USDA Rural Development Home Loan Guarantee Program

 General

•  29% PITI, 41% TD ratios (waivers allowed)
•  Debts with 6 months or more owed will be counted
•  Property must be located in eligible rural areas
•  Land value cannot exceed 30% of total value
•  No in-ground swimming pools
•  No substandard homes
•  No existing manufactured homes
•  CAVIRS number(s) required

-Eligibility

•  First time homebuyer not a requirement
•  Income must be within limits
•  Income must be adequate and dependable
•  Adequate ability to repay the loan (history)
•  Acceptable credit history
•  Cannot obtain conventional financing
•  Citizen or permanent legal resident
•  Owner occupied
•  Legal capacity to incur debt
•  Bankruptcy OK if discharged for 36 months

 Income Eligibility

•  All household income counted
•  Overtime, bonuses and commissions count, if supported by history
•  Child support counts - 12 month history needed
•  Self-employment (use IRS net income) 2 year history plus current info
•  Same job or line of work for past 24 months
•  Degree or certification can substitute for job time
•  All income verified including wages, social security, public assistance etc

 Gross Income Deductions

•  $480 annually for each child under 18
•  Over 18 counts if full time student living at home
•  Actual child care expenses for children under 12 if parents work/school
•  $400 annually for applicant or co-applicant if handicapped or elderly
•  Medical deductions may be considered for handicapped or elderly

 Key Points

•  No PMI or MIP
•  Terms - 30 years
•  Guarantee fee 2% of loan amount
•  Refinance fee 0.5% of loan amount
•  Appraised values can be exceeded by amount of
•   guarantee fee - up to 102% LTV
•  Streamlined credit documentation with FICO score of 620 or higher

 Loan Purposes

•  Purchase new or existing home
•  Pay closing costs for loan (no discount points)
•  Pay pre-paid insurance
•  Pay necessary repairs
•  Purchase land and construct new dwelling

 Existing Dwellings

•  Satisfactory appraisal
•  Well test
•  Septic system certification
•  Termite letter

 New Construction

•  Satisfactory appraisal
•  Thermal certification
•  Plan certification
•  One year warranty on footings, framing and final inspection.
•  Or 10 year warranty on final inspection
•  Termite treatment certificate
•  Well test
•  Septic system certification
•  New manufactured home financing possible (call for details)

 Ineligible Area Maps  

  USDA Property Eligibility 

Single Family Housing Income Eligibility

APPLY FOR A RURAL DEVELOPMENT LOAN NOW