Single Family Housing Guaranteed Loan Program

You’re probably thinking “the beef people”?  Yes!  The USDA provides homeownership opportunities to rural Americans as well as programs for home renovation and repair.  See below for info on what is classified as “rural”.

Benefits of this plan include:

• No maximum purchase price (loan amount based on what you can qualify for)
• Can be used to purchase existing homes, newly-built homes, manufactured homes, as well as repairs
• No down payment required
• No monthly mortgage insurance like with FHA or conventional loans with less than 20% down.  This results in a lower monthly house payment.
• Typical closing costs and prepaids can be included in the loan up to the appraised value of the property
• Income limits can be adjusted based on factors such as number of children.  In other words, you may qualify even though you have a higher income because for the purposes of the loan, your income would be lowered based on a child deductions and daycare expenses.

Qualifications include:

• Applicants with a wide range of credit profiles
• Income-eligible applicants who do not qualify for conventional financing
• Families and individuals that don’t have minimal funds for a down payment and closing costs – including first-time and repeat homebuyers

Some requirements:

• Must be owner occupied after closing
• Income limits apply.  If your income is over a certain amount, you do not qualify.  Generally, this is $73,600 for a one to four family household and $97,150 for a five to eight person household.  These limits may vary by location though.
• Any licensed lender can make the loans but they must be submitted to the USDA Rural Development for approval

Rural areas include:

• Usually areas with populations of 10,000 or less
• Locations not closely associated with urban areas
• Sometimes can be cities/towns with populations between 10,000 and 25,000
• More areas than you realize may qualify.  For example, in Collin county, cities such as Anna, Farmersville, Melissa, Princeton, Prosper, and Wylie are currently eligible (subject to change based on populations).

For a map of eligible areas along with other eligibility requirements, go to http://eligibility.sc.egov.usda.gov

This page is to raise awareness about this program and may contain outdated information.  There may be additional requirements, restrictions, and consequences to this program not mentioned here.  If you’re interested in learning more about this program, contact us so we can help guide you.

More info and program details can be found on the USDA Rural Development web site.  Please consult with a tax professional and/or mortgage lender to determine if this program is right for you.

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