USDA Rural Housing Services (RHS)
The Rural Housing Program is developed to provide very low and moderate income rural residents with better access to affordable housing finance options with little or no down payment or out of pocket costs. Borrowers may obtain a loan to purchase a new or existing Single Family Residence (SFR) or manufactured home, located in a rural area.
Pros and Cons
PRO: No mortgage insurance required on this loan
PRO: 100% Financing
PRO: Interest Rates normally lower than other loan programs
CON: Debt-to-Income Ratios lower than other loan programs
CON: Often run out of funds by or before year end
CON: Must be in a designated rural area
Eligible Borrowers
- US Citizen of legal age with a valid social security number
- Permanent Resident Alien must provide Residency and immigration status with supporting documentation and a valid I.D.
- Non-Permanent Resident Alien must provide Residency and immigration status with supporting documentation and a valid I.D.
Eligible Property Types
- Single Family Residence
- Planned Urban Developments (PUD’s)
- Manufactured Homes (Restrictions Apply)
Debt-to-Income Ratios
- 29% for non-housing debt
- 41% total debt including housing cost
Occupancy Type
You can only use the RHS program if you will live in the property as your primary residence.
Credit
- 620 credit score or higher
- No more than one (1) 30 day late on housing expenses in past 12 months
- No foreclosures in the past 3 years
- No more than one 30 day delinquency within in the past 12 months, on all accouts
- No judgments, collections or charge-off’s within the past 12 months
- No outstanding tax liens or government debt
- No debts “written off” within the past 12 months
Appraisals
- Appraisal must be completed by a state licensed appraiser
Inspections
- A home inspection must be completed on the property
- Buyer must be made aware of health and safety issues
- Buyer must be informed of overall condition of property
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