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