Will Cuts in Rural Programs Leave the Same Lasting Wounds as the 2008 Financial Crisis?

It was November of 2009, and his move was fueled by a vortex of circumstances: the Great Recession, the threat of unpaid business taxes and an addiction-induced paranoia. He took my little brother with him, and I stayed behind with my mother in our house in Upstate New York’s Schoharie County, an overlooked corner of Northern Appalachia long plagued by economic decline. My dad stopped paying our mortgage under the promise of building a better life in western North Carolina, where he expected us to reunite as a family.

Every day after I was haunted by the fear that we’d be kicked out of our house. Five months later, my nightmare became reality when the foreclosure notice appeared on our front door. Though it was just a piece of paper, it marked the tragedy that changed my family forever.

After the foreclosure, my mom left for North Carolina to be with my dad and brother. I moved to my best friend’s farm, a mile down the road from my foreclosed house, to finish senior year of high school. The two of us shared a bedroom with pink carpet and a ceiling hand-painted with clouds. I lay awake at night staring at that faux sky, dreaming of a distant horizon where prosperity awaited. I clung to hope because it was all I had.

I couldn’t have imagined the reality we were about to face: complex post-traumatic stress disorder, addictions to alcohol and opioids, depression and anxiety disorders, Stage 4 cancer, housing instability and persistent poverty that may never set us free.

Our story isn’t unique. An estimated 10 million Americans lost their homes in the wake of the 2008 subprime mortgage crisis and the worldwide financial crash that followed. Banks and private lenders had sought massive profits by making predatory mortgages to people who couldn’t afford them, then repackaging and selling those loans as speculative securities, or higher risk investments. By 2010, 46.5 million Americans were living in poverty.

Nearly two decades later, the wounds of this crisis feel fresh for many. In particular, rural families like mine still grapple with the long-term mental health consequences of housing loss. Research shows that the instability, stress and trauma of housing loss worsens existing mental health challenges and can incite new ones. Those who faced foreclosure or eviction during the Great Recession experienced higher rates of depression, anxiety and substance abuse. Each additional blow—such as job loss or a medical emergency—only intensified the risk of lasting mental health struggles.

Despite the known impact of housing loss on psychological well-being, access to help remains insufficient: 37 million rural Americans, more than half of all rural residents, live in mental health care deserts. In the two decades leading up to 2020, suicide rates in rural areas almost doubled.

Today, rural Americans face a staggering mental health crisis as they navigate soaring living costs, unaffordable housing, deepening economic uncertainty and the Trump administration’s efforts to gut support for those most in need.

The GOP’s megabill tax cut package passed on July 3 oversees one of the largest wealth transfers from the working class to the wealthy in American history, cutting more than $1 trillion in vital safety net programs to provide more than $4 trillion in tax cuts for rich individuals and corporations. While the bill permanently expands the Low-Income Housing Tax Credit program (LIHTC), the National Low Income Housing Coalition has noted that LIHTC units are “rarely affordable enough for households with the lowest incomes.” According to the coalition, the bill’s cuts to areas such as food assistance and health care will make it extremely difficult for people with low income to keep a roof over their heads.

Now, stories of loss and psychological suffering from the Great Recession serve as a warning of what the rural poor are at risk of losing once again.

The trauma of foreclosure

Foreclosure brings to mind physical losses—one’s house and the comforts that economic stability affords. I felt these deficits after my family’s foreclosure, but more impactful on the trajectory of my life were the immaterial losses that followed. I didn’t just lose my bedroom; I lost the dignity of sleeping in my own bed. I didn’t just lose the answer to the question, “Where do you live?”; I lost the sense I belonged somewhere.

These compounding losses erased all sense of control and laid the foundation for the complex post-traumatic stress disorder (CPTSD) I face today. Unlike post-traumatic stress disorder (PTSD), which results from a singular event, CPTSD explains the array of mental health challenges that arise from long-lasting traumatic circumstances. My CPTSD diagnosis, from years of living in poverty after the foreclosure, has helped me understand my insomnia, depression and bouts of panic. I still haven’t found a cure for the terrifying, recurring nightmares in which my siblings, mother and I are fleeing mortal danger.

For Christine Sullivan, a mother of three living in Bucks County, Pennsylvania, the news came with a phone call in 2008.

“You’re locked out,” her mother said on the other line.

Sullivan drove to her farmhouse where she lived with her family. The door was indeed locked, the house in foreclosure due to mounting debts that her emotionally abusive husband had concealed.

