USDA Rural Development

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USDA Rural Development

The U.S. Department of Agriculture, Rural Development’s Rural Housing Service, also referred to as Housing and Community Facilities Programs (HCFP), is celebrating its National Homeownership Month this June:

USDA, through its Rural Development mission area, administers and manages more than 40 housing, business and community infrastructure, and facility programs through a network of 6,100 employees located in the nation’s capital and 500 state and local offices. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America. Rural Development has an existing portfolio of more than $134 billion in loans and loan guarantees. (May 28, 2010)

USDA Rural Development (RD) provides Direct loans (USDA is the lender–for lower-income applicants), Guaranteed loans (a bank is your lender and your loan is insured by the USDA, like FHA loans–for low- to mid-income applicants), and other support for single family housing. In addition to single family residential (SFR) property programs, RD has programs for multi-family housing and community facilities.

RD loans are a great financing choice:

  • No required down payment
  • Competitive, tiered interest rates (i.e. if you have a credit score better than “X” you get rate “Y”)
  • Supports the desirability and affordability of rural communities

At the time of this blog posting, RD has already run out of funding for the Guaranteed loan program for 2010, although they still have funds remaining in the Direct loan program. A certain amount of funding is allocated for each calendar year. Sometimes, RD runs out before the end of the year. When RD runs out of funding, sometimes the funding is increased and the program is able to continue helping. This year (2010), RD’s Guaranteed loan program ran out of money after the first couple months and did not get additional funding (yet… we’ll see…). RD posts its Notice of Funds Availability (NOFA) so you can stay informed.

USDA’s Rural Development site has several great resources:

For reference, as of June 2, 2010, the Guaranteed loan income limits for the Tulsa area were:

  • 1-4 person households:
    • Maximum allowable income to qualify as “Low Income” = $47,450
    • Maximum allowable income to qualify as “Mid Income” = $62,650
  • 5-8 person households:
    • Maximum allowable income to qualify as “Low Income” = $74,050
    • Maximum allowable income to qualify as “Mid Income” = $97,750
The income limits for the Direct loan program are more complicated, along with the types of benefits available to low-income individuals and families. Working with a reputable lender will provide you with a broad scope of borrowing options.

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