RAPID CITY, S.D. – Nationwide, housing costs are skyrocketing as more families lack access to a safe, affordable and decent place to call home. Here in South Dakota, every one in 11 households pay half or more of their income on housing.
Alongside hundreds of local Habitat organizations and affordable housing advocates, this week in Washington, D.C., Black Hills Area Habitat representatives will meet with US Senator John Thune, US Senator Mike Rounds, and US Representative Dusty Johnson to urge action and prioritization of policies that will increase the number of affordable homes, especially for homeownership.
Congress can respond to this need by supporting vital housing and community development programs in 2025 and through the passage of the bipartisan Neighborhood Homes Investment Act.
There are a number of federal solutions that can help increase the number of affordable homes across the country such as:
Self-Help Homeownership Opportunity Program (SHOP): SHOP is the only HUD grant program that provides funding exclusively for homeownership projects serving low-income families. With $250 million in SHOP funding from 1996 through 2022, Habitat has leveraged these funds into $1.6 billion for local community development.
HOME: HOME provides formula grants to states and localities that communities use in partnership with local nonprofit groups, including Habitat affiliates, to fund a wide range of affordable housing activities. HOME funds support Habitat’s work to repair, rehabilitate, or reconstruct owner-occupied housing. The program also supports land acquisition, infrastructure improvements, new construction, demolition, and down payment assistance.
Section 502: Section 502 direct is the only federal homeownership loan program that exclusively assists low- and very low-income families living in rural areas, helping them secure safe, decent, and affordable homes. In the past 60 years, more than 2.1 million families in rural communities have achieved homeownership through this program. Eligible families apply for
and receive a direct subsidized, low-interest loan from USDA Rural Development for their Habitat home, which means USDA serves as the mortgage lender for the homeowner. The loans have 33-year terms (38 for very low-income borrowers) and interest rates that can be as low as 1% with subsidy. Habitat affiliates work with potential homebuyers who qualify for a Section 502 direct loan, frequently assisting them with submitting applications to USDA.
“These federal funds are critically important to our work here in the Black Hills,” said Scott Engmann, Executive Director of Black Hills Area Habitat. “We are building communities with higher homeownership rates resulting in higher graduation rates, healthier family outcomes, and increased civic engagement. These funds also help us with our home repairs program – keeping people sheltered in place. Expanding these funding opportunities for all people is good economics and promising for future generations. And we feel the impact right here in the Black Hills.”
Habitat partner family member, Richard, a single father working two jobs as a cook is in the final stages of completing his Habitat home in Sturgis, SD. He joins Black Hills Area Habitat at the meetings on Capitol Hill.