How Does the USDA Rural Home Loan Program Work?


Quick Answer

The USDA rural home loan program provides low- and moderate-income households the opportunity to own an adequate home, explains the USDA. The USDA operates the program through approved lenders, and households must meet various requirements, including income eligibility, property location, citizenship and residency.

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Full Answer

The USDA provides loan guarantees through authorized lenders to eligible applicants for a variety of housing-related purposes, according the USDA. Some very low-income applicants may also be eligible for direct loans in the absence of other options. Loan purposes include the purchase of new homes, new dwellings on an existing site, repairs and rehabilitation of a purchased home and renovations to accommodate persons with physical disabilities. USDA.gov provides a list of approved lenders and advises applicants to call their state Guaranteed Loan Coordinator for more local information.

Income eligibility for the USDA rural home loan program varies depending on the location, states the USDA. For instance, as of 2015, in Walker County, Alabama, the low-income limit for a four-person home is $38,950, whereas in Carteret County, North Carolina, the low-income limit for a four-person home is $49,300.

The USDA provides an eligibility website for the USDA rural home loan program at Eligibility.SC.EGov.USDA.gov. The USDA does not guarantee that all information on the eligibility website is fully accurate and requires users accept a disclaimer to that effect before using the website's eligibility tools.

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