Rural Housing Loans

Managing AgencyU.S. Department of Agriculturehttp://www.usda.gov/ 
Program Description
Direct and guaranteed loans may be used to buy, build, or improve the applicant's permanent residence. New manufactured homes may be financed when they are on a permanent site, purchased from an approved dealer or contractor, and meet certain other requirements. Under very limited circumstances, homes may be re-financed with direct loans. Dwellings financed must be modest, decent, safe, and sanitary. The value of a home financed with a direct loan may not exceed the area limit. Assistance is available in the States, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of Northern Mariana's, and the Trust Territories of the Pacific Islands. Direct loans are made at the interest rate specified in RD Instruction 440.1, Exhibit B (available at http://www.rurdev.usda.gov/SupportDocuments/04401.pdf or in any Rural Development local office).
General Program Requirements
In order to qualify for this benefit program, your property must be located in an eligible rural area. Aplicants must have very low-, low- or moderate incomes. Very low-income is defined as below 50 percent of the area median income (AMI); low-income is between 50 and 80 percent of AMI; moderate income is below 115 percent of AMI. Families must be without adequate housing, but able to afford the housing payments, including principal, interest, taxes, and insurance (PITI). Qualifying repayment ratios are 29 percent for PITI to 41 percent for total debt. In addition, applicants must be unable to obtain credit elsewhere, yet have an acceptable credit history. You must also be a U.S. citizen or permanent resident.
Loan Terms
Direct loans are repaid over 33 years or 38 years for applicants whose adjusted annual income does not exceed 60 percent of the area median income, if necessary to show repayment ability. Payment assistance is granted on direct loans to reduce the installment to an "effective interest rate" as low as one percent, depending on adjusted family income. Payment assistance is subject to recapture by the government when the customer no longer resides in the dwelling. There is no funding provided for deferred mortgage authority or loans for deferred mortgage assumptions.

Guaranteed loans are amortized over 30 years.

Your Next Steps
The following information will lead you to the next steps to apply for this benefit.
Application Process
Interested applicants should contact their local USDA Rural Development field office for more information. To obtain contact information for the field office nearest you, visit: http://offices.sc.egov.usda.gov/locator/app
Program Contact Information
For more information about the Guaranteed Loan program, visit:
http://www.rurdev.usda.gov/rhs/

For more information about the Direct Loan program, visit:
http://www.rurdev.usda.gov/rhs/

More on Rural Development Housing & Community Facilities Programs at:
http://www.rurdev.usda.gov/rhs/common/program_info.htm#SFH
All applications for loans and grants are handled at the local level. For help with an application, contact your Rural Development office at:202-720-4323