The proposed legislation encourages the use of standards and procedures from other, similar programs. The legislation specifies that housing financed under the legislation must have a low-income use restriction of not less than 20 years. The low level of appropriations has not only made it virtually impossible to build new housing, but has also limited the ability of the government to preserve and maintain the current stock of Section 515 units. Factors existing in rural environments, such as remoteness and low population density, lead to limited access to many forces driving the economy, such as technology, lending, and investment. Banks in rural areas are often limited in size, with restricted lending capacities and a narrow scope of local expertise.
Rural areas have less access to credit than metropolitan areas.
Banks and other investors, looking for larger projects with lower risk, seek metropolitan areas for loans and investment. Often credit that is available is insufficient, leading to the need for interim or bridge financing. Credit in rural areas is often more expensive and available at less favorable terms than in metropolitan areas. Rural Rental Housing HAC's 1999 State of the Nation's Rural Housing Report. Housing Assistance Council, January 2000.