USDA Rural Housing Service & Loan Programs In Brief :
One of the prestigious community development projects initiated by the United States Department of Agriculture (USDA) is the Rural Housing Service (RHS) home loan program. The prime objective of RHS loan program is to provide rural American residents an access to safe and sanitary housing. For this purpose, financial assistance is provided to the moderate, low and very low income families in the form of guaranteed loans and grants. RHS loans are low interest loans that are devoid of any closing costs and also do not require the borrower to make any down payment. Under this program, borrowers can take a loan and use the funds to purchase, construct, repair, or relocate a home.
There are different types of loans and grants offered under RHS loan program. These include:
Rural Housing Direct Loans: These are low interest loans that are directly funded by the federal government. Although, these loans require no down payment, the borrowers must be able to afford the mortgage payments, including taxes and insurance. Income of the applicants must be very low and he should be without adequate housing. He must be unable to obtain credit from elsewhere and have an acceptable credit history. The term period of the loan is usually 33 years. The term can be increased to 38 years for those borrowers whose income is 60 percent below Annual Mean Income (AMI) and who cannot repay the loan within the 33-year term period.
Rural Housing Guaranteed Loans: Under this program the RHS provides guarantee for the loan to private lenders, banks and mortgage companies and banks that provide the funds. This guarantee assures the lender against any borrower default. The eligibility guidelines for this type of loan are same as those for Rural Housing Direct Loans. These loans are approved for a term period of 30 years.
Rural Renting Housing Loans: Under this program finances are provided for the purpose of constructing multifamily living quarters suitable for low and very low income families.
Home Improvement Loans and Grants: Under this program financial assistance is provided in the form of loans for the purpose of making any improvement in a existing home. These improvements might include removal of any material that is hazardous to health and also making the houses accessible for physically challenged family member. Grants are also available under this scheme for senior citizens above the age of 62 years and for those who cannot repay the loan.
