USDA Rural Home Loan Program Helps Low Income Families with Affordable Housing

Many rural households across America are economically challenged, mainly because they are not in close enough proximity to good paying job opportunities. 

As more individuals and families are forced to move to big cities for employment, fewer people are left to continue the farming business and commercial activity in these rural farming communities.

The United States Department of Agriculture (USDA) is the biggest advocate and supporter of rural development in America and offers the Rural Home Loan Program to help low income individuals and families purchase affordable housing.

The USDA also offers financial assistance to low income homeowners in specific rural areas for needed repairs and renovations on their existing home under their Home Repair and Grant Program. 

A Few Facts About the USDA Rural Home Loan Program

• The USDA Loan Program is specifically designed for low income families in certain rural communities.
• Loan money comes from the government. Third party lenders such as banks and mortgage loan companies must be approved by the USDA to loan money backed by the government. The USDA assures and guarantees that should a borrower default on a loan the USDA will repay the lender, which allows them to offer the lowest rates possible.
• Flexible guidelines allow borrowers to qualify for a USDA home loan even if their credit is less than perfect.
• Under the USDA home loan program, qualified individuals and families can borrow up to 100% of the value of a home, including closing costs. They are not required to put any money down.  
• Since mortgage insurance isnt’ required by the borrower, more money can go towards the monthly mortgage payment.
• Qualified individuals and families can get a loan to purchase a pre-existing home for sale or land to construct their own home. Restrictions may apply regarding the builder and the length of time it takes to finish construction of the home.   
• Household income determines how much of a loan applicants can afford. 26% of household income can be used towards the monthly mortgage payment.
• Home loan terms can be stretched up to 38 years if household income is so low that monthly payments would not be affordable otherwise.
• There is no maximum purchase price limit under the USDA Rural Home Loan Program. 
• The promissory note interest rate on a USDA home loan is set by the lender.

Qualifying for a USDA Home Loan

Under the Rural Home Loan Program, applicants must meet certain criteria, including:

• Applicants can not already own a home or dwelling.
• Applicants must plan to live in the home to be purchased as their permanent residence.
• Applicants must provide sufficient verification of low income.
• Applicants must not be able to qualify for a conventional home mortgage.
• Applicants must provide a credit history that shows a ‘willingness’ to meet loan repayment obligations.   

Individuals and families interested in a USDA Home Loan should contact a Rural Development office in their area. 

For a list of offices in North Carolina, please visit North Carolina Area Office Information.

Charlotte NC Real Estate Homes for Sale

If you’re looking to buy a home in the Charlotte area, you need the expertise of Leigh Brown on your team. Leigh understands how the USDA Rural Home Loan Program works and has walked many individuals and families through the buying process. 

You can reach Leigh by filling out her online contact form or by calling her at (704) 688-5005 or toll free at (866) 440-7136. 

Sources: 
USDA Rural Development
Real Estate About.com
USDA Loan Programs