| The government provides loans to those individuals | | | | verification of your income, any debts that you |
| who have low to moderate income for permanent | | | | owe,and other pertinant information on the application |
| residence in rural areas. To qualify for these | | | | such as plans, specifications, and cost estimates.How |
| government loans is not that hard and the restrictions | | | | Do You Apply? |
| are small.The Federal agency that provides the loans | | | | For direct loans, application is made at the Rural |
| for housing is: Rural Housing Service, (RHS)Their main | | | | Development field office serving the county where the |
| objective is to assist very low, low-income, and | | | | dwelling is or will be located. For guaranteed loans, |
| moderate-income households so that they can get | | | | application is made to a participting lender. This |
| decent, safe, and modest housing as a permanent | | | | program is excluded from coverage under OMB |
| residence.The types of assistance they provide are | | | | Circular No. A-110.Rural Development field offices have |
| "Direct Loans" or "Guaranteed / Insured | | | | the authority to approve most Direct loan requests. |
| Loans".Description for Uses and Use Restriction | | | | The processing of guaranteed loans will vary from |
| Reads:"Direct and guaranteed loans may be used to | | | | State to State. You will need to contact the Rural |
| buy, build, or improve the applicant's permanent | | | | Development State Office in your area. It will be listed |
| residence. New manufactured homes may be | | | | in your local telephone directory.If no backlog exists, |
| financed when they are on a permanent site, | | | | decisions on direct loan applications are made within 30 |
| purchased from an approved dealer or contractor, and | | | | to 60 days. Requests for guarantee loans are acted |
| meet certain other requirements. Under very limited | | | | upon in 3 days.The time it takes to get approved or |
| circumstances, homes may be re-financed with direct | | | | disapproved can range anywhere from 30 days to 60 |
| loans. Dwellings financed must be modest, decent, | | | | days depending on the availablity of funds and |
| safe, and sanitary. The value of a home financed with | | | | whether or not the application was filed while a |
| a direct loan may not exceed the area limit. The | | | | backlog of applications are present. For guarantees, a |
| property must be located in an eligible rural area. | | | | decision is required within 3 days of loan package |
| Assistance is available in the States, the | | | | submission by the approved lender.You CAN appeal if |
| Commonwealth of Puerto Rico, the U.S. Virgin Islands, | | | | you are denied the loan or loan guarantee: |
| Guam, American Samoa, the Commonwealth of | | | | "Agency regulations providing customers with the |
| Northern Mariana's, and the Trust Territories of the | | | | rights for an informal review, mediation or alternative |
| Pacific Islands. Direct loans are made at the interest | | | | dispute resolution (ADR), or appeal to the National |
| rate specified in RD Instruction 440.1, Exhibit B (available | | | | Appeals Division (NAD) are contained in 7 CFR Part |
| in any Rural Development local office), and are repaid | | | | 3550. NAD regulations are found at 7 CFR Part 11. |
| over 33 years or 38 years for applicants whose | | | | Requests for an informal review, mediation and ADR |
| adjusted annual income does not exceed 60 percent | | | | must be received within 30 days from the date of the |
| of the area median income, if necessary to show | | | | adverse decision. Requests for an appeal to NAD |
| repayment ability. Payment assistance is granted on | | | | must be received within 30 days of receipt of the |
| direct loans to reduce the installment to an "effective | | | | adverse decision."You can also reapply at any |
| interest rate" as low as one percent, depending on | | | | time.This assistance is available throughout the year by |
| adjusted family income. Payment assistance is subject | | | | means of quarterly allocations. Funds may be given at |
| to recapture by the government when the customer | | | | the loan closing or they may be deposited in the bank |
| no longer resides in the dwelling. There is no funding | | | | account for purchase of a building site, and purchase |
| provided for deferred mortgage authority or loans for | | | | or repair of a dwelling, or in multiple advances for |
| deferred mortgage assumptions. Guaranteed loans | | | | construction. For guaranteed loans, funds are |
| may be made to refinance either existing RHS | | | | distributed after all the work has been completed.Just |
| Guaranteed Housing loans or RHS Section 502 Direct | | | | so you know, the applications for direct loans far |
| Housing loans. Guaranteed loans are amortized over | | | | exceed available funding. There's usually a waiting list if |
| 30 years. The interest rate is negotiated with the | | | | you want direct loan funding for a home.You are not |
| lender."The eligibility requirements are:"Applicants must | | | | required to, but you should keep copies of any of your |
| have very low, low or moderate incomes. Very | | | | loan related documents.Range and Average of |
| low-income is defined as below 50 percent of the | | | | Financial Assistance |
| area median income. Low-income is between 50 and | | | | From $1,000 to $105,000; an average of $73,350 for |
| 80 percent of AMI. Moderate income is below 115 | | | | 502 direct loans, and 93,000 for guaranteed loans. |
| percent of AMI. Families must be without adequate | | | | Loans in high cost areas may be higher.Literature and |
| housing, but able to afford the housing payments, | | | | Guidelines: 7 CFR Part 3550 "Direct Single Family |
| including principal, interest, taxes, and insurance (PITI). | | | | Housing Loans and Grants." For guaranteed loans, |
| Qualifying repayment ratios are 29 percent for PITI to | | | | 1980-D "Subpart D -Rural Housing Loans."You can |
| 41 percent for total debt. In addition, applicants must be | | | | contact their offices here:For Your Local Office: |
| unable to obtain credit elsewhere, yet have an | | | | They will be listed under United States Department of |
| acceptable credit history."It would be very wise to | | | | Agriculture for Rural Development in your local phone |
| check the area that you are interested in to see what | | | | directory. If you can't find their listing, you can contact |
| they yearly taxes are as some areas are very high | | | | the Rural Development State Office on the web here: |
| compared to others. Depending on your age, and area, | | | | Office |
| taxes could run anywhere from 500.00 per year up to | | | | Director, Single Family Housing Direct Loan Division or |
| thousands of dollars per year. By age, I mean that | | | | Director Single Family Housing Guaranteed Loan |
| senior citizens get a huge tax break on property | | | | Division, Rural Housing Service (RHS), Department of |
| taxes.You can also lower property taxes by other | | | | Agriculture, Washington, DC 20250. Telephone: (202) |
| means including farming. Check with their office to see | | | | 720-1474 (direct loans); (202) 720-1452 (guaranteed |
| what tax breaks you can get.You may be required to | | | | loans). |
| show proof of your inability to get credit elsewhere, | | | | |