LYONS, Kan. (KSNW) — Keeping small towns in Kansas alive. A new program is putting millions of dollars into rural areas of the state, and it’s expected to benefit thousands of homeowners.

This $2 million Rural Home Loan Guarantee program is through the Kansas Housing Resources Corporation (KHRC).

KHRC’s executive director said this would help small-town banks and families get into their dream homes.

“There is a need for housing of all different qualities and sizes,” said Lyons City Administrator Chad Buckley.

Getting people to move to small towns like Lyons can be difficult.

“We have jobs all the way around us, and we would love for people to work here and live here, so the housing needs to be here for that to happen,” said Buckley.

“It’s one of these things people want to be here. There is nowhere to live. There is nowhere to rent,” said Brandon Winn, Luxe Design & Build owner.

This new program could make it easier for rural lenders to help potential homeowners.

“Somebody will go to buy say a $200,000, $250,000 home in a rural community, and it will immediately appraise for $50,000 less than it costs to build that home because of that there is a gap. That is a gap where lenders can loan because they don’t have a security interest in the full amount of their loan,” said Ryan Vincent, KHRC executive director. “Now, we can guarantee that gap. That gap is between 80%, up to 125% of the loan-to-value ratio of the loan.”

Meaning homeowners can build, and rural banks can make the loan.

In Sterling, state funding has helped the town bring in new housing.

“We have six single-family homes either currently in construction or just finished being built,” said Craig Crossette, Sterling city manager.

Crossette said funding like this is necessary.

“Communities of our size, you know, we have limited resources, and the cost of vertical construction is very expensive, but the cost that folks don’t always think about is the cost of the public infrastructure necessary for new development,” said Crossette.

If you are interested, KHRC recommends you discuss this with your bank.

You can learn more about the program here.