A Place to Live
Owning your own home is a part of the American dream, but in rural areas, financing a home can be difficult.  If you want to own a home in a rural area, the U.S. Department of Agriculture (USDA) Rural Development may be able to help.

USDA has been helping rural Americans become homeowners since 1949. It has invested well over $54 billion in helping people purchase or build their own home.

Guaranteed Rural Housing
The Guaranteed Rural Housing Program agrees to guarantee a loan so the lending institutions can help buyers while incurring less risk.

Program Highlights

• Moderate Income limits apply.
• No Down Payment Required
• No Prepayment Penalties
• No Private Mortgage Insurance required
• A one-time guarantee fee is paid at closing.  In some cases, this fee, closing costs and repairs may be included in the loan.
• Mortgages are 30 years.
• No maximum loan amount.
• No limits on cash contributions.
• Can purchase an existing home or build a new home.
• Home must be occupied as your permanent residence.

502 Direct Loan Program
The Direct Homeownership Loan Program allows individuals or families, who are unable to obtain a homeownership loan from conventional sources, to receive a loan directly from Rural Development.

Program Highlights

• Low Income limits apply.

• No Down Payment Required, unless family assets exceed specified amount.

• No Prepayment Penalties.

• No monthly Private Mortgage Insurance required.

• Mortgages are 33-38 years years at a fixed interest rate and payments are based on income level.

• Loan maximum -  property's appraised value.  Appraised value not to exceed the county maximum

• Closing costs and repairs may be included in the loan.

• No limits on cash contributions.

• Can purchase an existing home or build a new home.

• Home must be occupied as your permanent residence.

504 Home Repair Loan and Grant Programs
Rural Development makes loans for repairs to improve or modernize a home, make it accessible, make it safer or more sanitary, or to remove heath hazards.

Program Highlights

• Very Low income homeowners.

504 Loan

• No Down Payment Required.
• No Prepayment Penalties.
• Loans are up to 20 years and have a one percent interest rate. Maximum loan amount is $20,000.
• Value of home must be less than county loan limit.

504 Grant

• Must be at least 62 years of age and unable to repay a loan.
• Only used to remove health and safety concerns.
• Homeowners who receive a grant or combination grant and loan must agree not to sell or transfer the house on which the grant funds were used for up to three years.
• Lifetime grant maximum is $7,500.
• The value of your home must be less than the county loan limit

Mutual Self-Help Housing Programs
May rural families have achieved the American dream of homeownership through USDA's Mutual Self-Help Housing Program.

Self-Help works in combination with non-profit organizations and the direct single family lending programs, although other home financing sources can be used.  The non-profits help families become successful homeowners by providing technical assistance as families construct their homes.  This includes homeownership education, loan packaging, and construction supervision.

Your USDA Rural Development local office can tell you if a Self-Help Housing effort is operating in the area in which you wish to live.

How Do I Know If I Am Eligible For Rural Development's Programs?

• Have an adequate and dependable income that does not exceed the county limits.
• Be a U.S. Citizen or be legally admitted to the United States for permanent residence.
• Demonstrate adequate repayment ability.
• Have a good credit history that indicates a willingness to meet obligations when they become due.
• Contact your local office for more information.

 

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