“You’re in this dream state,” Sullivan tells me. “You have no footing on earth. You’re adrift. Just adrift.”

With help from their community, the Sullivans moved out of their house in the matter of a single, stormy weekend, then moved in with friends. After they secured rental housing, they faced a new set of hardships. That first Pennsylvania winter, they struggled to heat their home, forcing Sullivan to buy a container of heating oil just to keep the house warm.

Poor rental conditions, such as not having heat in winter, are more common in rural America where homes are older and in worse shape. This can cause shame, embarrassment and negative self-image, compounding the trauma of foreclosure.

Although Sullivan has regained her financial footing and now lives in nearby Montgomery County, the fear of losing her home lingers. “I was working for a company for about seven years and they decided to move headquarters,” she says. “The first thing I thought was, ‘Oh my god, I’m going to lose my house.’ It’s like PTSD. Every time there’s any kind of financial surprise, it takes my breath away a little bit.”

“Left behind in their own communities”

Children are particularly vulnerable to the mental health effects of foreclosure. I lost my home as a teen obsessed with AOL Instant Messenger and sleepovers with friends. After the foreclosure, I found myself less interested in school and more interested in escaping my distress through alcohol and male attention.

I wasn’t the only one who numbed their feelings. When our family reunited in North Carolina, I witnessed my 13-year-old brother begin his descent into addiction. The constant stench of marijuana was undeniable. He appeared with glasses of whiskey in hand, as if trying to keep pace with my father, who frequently passed out at the kitchen table. My mother, never a big drinker, took to buying large bottles of white wine. 

Sullivan’s oldest daughter, Gabrielle, tells me she was a junior in high school at the time of her family’s foreclosure. “I felt a lot of shame when it happened,” she says. “People would pass that house every day, and everybody would know.”

Gabrielle, now 32, recalls the time that two girls in school—her best friend and a neighbor—kept tabs on her foreclosed home, checking for renovations and move-ins. The girls, from wealthier families, reported the news back to Gabrielle with condescension. “I just felt really betrayed,” she says “Our friendship kind of started falling apart after that.”

Though college presented an opportunity for Gabrielle to escape this shame, her mother had to work long hours to make ends meet, and her father, who was struggling with substance abuse, had since disappeared from the picture.

“ ‘How am I supposed to go to college next year?’ ” she remembers thinking. “And be able to apply, and also do all the SATs, and also coordinate actually going to school? It was just very overwhelming.”

Gabrielle found her way to Penn State, but returning to the rental house her family lived in posed challenges for her stability. “I was in this limbo,” she says. “I didn’t belong at school all the time—that wasn’t my home. But when I came home on breaks, that didn’t really feel like home either.”

Gabrielle’s youngest sister, Cameron, also felt this sense of displacement. After graduating college, Cameron moved back in with their mom, Christine, who has lived in the same home since Cameron was in middle school. Despite sleeping in the same bedroom every night, she still hasn’t fully “moved in.”

“There’s no paintings up or anything,” Cameron says. “Why would I settle?”

As the youngest, just 10 years old when the family lost their home, Cameron’s reluctance to decorate represents a deep fear that her housing could vanish in an instant.

Professional support is essential when a family faces such a crisis, and programs that offer mental health services alongside social gathering can address the unique challenges that rural Americans face. One such organization is Seek Healing, a nonprofit based in Asheville, North Carolina, serving urban and rural residents with free, in-person and online mental health support.

As one of the first organizations of its kind nationwide, Seek Healing provides an educational, community-based approach to mental health needs, trauma, substance use and isolation. Many more such organizations are needed nationwide, because the stigmatization of therapy in rural communities, combined with the lack of economic access, often make it impossible for parents to get the support they need, let alone help their children.

Gabrielle and Cameron are eight years apart, yet they agree on the ticking time bomb of their Dad’s mental instability and drinking, recalling how he’d spend hours at the neighborhood bar avoiding them. “This was always going to happen. There was always tension in the house. The dynamic was going to break somebody or something.”

It’s the same with my father. In the months before the foreclosure, he became increasingly paranoid, believing he was being trailed by authorities. He said to watch out for black cars, that our phones were tapped. I’ll never know the root of this behavior, because he’s never seen a mental health provider, and never will. I know that after we lost our house, his deteriorating mental health accelerated his alcohol use and emotional abuse, eventually leading to our estrangement.

