USDA Guaranteed Rural Home Loans

These loans are available for low-to-moderate income households to obtain homeownership. Applicants may obtain 100% financing to purchase an existing or newly constructed dwellings located in rural areas. Qualifying is based on the household’s adjusted income.

Eligibility: Applicants must have income below 115% percent of the area median income (AMI). Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically up to 29% of an applicant’s income. Applicants must have reasonable credit histories with total debt including the house payment up to 41% of an applicant’s income:

1-4 person household income limit: $74,050
5-8 person household income limit: $97,750

Terms: Loans are for 30 years and the Note interest rate is set by HCFP based on the Government’s cost of money.

Standards: Housing must be modest in size, design and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features (pools not allowed).

Approval: Once the loan is approved by your lender, Rural Development officials make a final decision within 2 days of the Rural Development office’s receipt of the application.

Here are some additional basic points for consideration:

Property must be in an eligible area. Check out any property at http://eligibility.sc.egov.usda.gov/eligibility/
Minimum FICO score of 620 required
No homes with private roads or that reside in “flood zones” allowed
No “first time” homebuyer requirements
Up-Front Mortgage Insurance only (no monthly required)
Past bankruptcy and/or Foreclosures must be at least 3 years old
Buyer cannot be “ineligible” from any Government transactions due to things such as, but not limited to: tax liens, judgments, civil/criminal convictions/
$417,000 maximum purchase price with no down payment required
Primary residences only
Seller can contribute up to 6% of purchase price towards buyer’s closing costs.
Buyer cannot own an existing home (unless it is deemed inadequate).