Guaranteed Loan Program

A guaranteed loan secured by Rural Development is made by an approved mortgage lender to a borrower who is unable to qualify fully for a conventional loan. View a list of Rural Development Area/Sub-Area Offices and service areas.

Rural Development provides guarantees in rural areas. View a list of New Jersey's eligible areas -- this is a 9 Kb PDF file or determine property eligibility.

The guaranteed program authority provides Rural Development with another tool to serve low and moderate income applicants in eligible rural areas. Income limits are statutory. View the Guaranteed Loan Income Limits for New Jersey (PDF file) determine income limit eligibility.

The Guaranteed Housing Program may be used to buy new or existing homes and related facilities and approved existing condominium units. Houses may be built on individual tracts or in subdivisions.

An applicant must:

• Have a satisfactory credit history.
• Have adequate and dependable income that conforms to established Agency limits and regulations.
• Possess the legal capacity to enter into a loan obligation.
• Qualify for loan eligibility with a debt to income ratio of 29 percent (PITI) and 41 percent (MOTI) respectively. Flexibility in ratios can be granted if you qualify.
• To find out how much you qualify for use our Mortgage Calculator.

Loan rates are negotiated between the applicant and lender. However, loan repayment terms cannot exceed 30 years (No ARM's). There are no monthly Private Mortgage Insurance (PMI) premiums.

The lender pays Rural Development a guarantee fee.

The amount of the loan may not exceed the maximum dollar limits established by Investors. (Fannie Mae, Freddie Mac, HUD/FHA, VA, etc).

Rural Development allows loans of up to the lesser amount of 100 percent of the market value of the dwelling or 102 percent of the acquisition costs including the guarantee fee and customary closing costs.

Approved lenders process an d submit loan applications to Rural Development. Rural Development will evaluate the application and respond to the lender within 48 hours with a final determination on the loan proposal.

Guaranteed Rural Housing Loan Processing Forms. RD1980-86, RD1980-21, AD1048, RD1924-25

Guaranteed Rural Housing Loan Closing Forms. RD1980-19, RD1980-11, RD1980-17