Guaranteed Rural Housing Loans
Rural Development - Ohio has been a leader nationally in utilizing the
Guaranteed Rural Housing program. Since 1991, we have helped more than
32,000 families join the ranks of homeowners.
Potential home owners, Realtors, builders and applicants can all benefit
from the Guaranteed Rural Housing program. The combination of NO
DOWN PAYMENT required and NO MORTGAGE INSURANCE needed with competitive
30 year fixed rates makes the Guaranteed Rural Housing program an attractive
source of financing.
To be considered eligible for a Guaranteed Rural Housing
Loan, applicants must:
Homes That Qualify:
Have an adequate and dependable income;
Be a U.S. citizen, qualified alien, or be legally admitted to the United
States for permanent residence;
Have an adjusted annual household income that does not exceed the moderate
income limit established for the area. A family's income includes
the total gross income of the applicant, co-applicant and any other adults
in the household. Applicants may be eligible to make certain adjustments
to gross income - such as annual child care expenses and $480 for each
minor child - in order to qualify. USDA Rural Development field offices
can provide information on the moderate income limits for the areas that
fall within their jurisdiction, and can provide further guidance on calculating
household income. There is an automated income eligibility calculator
available at: http://eligibility.sc.egov.usda.gov.
Have a credit history that indicates a reasonable willingness to meet obligations
as they become due;
Have repayment ability based on the following ratios: Principle,
Interest, Taxes, and Insurance (PITI) divided by gross monthly income must
be equal to or less than 29 percent. Total debt divided by gross
monthly income must be equal to, or less than, 41 percent.
Highlights of the USDA Guaranteed Rural Housing Loan Program:
Guaranteed loans can be made on either new or existing homes;
Existing homes must be structurally sound, functionally adequate, and in
There are no restrictions on the size or design of the home financed;
The home must not be used for income-producing purposes;
Homes must be located in rural areas. Rural areas include open country
and places with a population of 10,000 or less and - under certain conditions
- towns and cities with between 10,000 and 25,000 residents. USDA
Rural Development field offices can determine eligible areas. There
is an automated rural area eligibility calculator at: http://eligibility.sc.egov.usda.gov.
Loans may be for up to 100 percent of the appraised value plus the up-front
Mortgages are 30-year fixed rate at market interest rates;
Loans may include funds for closing costs, the guarantee fee, legal fees,
title services, cost of establishing an escrow account and other pre-paid
items, if the appraised value is higher than sales price;
Sellers may contribute to the buyer's closing costs;
Home buyers make application with participating lenders;
Buyers must personally occupy the dwelling following the purchase;
Loans may be made to refinance either existing USDA Rural Development Guaranteed
housing loans or our Section 502 Direct housing loans;
There is an up-front guarantee fee of two percent for purchase loans or one
percent for refinance loans, and a 0.3 percent annual fee based on the average
scheduled unpaid principal balance of the loan.
Closed loans have secondary market acceptability, including Freddie Mac,
Fannie Mae, Ginnie Mae pools, and many state housing finance agencies;
Guaranteed loans are subject to the provisions of the Civil Rights statutes,
including the Equal Credit Opportunity Act.
For assistance with any of the topics outlined on this page,
additional training needs, or finding an approved lender in your area,
please contact any member of the Ohio Rural Development Guaranteed
Rural Housing Staff.
Please send any comments or suggestions to: