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.
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
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
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
email@example.com. 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
Guaranteed Underwriting System (GUS), free for approved lenders. For details
contact Brenda Johnston at 804-287-1592 or
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)
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.
RHS electronic services for
loan status and default status reporting.
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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.