Guaranteed Housing Loans
Eligibility: Applicants for loans may have an income of up to 115%
of the median income for the area. Families must be without adequate housing, but be able to afford the
mortgage payments, including taxes and insurance. In addition, applicants
must have reasonable credit histories.
Approved lenders under the Single Family Housing Guaranteed Loan program include:
Any State housing agency; Lenders approved by: HUD for submission of applications for
Federal Housing Mortgage Insurance or as an issuer of Ginnie Mae mortgage backed
securities; the U.S. Veterans Administration as a qualified mortgagee; Fannie Mae for
participation in family mortgage loans; Freddie Mac for participation in family mortgage
loans; Any FCS (Farm Credit System) institution with direct lending authority; Any lender
participating in other USDA Rural Development and/or Farm Service Agency guaranteed loan
Terms: Loans are for 30 years. The promissory note interest rate is set by the lender.
There is no required down payment. The lender must also determine repayment feasibility, using
ratios of repayment (gross) income to PITI and to total family debt.
Standards: Under the Section 502 program, housing must be modest in size, design, and cost.
Houses constructed, purchased, or rehabilitated must meet the voluntary national model building
code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be
permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and
HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is
already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly
secured by an HCFP direct or guaranteed loan.
Basic Instruction: 7 CFR Part 1980
For more information about this program, or to file an application, contact the local
Rural Development office in your area.
Additional Information about the Guaranteed Loan Program