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This loan program is administered by the Rural Housing Service
(RHS), an
agency within the Rural Development mission area of the U.S. Department of
Agriculture.
More rural families and individuals may be eligible to become homeowners with
the help of a U.S. Department of Agriculture (USDA) / Rural Housing Service
guaranteed loan. Sometimes good credit and a steady income are not enough
to qualify at a commercial lending institution like a bank or savings and loan. A sizeable down payment may also be required. When the Federal Government
agrees to guarantee a loan, lending institutions can help buyers while incurring
less risk.
Through the Guaranteed Rural Housing Loan Program,
moderate-income people can qualify for mortgages even a down payment.
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Highlights of the USDA Guaranteed Rural Housing Loan Program
- Home buyers make application with participating lenders
- Buyers must personally occupy the swelling following the
purchase
- Mortgages are 30 year fixed rate at market interest
rates
- Loans may be up to 100 percent of market value or for the
acquisition cost whichever is less
- Loans may include closing costs, guarantee fee, legal fees,
title services, cost of establishing an escrow account, and other prepaid
items provided the appraised value is higher that sales price. Buyers
are responsible for any other fees or related costs (discount points)
required by the lender or not covered by the appraised value
- A one time guarantee fee of 1 percent of the loan amount is
charges to the lender, but may be passed on to the applicant
- There is no limit on the sellers contribution to closing
costs
- Guaranteed loans are subject to the provisions of the
Civil Rights statutes, including the Equal Opportunity Act.
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Guaranteed Rural Housing Loans |
Homes That Qualify: |
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To be eligible, applicants must:
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Guaranteed loans can be made on either new or existing
homes. |
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Existing homes must be structurally sound,
functionally
adequate, and in good repair |
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There are no restrictions on the size or design of the home
financed |
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The home must not be used for income producing
purposes |
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Typical amenities, except in-ground swimming pools, are
allowed |
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Homes must be located in rural areas. Rural areas
include open country and places with a population of 10,000 or less and,
under certain conditions, towns and cities with between 10,000 and 25,000
residents. USDA Rural Development field offices can determine eligible
areas. |
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Have an adequate and dependable
income |
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Be a U.S. citizen or be
legally admitted to the United States for permanent
residence |
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Have an adjusted annual
household income that does not exceed the moderate income
limit without a down payment established for the area. A family's income
includes the total gross income of the applicant,
co-applicant, and any other adults in the household.
Applicants may be eligible to make certain adjustments to
gross income, such as annual child care expense, and $480 for
each minor child, in order to quality. USDA Rural
Development field offices can provide the moderate income
limits for the areas that fall within their jurisdiction, an
can provide further guidance on calculating household income |
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Have a credit history that
indicates a reasonable willingness to meet obligations as they
become due |
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Have repayment ability based on
the following ratios |
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Principal, Interest, Taxes and Insurance (PITI)
divided by gross monthly income, must be equal to or less than 29 percent.
Total debt (TD) divided by gross monthly income must be equal to or less
than 41 percent.
5319 Broadway ·
Knoxville, Tennessee
(865) 687-8200
Send mail to
financef@bellsouth.net
with questions
or comments about this web site.
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Copyright © 2008 Fountain City Finance
Knoxville
Tennessee Website Design |
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