Monroe County Habitat for Humanity begins packaging USDA 502 direct loans to expand affordable homeownership

Scott David, executive director of Monroe County Habitat for Humanity, told commissioners on Aug. 6 that the organization has begun packaging USDA 502 direct loans, a subsidized mortgage program for low- and very-low-income buyers.

David said the nonprofit is the only community organization in Northeastern Pennsylvania packaging the USDA 502 direct loan and expects to close its first loan within two weeks on a rehabilitated home on Dreher. He said the family of seven currently pays $2,400 a month in rent and would move to an estimated $943 monthly mortgage under the program.

"We're the only organization in Northeastern Pennsylvania packaging those loans where the only habitat Community in Pennsylvania packaging those loans. We're very excited," David said.

David added that since opening the program about a month earlier, Habitat had received 46 applications and would need more homes to place applicants. He also mentioned a fundraising raffle to support local housing work.

Why it matters: The USDA 502 direct program provides highly subsidized mortgages (interest-rate subsidies and extended-term loans) for low-income homebuyers. Local packaging by Habitat for Humanity could expand affordable homeownership opportunities in Monroe County.

What the transcript records: David described the loan terms (1 percent interest, 33- to 38-year terms as packaged) and the upcoming close on a house to house a family of seven. He reported a high level of interest (46 applications) in the month since packaging began.

Next step: Habitat will continue to seek suitable homes for applicants and complete closings under the USDA 502 packaging program.