How Local and State Programs Help Communities Grow
States across the U.S. have established agencies that help support community growth through real estate development. Their goal is to attract new industry while improving housing opportunities for the people who live there.
To help make these development projects possible, some states have created real estate mortgage insurance programs that are usually funded by revenue bonds. These funds are used as reserves for backing development projects. For community projects, the funds could come from private sources, and if the project is approved, the state will provide insurance for repayment of the funds. Some funds are also used for special loans for ranch or land projects.
There are also agencies that support the purchase and improvement of land for industrial and office development. These programs are funded by IRBs backed by the state bonding credit, as well as private funds from citizen contributors. The goal is to create new jobs and stimulate commercial activity in the area. The interest paid on these bonds is federal income tax free for investors and helps provide lower borrowing costs for developers.
In addition to Industrial and commercial development, many local governments prioritize expanding low-income housing opportunities. The properties these agencies acquire are often obtained through eminent domain. Each agency must agree to allocate at least 30% of the rental units for low-income tenants before receiving approval. These projects are often funded with tax increment financing.
Beyond urban and community development, programs also exist to support rural economies and agriculture. Agricultural lending programs often rely on open-end mortgages, which are designed to be flexible since it relies on productivity and unforeseen events that can affect crops. To support farmers, Congress created the Farm Credit System, which raises lending funds through assets contributed by its members, including associations and Farm Credit Banks.
The activities of the Farm Credit System are complemented by the USDA Rural Development, which offers loans, grants, and guarantees to help create jobs and support rural economies, including housing, healthcare, water and electric systems, communications infrastructure, and more. It also helps families buy and rent homes safely and provides financial resources to support rural communities in creating quality jobs.
Looking to buy, sell, or invest in real estate in our area? As a licensed Realtor with a passion for helping clients navigate the market, I can guide you every step of the way. Whether you’re exploring local programs, considering a rural property, or just want advice on your next move, I’m here to make the process simple, stress-free, and successful. Reach out today and let’s get started!