U.S. DEPARTMENT OF AGRICULTURE RURAL HOUSING SERVICE
JOINS FDIC'S MONEY SMART ALLIANCE PROGRAM
FOR IMMEDIATE RELEASE MS-011-2003 (06-16-03)
Media Contact: Rosemary George (202) 898-6530
The Federal Deposit Insurance Corporation (FDIC) and U.S. Department of Agriculture (USDA) today announced that the USDA's Rural Housing Service has joined the FDIC's Money Smart Alliance Program. This partnership will provide low-income individuals and families located in rural areas with financial education when they apply for home loans through the USDA Rural Development programs. FDIC Chairman Donald Powell and USDA Under Secretary for Rural Development Thomas C. Dorr made the announcement at the National Rural Housing Summit in Washington, DC.
The partnership links the FDIC Money Smart financial education program to the USDA Section 502 Single Family Housing Program. The USDA program provides loans in two ways: either as a reduced interest-rate direct loan with no down payment requirement for very low and low-income families, or as a loan guarantee for which a fee is charged to guarantee the repayment of market-rate home mortgages made by private lenders to low- and moderate-income borrowers.
"We are excited to be teaming up with the premier federal program that promotes homeownership for low-income individuals in rural America," said Don Powell. "Access to credit and other financial services continues to be a problem for those in rural America, particularly those who fail to qualify for loans because of low incomes and lack of collateral. This makes Money Smart an ideal curriculum for this USDA program, since it was created with low- and moderate-income individuals in mind."
Loans made through the USDA Rural Housing Service give people who do not currently own adequate housing and who cannot obtain credit the opportunity to acquire, build, rehabilitate, improve or move dwellings to new locations in rural areas. Over 43,000 families are served annual through the loan program, with loan amounts averaging between $73,000 and $82,000.
Under the agreement signed today, USDA will provide training on the Money Smart curriculum to staff in all USDA Rural Development State Offices, including those located in Puerto Rico, the Virgin Islands and the Western Pacific areas. In addition, local USDA offices will publicize and provide training on the Money Smart curriculum to its local partners and non-profits interested in working with 502 applicants.
"Creating equity in the future starts with understanding the importance of sound financial management. The cooperative effort will allow more rural families to gain greater financial management skills and will help them to be successful homeowners," said USDA's Thomas Dorr.
The FDIC developed the Money Smart program to help individuals enhance their money management skills, understand basic financial services and build their financial confidence to use banking services effectively. Money Smart is made up of 10 comprehensive, instructor-led modules covering basic financial topics, including an introduction to bank services, tips on obtaining credit and information on buying a home. The curriculum can be used in its entirety or in part, using individual modules to complement other existing financial programs. Money Smart is available from the FDIC in English, Spanish and Chinese and is free of charge to the user. Korean and Vietnamese versions will become available later this year.
Instructions for obtaining copies of the curriculum can be found by clicking on the Money Smart link at www.fdic.gov or by calling (202) 942-3404.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 9,354 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars - insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov or through the FDIC's Public Information Center (800-276-6003 or 202-416-6940).