Direct 502 – Rural Housing Loans
You really want to buy a home, but you don’t have enouch cash on-hand for the down payment and closing costs. Don’t give up – you can still own the home of your dreams through USDA Rural Development’s Single Family Housing Loan Program.
The direct loan program is designed to assist lower income households to obtain decent, safe, and sanitary housing.
- Only one-family homes are eligible. This includes new or existing homes with home site.
- Existing home must be structurally sound, adequate, and in good repair.
- The home must pass USDA thermal standards, Housing Quality Standards and lead base paint requirements.
- All painted surfaces of housing constructed prior to 1978 shall be inspected to determine whether defective paint surfaces exist before funding. All defective paint surfaces will be assumed to be immediate hazards.
- No restrictions exist on the size or design of dwelling.
- Typical amenitites are allowed, except in-ground swimming pools.
- Home must be located in rural areas, or towns of under 20,000 residents, and outside MSA area.
- Lot size – minimum home site.
- Must be a U.S. citizen or legally admitted to the U.S. for permanent residence.
- Have an adequate, stable and dependable income.
- income of all adult household occupants is required to be submitted. The household must have an adjusted income that is at or below the applicable low-income limit for the county in which the property is located for loan approval.
- Must meet payment ratios.
- Be unable to obtain sufficient credit from another source.
- Agree to personally occupy the dwlling.
- Have a positive credit history, (having borrowed money & historically making payments on time); and also having absense of negative history.
- Homebuyer Education is a loan requirement.
- No down payment. Loan value is based on market value appraisal.
- Loans may include closing costs, legal fees, title services, and cost of establishing an escrow account.
- Applicant must pay 12-month home insurance policy.
- The intrest rate is currently 6.125 percent and is subject to change. Payment Assistance is based on household income and can pay the interest rate down to as low as 1 percent.
- $147,500 loan limit – ND
- $145,200 loan limis – SD
- Subsidy is subject to recapture.
- The borrower agrees to refinance with a bank loan when able to do so.
Cell: (701) 391-4279
Guaranteed Rural Housing Loans
Designed to make the dream of home ownership a reality for very low, low and moderate
income North Dakota families. If home ownership has seemed out of reach due to
insufficient income or the inability to save for a down payment, Rural Development’s
home ownership programs may be what you’ve been waiting for.
More rural families and individuals may be eligible to become homeowners with the help
of a U.S. Department of Agriculture guaranteed loan. Sometimes good credit and a steady
income are not enough to qualify at a commercial lending institution, like a bank. A
sizable down payment may also be required. When Rural Development agrees to
guarantee a loan, lending institutions can help buyers while incurring little risk. Through
the Guaranteed Rural Housing Loan Program, people can qualify for mortgages even
without a down payment.
Must have an adequate and dependable income.
Have an adjusted annual income not to exceed 115% of the median income limit
established for the county (adjusted annual income is determined by subtracting $480 per
each minor child and child care expenses).
Be an acceptable credit risk.
Must be a U.S. citizen or legally admitted to the U.S. for permanent residence.
Must have repayment ability based on the following ratios: Principal, Interest, Taxes and
Insurance divided by gross monthly income, must be equal to or less than 29 percent. The
total debt ratio is less than or equal to 41 percent determined by dividing all monthly
debts by gross income.
Only one-family homes are eligible. This includes new or existing homes with site.
Existing home must be structurally sound, adequate, and in good repair.
The home must pass USDA thermal standards, Housing Quality Standards.
No restrictions exist on the size or design of dwelling.
Typical amenities are allowed, except in-ground swimming pools.
Home must be located in rural areas, or town of under 20,000 residents and outside of an
Lot size – minimum home site.
Applicant makes application with participating lenders.
Loans may include closing costs, legal fees, title services, and cost of establishing an
Applicants must occupy the dwlling after purchase.
Mortgages are 30-year fixed rate loans at market interest rates.