Rural Development Guaranteed Loan Program

Rural Development loans may be guaranteed if the principal purpose of the loan is to build a new dwelling or purchase and improve an existing dwelling.

• Applications are made with approved lenders
• Mortgages are for 30 years at a fixed rate
• Loans are given up to 100% of market value or purchase whichever is lower
• Our moderate and low income limits apply
• Interest rates are negotiated between the applicant and the lender
• Sometimes closing costs and repairs can be financed with the home purchase.

502 Participation Loans

• A participation loan is a Rural Development Loan from another funding source, provided that they close the same time thhat the Rural Development closes its loan.
• The leveraging must be at least 20% from a participating lender and 80% with Rural Deveiopment.
• Leveraging will reduce the amount that Rural Development must provide to help a borrower obtain houseing.
• Partcipation loans receive priority processing with our agency. 
• New Regulations require that all applicants that are eligible to first seek a Participation leveraged loan before they can be found eligible for a 100% direct 502 loan.

502 Direct Loans

This home loan program can be used to construct a new home or purchase an existing home.

• Applications and loans are processed with the local Rural Development office.
• Loans may be made up to 100% of market value or acquisition cost, whichever is less.
• Morgages are fixed rate, 33-38 year terms.
• Low and very low income limits apply
• Payment assistance subsidy reduces monthly payments for eligible applicants.

504 Loan and Grant Program

Rural Development also has a 504 Loan and Grant Program.  This program was designed to help very low income owners or occupants of modest single family homes.  Loan funds are avaiable for repairs to improve or modernize, make if safer or more sanitary, or remove health and safety hazards.  For homowners 62 and over who cannot repay a loan, grant funds are available to remove health or safety hazards, or remodel dwellings to make them handicap accessible to household members.  These fundsa re very limited.  We try to particpate with other agencies to accomplish the repairs that are needed.