In rural areas, financing a home can be difficult. There often aren’t as many lenders serving rural locations as there are in more densely populated parts of the country. Also, some rural lenders may require a larger down payment or a higher interest rate to secure a loan. Fortunately, USDA Rural Development partners with more than 3,000 housing lenders to make sure low- and moderate-income rural families have a chance to enter the housing market.
Through the Section 502 Guaranteed Housing Loan Program, USDA Rural Development backs loans made by approved lenders for the purchase, refinance, renovation, or repair of an owner-occupied residence. The USDA guarantee allows lenders to provide 100-percent financing on a safe, low-interest, 30-year mortgage.
To qualify for the program, the home must be located in an eligible rural area and be modest in size and design. In addition, the homebuyer must have a reasonable credit history and an income of no more than 115 percent of the median income for the area.
If the USDA Guaranteed Housing Loan sounds like it might be right for you, contact your lender to see if they participate, or contact a local USDA Single Family Housing Guaranteed Loan Coordinator.