The U.S. Department of Agriculture offers a variety of programs to help low to moderate-income individuals living in small towns or rural areas achieve home ownership. The Rural Housing Service (RHS) helps qualifying applicants, who may not receive credit from other sources, purchase modestly priced homes as their primary residence.
RHS Loans are an attractive option because:
- Minimal closing cost
- Low or no down payment
The property must be in an eligible rural area. You can see the map and run a property address by clicking HERE
There are also housing income restrictions and limits on this program. The income limit and calculation is determined by the total number of people in the household, including all income (even those who are not a borrower on the loan). To see the Guaranteed Housing Program Income Limits (under the Mod. Inc.-Guar Loan section) click HERE
While USDA mortgage loans offer 100% financing to buyer’s that qualify within income and areas limits, they do have a USDA guarantee fee presently of 2.75%. This amount is financed on top of base loan amount to determine full loan amount.
USDA also has an annual fee which is presently a factor of 0.5% which is included with the monthly payment. Your VMG Loan Consultant can answer questions and discuss these numbers and details with you.
** Effective October 1, 2016, the USDA up-front guarantee fee will be reduced from 2.75% to 1.0% and the annual fee monthly will go from 0.5% factor to 0.35% factor (which is good news for USDA buyers). This will be in effect from October 1, 2016 and ends at the close of business on September 30, 2017.