopping centers spilled over into former soybean and cotton fields. 

It’s a trend highly noted by demographers across the state and country, and now might be driving U.S. Department of Agriculture officials to change parts of the local region from rural to urban labels – a move not sitting well with area Realtors, builders and commercial brokers. 

By Oct. 1, USDA officials must revise its maps of rural areas across the nation, though there is a push for Congress to grandfather in communities.

The maps dictate whether homeowners and developers can qualify for USDA programs, such as the Rural Housing Service single-family and multi-family loan programs used to finance or construct new residences. 

To prepare for the pending revisions, which are based on the 2010 census, federal officials earlier this year identified 923 rural communities that would no longer be eligible for such funding and would be removed from the rural category. 

Northern New Hanover and Brunswick counties were part of the list, along with a number of municipalities surrounding large metros in other fast-growing North Carolina counties. 

That means homebuyers who live around Wilmington and Leland would no longer qualify for USDA loan options to finance the purchase or construction of a home, and developers would no longer be able to apply for USDA financing for new residential construction. The changes could also make it difficult for existing homeowners and builders that acquired USDA loans years ago to refinance their homes and developments if the proposed specifications move forward.  

Area mortgage bankers are also wary of the pending changes. 

Joey Milam, marketing director of Wilmington-based Alpha Mortgage, said company officials have contacted lawmakers about the issue.  

“Builders are buying land in areas because they are USDA eligible,” Milam said. “Year-to-date of all [of Alpha’s] purchase contracts that were completed, 11 percent were USDA. We’re waiting to see what’s going to happen, but we are very concerned.” 

Pender County would not be affected by the update. The USDA defines rural as communities either with a population of less than 10,000 in a metropolitan area or a population up to 20,000 if outside a metropolitan statistical area.

“This removal would impact significant areas of southeastern North Carolina,” according to a statement by Wilmington-based Business Alliance for a Sound Economy. “We have been in contact with many of our members who are rightfully concerned about this issue. Congress needs to act quickly to save rural housing.” 

For years, Congress has grandfathered communities that were “rural in character” for them to continue to have access to the housing programs.

U.S. Rep. Jeff Fortenberry, R-Neb., has sponsored an amendment to the House Agriculture appropriations bill to preserve the current rural USDA map for a year – a measure supported by the National Association of Realtors, the National Association of Home Builders and the National Rural Housing Coalition. 

Rep. Mike McIntyre, D-N.C.’s 7th District, along with a bipartisan contingency of 23 other Congressional members, also signed a letter to the House leadership asking for a one-year grandfathering provision related to the map.