Rural Development loans for single-family housing

USDA Rural Development provides owner-occupied, single family housing loans to eligible low income applicants unable to obtain credit elsewhere. Applicants may obtain 100% Direct financing to:

* Purchase and/or repair new or existing housing (including new manufactured housing)

* Purchase a building site and construct a dwelling

* Build a home with the self-help method. Under this program, applicants provide sweat-equity labor to build their own homes.

* Purchase a government-owned home or assume an existing 502 Direct loan. For a list of government owned homes visit http://www.resales.usda.gov

Generally, properties financed may not exceed 1,800 square feet of above grade living area and must be located in a rural area. In most cases, an area is considered rural if the population is 10,000 or less. The following website can be used to help determine both applicant and property eligibility: http://eligibility.sc.egov.usda.gov/eligibility/.

Based on income, applicants may qualify for monthly payment assistance (subsidy), which is subject to recapture when the loan is paid off. Eligibility requirements include but are not limited to:

* Adjusted household income which is at or below 80% of median income (see chart on page 2). Adjusted income is calculated by subtracting eligible deductions from the gross income of all adult household members.

* A satisfactory credit history. A credit score of 640 or above typically indicates satisfactory credit. However, applicants with lower scores, or who have had credit difficulties, may be eligible under certain circumstances.

* A stable source of income, which provides adequate ability to repay the loan payments.

* Be a U.S. citizen or legally admitted U.S. resident who is 18 years of age or older and is able to enter into a binding contract.

* Meet other eligibility requirements

Do your kitchen cabinets come unhinged every time you open them? Does the pink toilet and matching sink scream “remodel me” every time you open the bathroom door? Rural Development may be able to help repair your home with the Section 504 loan program which provides financing to qualified very low-income homeowners to repair, improve or modernize their home. Examples of repair items which may be financed include:

* Health and safety hazards such as electrical, sewage disposal, water, roof repair or replacement, structural repairs, disability accommodations, etc.

* Home weatherization such as insulation, window replacement, heating, etc.

* Utility hookup, installation and/or assessment fees

* Home improvement or modernization such as flooring, modernization of kitchens and baths, etc.

* Repairs to a manufactured home, provided that the applicant owns the land and the structure is on a permanent foundation (or will be placed on a permanent foundation with the repair funds).

Applicants must be the owner-occupant of a rural dwelling with a market value not to exceed the area loan limit and generally no more than 1,800 square feet of above grade living area. Typically, an area is considered rural if the population is 10,000 or less. The following website can be used to determine if the property is eligible: http://eligibility.sc.egov.usda.gov/eligibility/.

In order to qualify for up to $20,000 with the one percent interest rate loan program, applicants must meet minimum eligibility requirements which include, but are not limited to:

* Adjusted household income which is at or below 50 percent of median income. Adjusted income is calculated by subtracting eligible deductions from the gross income of all adult household members.

* A reasonable credit history. Typically, a credit score of 640 or above indicates satisfactory credit. However, applicants with lower scores, or who have had credit difficulties, may be eligible under certain circumstances.

* A stable source of income, which provides adequate ability to repay the loan.

* Be a U.S. citizen or legally admitted U.S. resident who is 18 years of age or older and is able to enter into a binding contract.

All applications are reviewed for loan eligibility first.

Applicants age 62 or older, may be considered for partial grant funding if the applicant cannot repay a portion of the loan request. However, grant funds may only be used to remove major health and safety issues and may not be used for modernization or remodeling.