Lender Guide
Federal Guarantees for Rural Home Loans

Our home loan guarantees help private lenders safely increase their investment in mortgages for income-eligible families or individuals buying or building a home in a qualified rural area. Last year in Pennsylvania over 75 lenders participated in the program, providing sound mortgages to more than 4,200 homebuyers in rural Pennsylvania.

Download a printable Quick Reference Guide

How much is a federal guarantee?

    90% of the principal amount of the loan.

  • Does the borrower qualify for a home loan guarantee?

  • Borrower eligibility for a Rural Development Home Loan Gurantee is based on a number of factors including family size, income, and the location of the property. Family Income Limits vary by county. For details on how lenders calculate a borrowers repayment income, contact us at 717-237-2186 or at pagrh@pa.usda.gov

  • Does the home qualify?

  • Use our online Address Search to find out if the property to be purchased is in an eligible rural area.
    Loans guaranteed by USDA may be used to buy or build a single family residence, including the cost of land. Land value may not exceed 30% of the total property value.

  • Is there a set maximum loan amount?

    No. A borrower's maximum loan amount is determined by their ability to repay the loan. Closing costs may be included in the loan (no discount points). Appraised value may be exceeded by the amount of the guarantee fee, up to 102% LTV.

  • Are there benefits for the borrower?

  • Yes. No down payment required. 29% PITI. PITI plus all other monthly debts may be up to 41% of Repayment Income (waivers allowed). Low guarantee fee of 2%. Low refinance fee of 1.5%. Guarantee fee may be included in the loan as long as LTV does not exceed 102% of appraised value.

  • How do I become an approved lender?

    For approval in Pennsylvania, the Lender Agreement and documentation outlined in the Lender Approval Checklist may be sent directly to: pagrh@pa.usda.gov.
    For nationwide or multi-state approval, send the Lender Agreement and documentation to the RD National Office.

  • How much paperwork is involved?

    The application process may be completed online using a lender's standard forms and the Guaranteed Underwriting System (GUS), free for approved lenders. For details contact pagrh@pa.usda.gov or call 717-237-2186.
    Credit scores of 640 or higher merit streamlined credit documentation.

  • Is there a deadline to apply?

    No. Home Loan Guarantee commitments are made year round.

  • Why does Rural Development make home loan guarantees?

    Home Ownership Strengthens Communities. A good home is more than just a roof overhead. Homes are the cornerstone of our communities. They help families achieve economic stability and build savings over time that can help meet needs like education and retirement. Rural Development programs ensure Americans living in rural areas have access to affordable, well-built homes near jobs, schools, healthcare and public services.

  • Contact our Guaranteed Rural Housing Staff at 717-237-2186 or pagrh@pa.usda.gov