USDA Rural Development
Hometown Lending has enjoyed a long and successful history of originating USDA Guaranteed Rural Housing (GRH) loans, and fully understands the unique requirements of these borrowers. Hometown Lending has developed extensive expertise that is dedicated to and focused on providing high LTV financing for borrowers purchasing homes in rural areas.
BENEFITS OF The GUARANTEED RURAL HOUSING PROGRAM
- Provides 100% loan-to-value financing for existing homes or new construction based on appraised value.
- No Monthly Mortgage Insurance
- Outstanding Interest Rates - Better Rates Than My Community (Fannie Mae) or Home Possible (Freddie Mac)
- Available to low and moderate-income rural households.
- No requirement to be a "first-time" home buyer.
- Less up-front cash-to-close requirements for this program than for conventionally insured or FHA loans.
- No monthly mortgage insurance required. One-time guarantee fee, payable to Rural Development (RD) at closing, which may be financed above the appraised value, as follows:
- Purchases - 2.00% of loan amount
- Refinances - .50% of loan amount
- Fully amortized 30-year fixed-rate loans.
- No penalty for pre-payment.
- 2/1 Temporary Buydown available. Qualification is at the start rate.
- No maximum loan limit. Loan limits are dictated by the applicant's income with respect to program eligibility and loan repayment ability. Previous ties to FHA loan limits have been eliminated.
- For depository institutions, USDA GRH loans provide opportunities to meet Community Reinvestment Act (CRA) goals
Overview
Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Income Eligibility: Applicants for loans may have an income of up to 115% of the median income for the area.
Area income limits. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.
Area income limits. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.
Property Eligibility: Click on Property Eligibility Link
Property Eligibility: Maps
Terms: Loans are for 30 years. The promissory note interest rate is set by the lender.
There is no required down payment. The lender must also determine repayment feasibility,using ratios of repayment (gross) income to PITI and to total family debt.
Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.
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