Rural Housing Services(RHS) Loan Programs
Rural Housing Service(RHS) is part of the United Stated Department of
Agriculture(USDA) and has helped people finance their homes in rural
areas for over 50 years.
Housing and Community Facilities Programs
help rural communities and individuals by providing loans and grants for
housing and community facilities. They provide funding for
low-to-moderate-income single family homes, apartments for low-income
persons or the elderly, hospitals, housing for farm laborers, childcare
centers, nursing homes, schools, fire and police stations, libraries and
more.
The RHS has committed itself to helping expand rural minority
homeownership by:
- Lowering Fees To Reduce Barriers to Minority Homeownership
- Doubling the Number of Self-Help Participants By 2010
- Increasing Participation by Minority Lenders through Outreach
- Promoting Credit Counseling and Homeownership Education
- Monitoring Lending Activities to Insure 10 Percent Increase In
Minority Homeownership
Section 502 - Guaranteed Single-Family Loan Program
Loans are guaranteed by RHS and backed by the full faith and credit
of the U.S. government for 90% of the loan value.
Section 502(g) Requirements:
- Incomes of no more then 115% of the median income for the area.
- The family must be without current adequate housing, but still
be able to afford the mortgage payments, plus insurance and taxes.
- Borrowers must have reasonable credit histories.
- Primary residence only
Section 502(g) Advantages:
- Loans are made up to 100% of the appraised value(no down
payment).
- Terms are for 30 years, no less
- must include a fixed interest rate
Section 502 - Direct Single-Family Loan Program
Rural Housing Service Direct Loans are loans that are directly funded
by the U.S. Government.
Section 502(d) requirements:
- Only available to low-(50%-80% of area median income) or very
low-income(below 50% of area median incomes) households.
- Families must be without adequate housing, but still be able to
afford the mortgage payments, plus insurance and taxes.(payment
subsidy is available to applicants to enhance repayment ability)
- Borrowers must be unable to obtain a mortgage loan elsewhere,
yet have reasonable credit histories.
- Primary residence only
Section 502(d) advantages:
- Loans are made up to 100% of the appraised value(no down
payment).
- Loans are for up to 33 years (38 for those with incomes below 60
percent of the area median income and who cannot afford 33-year
terms).
- Interest rate is set by Housing and Community Facilities
Program(HCFP) based on the Government’s cost of money(equals a lower
than is available to the general public interest rate).
The RHS fee is 1% of the guaranteed portion of the loan and is paid by
the Lender of Record, or may be passed on to the borrower.
Section 502 loans are, for the most part ,used to help persons with
low-incomes purchase homes in rural areas. Funds can be used to relocate
a home, renovate, repair, build or to purchase and prepare sites,
including providing water and sewage facilities.
For information on whether your area or property is eligible click
here
For the location of your nearest RHS office click
here.
For area income limits for your area click
here
Below are links to RHS programs not covered
Single-family programs:
Multi-Family Programs:
Community programs: