The United States Department of Agriculture (USDA) Rural Development operates several housing assistance programs. The goal of these programs is to create opportunities for families in rural areas to own safe and sanitary homes. The USDA guarantees loans made by approved vendors and offers financial assistance directly to families. Fairway Independent Mortgage Corporation offers both direct and guaranteed USDA loans throughout Atlanta, Miami, and Orlando.
The USDA Single Family Housing Guaranteed Loan Program is a program in which the USDA insures home loans that are made by approved USDA lenders. The guaranteed loan program is tailored to low and moderate income families. USDA Single Family Housing Direct Home Loans are available to low and very-low income households. These loans are not insured, rather they are offered directly by the USDA in the form of a subsidy.
USDA Rural Development Single Family Housing Guaranteed Loan Program
By insuring home loans, the USDA makes it affordable for low and moderate-income families to purchase, build, or rehabilitate a home in approved rural areas. Prospective homeowners will find there are many advantages to the USDA program including zero money down, very low interest rates, and the ability to finance closing costs. In order to be eligible for the USDA Guaranteed Loan Program, borrowers and the home being purchased must meet a few specific requirements.
- Household income cannot exceed 115 percent of the median income for the area.
- The home must be the occupied as the borrower’s primary residence.
- The home must be located in an eligible Rural Development area.
- Borrowers must have an acceptable credit history and be able to afford mortgage payments, taxes, and mortgage insurance.
Two types of mortgage insurance are required for USDA guaranteed loan borrowers. 2.75 percent of the purchase price is charged as an upfront premium. There is also an annual premium which is calculated at .5 percent of the annual mortgage balance. Although calculated annually, the annual premium is paid in monthly installments.
USDA Rural Development Single Family Housing Direct Home Loans
The USDA Direct Loan Program is payment assistance offered directly by the USDA in the form of a subsidy. The direct loan program is also commonly referred to as the Section 502 Direct Loan Program. This assistance is available only to low and very-low income families and is designed to help families that are unable to obtain traditional financing and who are currently without safe and sanitary housing. Low income is defined by the USDA as being between 50 and 80 percent of the area median income (AMI). Very-low income is considered to be below 50% of the AMI. When a borrower no longer occupies the home, or the title is transferred, the loan becomes due and the must be repaid.
Certain requirements will need to be met in order for a borrower to be eligible for the USDA direct loan program as well.
- Applicants must be without safe and sanitary housing.
- Applicants must be unable to obtain a loan from other resources and meet specific income requirements.
- The home must be the borrower’s primary residence and be located in an eligible Rural Development area.
- The home must be 2,000 square feet or less, not have a market value in excess of the applicable area loan limit, and not have an in-ground pool.
USDA Guaranteed and USDA Direct loans create opportunities for low and moderate income families throughout Georgia and Florida to own affordable homes. At Fairway Independent Mortgage Corporation, it is our goal to make homeownership a possible for all families throughout St Mary’s , Kingsland , Woodbine , Folkston , Jacksonville. For more information on Georgia and Florida USDA loans, contact us today. All Camden and Nassau County Qualify for the USDA Loan.
*USDA Guaranteed Rural Housing loans subject to program stipulations and applicable state income and property limits.