USDA Rural Housing Loans

Highlights of the USDA Guaranteed
Rural Housing Loan Program
1. Loans may be for up to 100 percent (or greater if the guarantee fee is included in the loan) of appraised value or for the acquisition cost, whichever is less. No down payment is required;
2. Mortgages are 30-year fixed rate at market interest rates;
3. Loans may include funds for closing costs, the guarantee fee, legal fees, title services, cost of establishing an escrow account and other prepaid items, if the appraised value is higher than sales price;
4. Sellers may contribute to the buyer’s closing costs;
5. Buyers must personally occupy the dwelling following the purchase;
6. For purchase loans, a one-time guarantee fee is charged. The charge for refinance loans is 0.5 percent. After the one-time fee is paid, there is no recurring monthly expense charged for guaranteeing the loan;
7. Guaranteed loans are subject to the provisions of the Civil Rights statutes, including the Equal Credit Opportunity Act.

To be eligible, applicants must:
1. Have an adequate and dependable income;
2. Be a U.S. citizen, qualified alien, or be legally admitted to the United States for permanent residence;
3. 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. You can use this site to see if your income qualifies.
4. Have a credit history that indicates a reasonable willingness to meet obligations as they become due;
5. 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.

Homes That Qualify:
1. Guaranteed loans can be made on either new or existing homes;
2. Existing homes must be structurally sound, functionally adequate, and in good repair;
3. There are no restrictions on the size or design of the home financed;
4. The home must not be used for income-producing purposes;
5. 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. As your loan officer, I can help you determine eligible areas.

If you would like more information or would like to apply for a USDA Rural Housing loan please call Scott Smith 801-209-3850.

Helpful Resources:
McArthur's Move-in Ready Homes

Mortgage Tools