|Rural Housing Service (RHS) was created in 1994 as a result of the Department of Agriculture Reorganization Act to meet housing and community development needs of rural America.
More rural families and individuals may be able to become homeowners with the help of the Rural Housing Service Programs. The USDA Rural Housing Service has various programs available to aid low- to moderate-income rural residents to purchase, construct, repair, or relocate a dwelling and related facilities. USDA rural housing
loan programs allow qualified homebuyers to get loans with minimal closing costs and no downpayment.
Section 502 Rural Housing Guaranteed Loan Program
Under the Guaranteed Loan program, the Rural Housing Service guarantees loans made by private sector lenders. A loan guarantee through RHS means that, should the individual borrower default on the loan, RHS will pay the private financier for the loan.
The purpose of this loan program is to enable eligible low- and moderate-income (up to 115 percent of the Area Median Family Income) rural residents to acquire modestly priced housing for their own use as a primary residence. The program is available for the
purchase and repair of existing and newly constructed dwelling.
There is no required down payment, but families must be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must be without adequate housing and be unable to obtain credit elsewhere, yet have acceptable credit histories.
Loans are made for up to 30 years. To determine eligibility or to apply for a loan, contact any RHS approved lender or your Rural Development State Office.
For more details about this program, click here.
Section 502 Single Family Housing Direct Loan Program
Under the Direct Loan program, individuals or families receive direct financial assistance directly from the Rural Housing Service in the form of a home loan at an affordable interest rate. These loans may be made to eligible applicants to buy, build, repair, renovate, or relocate homes, to provide related facilities, or to
refinance home debts under certain conditions.
Applicants for direct loans from RHS must have very low or low incomes. Very low income is defined as below 50 percent of the Area Median Income (AMI); low income is between 50 and 80 percent of AMI. There is no required down payment, but families must be able to
afford the mortgage payments, including taxes and insurance. In addition, applicants must be without adequate housing and be unable to obtain credit elsewhere, yet have reasonable credit histories.
Loans are typically made for up to 33 years (38 for those with incomes below 60 percent of AMI and who cannot afford 33-year terms). To determine eligibility or to apply for a loan, contact your Rural Development State Office.
To learn more details about this program, click here.
Summary of RHS programs A brief description of various available RHS programs.
Mutual Self-Help Housing Program The program makes homes affordable by enabling future homeowners to work on homes themselves.
Home Repair Loan and Grant Program The program offers loans and grants for very low income families who own homes in need of repair.
Rural Development Multi-Family Housing program Information about loans to developers.
Frequently Asked Questions for RHS Borrowers
Detailed information and applications for financial assistance are available through local Rural Development offices: State-by State Rural Development Office Listings
Types of Mortgage Loans Review characteristics of all the basic loan programs available today.
Shopping For a Mortgage Information that will help you shop for a mortgage most effectively.
FY 1999 Area Median Family Income HUD data.