Borrowers in rural areas have easier access to affordable housing, due to partnerships with the Rural Housing Service on its Section 502 Guaranteed Rural Housing Loan and its Rural Direct Leveraging Loan. The loans are backed by the Rural Housing Service, a division of the U.S. Department of Agriculture.
To learn more: Contact the nearest RHS office for information on qualified areas within your state and names of participating lenders. The RHS Web site may also provide additional information.
Advantages:
- No down payment is required for low- and moderate-income buyers.
- Affordable monthly mortgage payments.
- Often times, below market interest rates are offered on the Rural Direct Leveraging Loan.
- No cash reserves required in your savings account when you go to closing.
- You need less cash up-front than you would for FHA loans.
Details:
The borrower’s income is limited to 115 percent of the area median income for the guaranteed loan and 80 percent of the adjusted median income for the Direct Leveraging Loan.
Single-family, non-farm, owner-occupied principal residences, including new manufactured housing units, are eligible.
Eligibility is limited to rural areas, which generally have a population no more than 10,000. In areas far from major metropolitan cities, the town population limit (where the property is located) may be as high as 20,000.
