USDA Rural Development Loans

Families and individuals living in rural areas may be eligible to become homeowners with the help of a little known program:  the U.S. Department of Agriculture (USDA) Rural Development Guaranteed Home Loan.

The USDA offers a variety of programs to help low to moderate-income individuals living in small towns or rural areas achieve homeownership. And you might be surprised at what's considered Rural!

The Rural Housing Service (RHS) helps qualifying applicants who typically cannot obtain credit from other sources to purchase modestly priced homes as their primary residence. Through the USDA Home Loan program, low and moderate income people can qualify for mortgages - even without a down-payment.

USDA Rural Development Home Loans are an attractive option because:

• No down payment - you can finance up to 100% of the purchase price
• There are minimal closing costs
• There are no monthly mortgage insurance premiums
• They can be used to purchase a new or an existing home
• They can be used toward the purchase and renovation of a previously owned home

To be eligible, you must:

• Have an adequate and dependable income. You must be able to fully document your income and assets.
• Be a U.S. citizen or be legally admitted to the United States as a permanent residence.
• Have an adjusted annual household income that does not exceed the published limits for the county in which you purchase. Income includes the total gross income of the applicant, co-applicant, and any other adult in the household. It excludes certain expenses and adjustments. A large family will qualify for more home than a single person.
• Have a credit history that indicates a reasonable willingness to meet obligations as they become due. Past payment history is less important then current and future ability to pay your debt obligations.

Homes that qualify under the USDA Rural Development Loan Program:

• New and existing homes, including some manufactured homes.
• No restrictions exist on the size or design of the dwelling financed, but must be considered "modest."
• Must be a residence, not a farm.
• Must be located in a rural area. Rural areas include open country and places with a population of 10,000 or less. Under certain conditions, towns and cities with less than 20,000 population may qualify.
• Plumbing, heating, water, waste disposal, and electricity must be certified as adequate, and the dwelling must be free from termites and dry rot. In some cases you can even finance any necessary repairs.
• Homes with in-ground swimming pools are prohibited, but above ground pools are acceptable.

Go to USDA Rural Development Home Loans to learn.
 

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