Our stories mirror research: Rural children are more likely than their urban peers to have a parent in poor mental health. Rural residents have higher rates of substance use, depression and anxiety disorders, yet they must often travel long distances—at great financial and emotional cost—for mental health care. When they manage to overcome these barriers, rural housing insecurity and mental health challenges are worsened by a bootstrapping mentality and social stigma that shame people for seeking help, even when they desperately need it.

“People say, ‘I don’t even want to go to mental health treatment because I don’t want people to see me walking in,’ ” says Amy M. Magnus, an Associate Professor in the Department of Political Science and Criminal Justice at California State University, Chico.

Magnus’s research explores rural mental health and its intersections with basic needs, such as housing. “Often, the people who were really struggling were being left behind in their own communities.”

It’s problematic that stigma muddles the path to mental support for rural people, because housing insecurity is linked to a higher risk of depression, anxiety, psychological distress and suicide. These effects are persistent, too: People who experience eviction are more likely to report poor mental health eight years after the event.  

The Great Recession’s impact on credit scores, financial assets and savings is well-documented, as are its links to increased financial and housing instability. However, fewer studies explore the social and emotional effects of the downturn, in part because it’s difficult to track people who became displaced via foreclosure, with most families moving at least once to a new zip code. As of 2021, only a quarter of the more than six million people who experienced foreclosure in the Great Recession regained home ownership, suggesting that a significant number remain displaced, or at least, housing insecure.

State and federal grant funding has provided a lifeline for rural people facing foreclosure, eviction and homelessness; however, the Trump administration’s proposed cuts to the Department of Housing and Urban Development (HUD) threaten fundamental programs combating housing insecurity and its negative mental health consequences. On July 13, the House Committee on Appropriations released their draft fiscal year 2026 Transportation, Housing and Urban Development spending bill, which sets annual funding for HUD and the Department of Transportation. The House’s proposal would cut HUD funding by nearly $1 billion, with a 26% reduction in staff and a 66% decrease in fair housing programs. The bill also includes language that would give the Trump administration broad authority to change key requirements for rental assistance and public housing, opening the door to time limits, work requirements and higher rent burdens for low-income families, according to housing advocacy organizations like Housing Action Illinois.

The White House’s own 2026 discretionary budget called for the elimination of single-family housing direct loans, self-help housing grants and rural housing vouchers, as well as a $721 million cut to the United States Department of Agriculture’s (USDA) office of rural development. USDA Rural Development has numerous local centers where rural people can learn about and access the Section 502 lending program, which requires a 0% down payment and allows an extended mortgage of 38 years, making payments more affordable.

The Section 502 lending program has had a positive impact everywhere it’s been implemented. Between 2012 and 2019, it helped 368,000 Black households achieve home ownership, directly combating discriminatory lending policies. The program also tends to make a mortgage payment cheaper than rent, which reduces the amount of monthly income that goes to housing. Increased home ownership helps rural communities by driving up neighborhood home value, increasing quality of life and fostering economic prosperity for future generations.

According to Sharon Cornelissen, Director of Housing for the Consumer Federation of America, the proposed cuts could force rural families to relive their recession tragedies.

“There’s going to be a bunch of people that went through 2008 that will have to go through this crisis again,” Cornelissen says. “They lost their home before, maybe had a bankruptcy on their credit records for seven years, and they’re finally in a place where they have recovered. It’s the same populations again that are vulnerable.”

Cornelissen, who was born in the Netherlands and now lives in Washington D.C., adds that this could be an especially hard blow to people who held onto the American Dream during the last financial crisis. “It’s such a deep value and belief—that upward mobility is possible if you just try hard enough. I think that keeps a lot of people going.”

Whether we eventually find the good fortune we seek or the well remains dry doesn’t change the fact that many of those who suffered during the Great Recession continue to struggle. When I look at my family scattered across the country—my mother barely getting by on disability in Florida, my brother in rehab for opioid use disorder, my father drinking his pain away in Western North Carolina with no running water, my sister in Colorado, ensnared by anxiety over falling back into poverty, and myself, still battling the depression that gripped me as a homeless teen—I can’t be sure if any of us will ever overcome the trauma of foreclosure, because every story about a lost home is a story about lost humanity.

Here’s what I do know: Our experiences demonstrate the resilience of rural people, destigmatize asking for help and shed light on what so many of us stand to lose. I may have lost my home, but by telling my story, I’ve learned exactly where I belong.

Michelle PolizziMore by this author →

Michelle Polizzi is an essayist and journalist whose work has appeared in HuffPost, Slate, Insider, Parade, and Healthline, among other publications. Her work explores class, society, healing and the intersections between.