Rural Development

Guaranteed Housing

Frequently Asked Questions (Lenders)

Q.      What is the maximum loan amount?

A.      None. However, it is limited by the appraised value and repayment ability.

Q.      What is the maximum LTV?

A.      It can be up to 100% LTV plus the Agency guarantee fee.

Q.      Are alternate documents allowed for verifying income?

A.      Yes, refer to the Administrative Notice on this topic.

Q.      How much time should we allow for the Rural Development review process?

A.      Upon receipt of a complete loan package, allow 24 to 48 hours for the Rural Development review.

Q.      Do we need explanations for adverse credit?

A.      If the primary applicant’s middle score is 620 or higher, explanations are not necessary.

Q.      What if the applicant has no credit score?

A.      Alternate documentation of credit history is acceptable.

Q.      Is there a minimum credit score required?

A.      No.  However, underwriting lenders are responsible for determining the creditworthiness in accordance with Agency guidelines.

Q.      Can closing costs be financed into the loan?

A.      Yes, any difference between the contract price and the appraisal value can be used to finance normal closing costs. 

Q.      Can we use affordable housing products?

A.      Yes.  State and/or Community Housing Finance Agencies; Federal Home Loan Bank; HOME; non-profit organization (may be acceptable).

Q.      Can any lender originate Rural Development loans?

A.      Yes, only Agency approved lenders may submit the loans. 

Q.      Can we finance new homes with this product?

A.      Both end loan and construction-permanent loans are permitted.

Q.      Can I offer customers a interest rate buy-down?

A.      Permanent buy-down or a temporary 2/1 buy-down is permitted.