USDA working to help Dickinson homebuyers; City's growth may cause loss of program eligibility
In changing from a sleepy agricultural town into a booming Oil Patch hub, Dickinson's population growth could hurt the eligibility of its residents seeking help from U.S. Department of Agriculture programs.
USDA Housing Administrator Tammye Trevino met with local officials -- most from Dickinson -- at the Strom Center in Dickinson on Tuesday to discuss options at the federal level that might help keep more residents qualified for USDA programs that may help to cushion the blow from the expansive growth happening here.
"Let's help you with what you need and at the same time I'm going to be able to learn a lot from you," Trevino said.
Due to the city's growth, the USDA has increased its rural development housing loan limit.
"When I started at USDA four years ago, our statewide home loan limit was $147,000," said Jasper Schneider, North Dakota state director for USDA Rural Development. "Just recently we raised it statewide to $240,000. ... Rural housing services in North Dakota in the past year did finance about 500 single family homes."
Although a $93,000 increase is substantial, Shirley Dukart, co-owner of Home and Land Co. in Dickinson, worries that it doesn't help much within the city.
"Our average sale price in Dickinson is $256,000 and that's pretty low considering the new properties," Dukart said. "I don't know how that's going to work."
Seven of the 42 residential properties listed in Dickinson on Home and Land Co.'s website were under the $240,000 mark.
The price of nearly everything is inflated in the Oil Patch -- from groceries to rent to salaries -- so using income guidelines set at the state or even the national level has become problematic.
"The challenge with our loan limits is it's just one-half of the coin," Schneider said. "The other side is the income restrictions."
USDA home loans are down-payment free, setting them apart from other programs that require at least 3.5 percent of the purchase price down, but both the buyer and the property have to qualify for the loan.
If Dickinson grows too much, it may lose its rural status for some programs.
"Our programs are only eligible for folks who live in populations of 20,000 or less," Trevino said.
The USDA uses official census numbers, which are updated every 10 years. The government will officially begin to use the 2010 data in October, Trevino said.
In 2000, Dickinson had 16,010 residents. That increased to 17,787 in 2010.
It's hard to change USDA regulations, but North Dakota may be able to participate in pilot programs addressing its rapid growth which could then be implemented in other states like Pennsylvania and Ohio where growth is expected due to increased natural gas exploration.
"I'm willing to do it as a pilot because I think that the circumstances are unique based on the oil and gas exploration, but not willing for it to be something that would change the program entirely for the whole country because then I'm going to look like (the Federal Housing Administration). The next move from Congress will be 'then let's just consolidate the two programs,'" Trevino said.
No changes are guaranteed, but Trevino is willing to work with North Dakota to find solutions within the USDA to help deal with rapid growth.