Today, U.S. Congressman Dan Boren wrote to the United States Department of Agriculture expressing his concern over the news that the Department may no longer be financing loans for homes and businesses with oil and gas leases.
The proposal by the USDA stems from concerns that lending to owners of properties with oil and gas leases may violate the National Environmental Policy Act (NEPA), which calls for an environmental review before federal funds can be spent. Traditionally, federal housing loans have been granted a categorical exclusion from NEPA, and Congressman wrote to urge the USDA to continue with this policy.
The proposed changes would affect the Rural Housing Service Program, which last year provided over $18 billion in loans to more than 140,000 families to purchase or build a new home in rural communities and small towns. The change would also impact the USDA Rural Business and Cooperative Program, which provided $1 billion in loans and grants to 15,000 rural businesses last year.
"The USDA proposal will keep loans out of some of the most economically disadvantaged regions in the country," said Boren. "The families and businesses that benefit from these loans are already struggling to make ends meet, and suspending loans in these areas will discourage economic development in small communities like those in my district in eastern Oklahoma."
"Subjecting these loans to an expensive NEPA study will also jeopardize our nation's progress towards energy independence," Boren continued. "Homeowners and businesses should not be punished for permitting energy leases on their land."
The USDA has indicated that there may be a blanket NEPA review that would apply to all of their lending programs. However, the agency has not budgeted for this review, and as a result a timeline for completion is unknown. In the meantime, all lending to homeowners and businesses with energy leases would be suspended.
The text of the letter is included below:
March 19, 2012
The Honorable Thomas J. Vilsack
United States Department of Agriculture
1400 Independence Avenue SW
Washington, DC 20250
Dear Mr. Secretary:
It was recently brought to my attention that the United States Department of Agriculture Rural Housing Service program may begin requiring an environmental review before it issues mortgages to individuals who have oil and gas leases on their land. Federal housing loans have traditionally been granted a categorical exclusion from the National Environmental Policy Act (NEPA) and I urge you to continue with this policy.
I understand the need to protect our environment and our natural resources, however a change in procedure would greatly discriminate against families and businesses located in areas of our country that are rich in oil and gas. Many loan recipients are already struggling to make ends meet and taking away this loan option would only discourage economic development in rural communities like the many located in my eastern Oklahoma district.
Not only would an environmental review harm the individuals that need the loans the most, it would also be detrimental to our nation's progress towards energy independence. If we make potential home owners choose between getting a home loan to keep their house or maintaining a mineral lease, viable sources of oil and gas may become less accessible.
NEPA was passed into law in 1969 and it is my understanding that home loans have not been subject to environmental reviews in the time since its enactment. To change now and to require the additional resources, time, and man power to conduct an environmental review every time an individual or business with an oil or gas lease applies for a federal home loan would not only burden the loan applicant, but also the federal government itself. Our economy is in jeopardy and now is not the time to spend when it is unnecessary.
Thank you for taking the time to hear my concerns. Please feel free to contact me if you would like to discuss the issue further. My senior legislative assistant, Elizabeth Shelton can help with any additional information you may need.
Member of Congress