Fahe’s Direct Loan Packaging Program: A Rural Housing Renaissance

In the heart of Appalachia, Fahe has quietly led a transformative movement in rural homeownership. Through its leadership in the USDA 502 Direct Loan Packaging Program, Fahe has helped thousands of low-income families achieve the dream of owning a home—while reshaping how federal housing support reaches underserved communities.

A Brief History

Founded in 1980, Fahe began as a coalition of nonprofits determined to eliminate persistent poverty in Appalachia. Over the decades, it has grown into a network of 50+ community-based organizations across six states, leveraging over $2 billion in investments and improving the lives of more than 1 million people.

One of Fahe’s most impactful initiatives has been its role in the USDA 502 Direct Loan Program—a federal mortgage product designed for low-income rural households. In the late 1990s, budget cuts to USDA Rural Development (RD) offices led to slower mortgage processing and reduced access for rural families. Fahe stepped in to fill the gap.

From Pilot to Permanent Program

In response to these challenges, Fahe spearheaded a public-private pilot program with USDA RD to test whether nonprofit intermediaries could streamline the loan packaging process. The results were clear: nonprofits could deliver high-quality, decision-ready applications faster and more efficiently than the traditional system.

By May 2016, the pilot was made permanent, and Fahe was officially recognized as an intermediary under the USDA’s Certified Loan Application Packaging Process. Today, Fahe leads a network of over 200 partners across 18 states, helping rural families access affordable mortgages with greater speed and support.

Loan packagers can learn more about the 502 Direct loan packaging program offered through Fahe’s JustChoice Lending arm here.

Growing Pains and Regulatory Evolution

The transition from pilot to permanent program wasn’t without hurdles. Certified packagers had to meet strict training and performance standards, including passing USDA-approved courses and adhering to detailed submission protocols. Fahe worked closely with USDA to refine these regulations, ensuring that quality and accountability remained central to the program’s success.

Packagers also faced challenges in navigating income verification, credit requirements, and application stacking orders. Fahe responded by offering technical assistance, marketing support, and a “think tank” of experts to help local organizations succeed.

Impact and Accomplishments

Fahe’s leadership has resulted in:

• Over $500 million in USDA 502 Direct mortgages delivered to 3,213 rural households
• A growing emphasis on BIPOC homeownership, with 40% of households served in FY23 identifying as BIPOC
• Expansion of recovery-to-work programs that train individuals in construction while rebuilding communities affected by disasters

With continued innovation, collaboration, and a deep commitment to equity, Fahe’s journey isn’t just a story of homes built—it’s a blueprint for how rural America can thrive.