Rural Development

Guaranteed Housing

Frequently Asked Questions (Real Estate Professionals)

Q.      Is the loan amount limited to the purchase price?

A.      No.  It is limited to the appraised value.  In addition, the one-time guarantee fee

can be included in the loan above the appraised value.

Q.      Can closing costs be financed in the loan?

A.      Yes, if the appraised value exceeds the contract amount.

Q.      Can repairs be included in the loan?

A.      Yes. The appraiser can do an 'as improved' appraisal to include the cost of repairs.

Q.      What are the required inspections?

A.      The property must meet FHA requirements or similar standards and Rural Development  thermal standards.

Q.      Is mortgage insurance required?

A.      No.  The Agency charges a one-time guarantee fee that can be financed.

Q.      How much time should we allow for closing the transaction? 

A.      Upon receipt of a complete loan package from an approved lender, our review process takes 24 to 48 hours.  The loans close within the typical time frame allowed for conventional financing.

 Q.     Is there a minimum credit score?

A.     No.  However, the approved lender will expect an adequate credit history to demonstrate the customer is creditworthy.

Q.      Can a duplex unit be financed?

A.      No. Rural Development regulations prohibit income producing properties.

Q,      Can a hobby farm be financed?

A.       No. The property must be considered a rural residence that does not produce income or have excessive acreage.

Q.      I work with a local mortgage broker.  Can they process the loan? 

A.      Yes.  However, only the Agency approved underwriting lender can submit the application to Rural Development. 

Q.     Are seller concessions allowed?

A.     Yes.  Rural Development does not restrict the amount of seller concessions.