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.


Common Questions

How much is the 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 Guarantee is based on a number of factors including things like family size, income, and the location of the property. Family Income Limits vary by county. Borrowers must be U.S. citizens or permanent legal residents.

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 103.5% LTV.

Are their 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 3.5%. Low refinance fee of 1%. Guarantee fee may be included in the loan as long as LTV does not exceed 103.5% of appraised value.

How do I become an approved lender?
For approval in Virginia, the Lender Agreement and documentation outlined in the Lender Approval Checklist may be sent directly to Brenda Johnston at 804-287-1592 or brenda.johnston@va.usda.gov. For nationwide or multi-state approval, send the Lender Agreement and documentation to the RD National Office. Contact information is contained in the Lender Approval Checklist.

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 Brenda Johnston at 804-287-1592 or brenda.johnston@va.usda.gov.

How long does approval usually take?
Home loan guarantee applications are processed in the order received. Depending on the time of the month, approval typically takes three-four business days depending on the volume of applications received. Status updates are available by dialing the Guaranteed Single Family Hotline (GSFH) 804-287-1598.

Does Rural Development set the terms?
Yes and No. The loan term is set at 30 years. Interest rate and other terms are determined by the lender and buyer.

Is there a deadline to apply?
RHS electronic services for loan status and default status reporting. available. Applications are processed in the order received.

Guaranteed Lenders/Partners
RHS electronic services for loan status and default status reporting.


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.