In Feb. 2014, President Obama signed H.R. 2642, the Agricultural Act of 2014 (the Farm Bill), to protect more than 900 communities that were at risk of losing access to federal rural housing programs. Many of these communities are protected through 2020; however, some communities may fall out of eligibility starting on Oct. 1, 2014 if they meet any of the following criteria:
- The area was eligible prior to Oct. 1, 1990, or deemed to be eligible between Jan. 1, 2000 and Dec. 31, 2010 AND the population exceeds 35,000 per the 2010 decennial census.
- The area has been annexed into a larger ineligible area and has become part of the larger Census Data Place.
- The area was formerly eligible but is no longer rural in character due to further development and urbanization that is inconsistent with the new rural area definition.
Some state REALTOR® associations have expressed concerns about communities falling out of eligibility based solely on the third criteria of “rural in character.” Rural housing directors in each state have the discretion to determine whether a community is “rural in character.” Due to concerns by REALTOR® members about the subjective nature of these determinations, USDA Secretary Thomas Vilsack issued a letter suspending work on determinations and any designations that would make a place ineligible based solely on “rural in character” criteria. Communities that were slated for ineligibility due to “rural in character” criteria will be reinstated as eligible through Sept. 30, 2015; however, if your community now falls above the population threshold or has become part of a Metropolitan Statistical Area (MSA), it may still be deemed ineligible by your state.
NAR will follow up with the USDA to recommend a consistent application of “rural in character” determinations across the US. NAR will also urge USDA to make the notification process more transparent. Criteria that were used to make a community ineligible should be provided when communities are notified of any changes to eligibility.