The United States Department of Agriculture (USDA) Rural Home Loan Program

Frequently Asked Questions:

Q)    Does everyone qualify for this program?

A)    No. In order to qualify for this program you must be purchasing a home in an approved town AND your income must below a certain level. Click here to view income limits and approved towns.

Q)    Can I really move into a new home with less out of my pocket than moving into a rental?

A)    Yes. The Rural Home Loan is designed to allow you to purchase a home with NO down payment. Additionally, the program allows the seller to pay most all of the loan closing costs! However, this MUST be negotiated at the time of offer!! To determine how to have the seller pay all your loan closing costs, call us at 866-movefast (866-668-3327) Remember that you can also finance the closing costs, prepaids and even repairs if the appraisal comes in higher than the purchase price.

Q)    Do I have to pay monthly Private Mortgage Insurance (PMI)? 

A)    No. There is a one time 2% guarantee fee paid at closing. This fee is paid to the USDA and can be financed into the loan amount if the appraisal allows.

Q) Does my credit have to be perfect?

A)    No. Your credit does not need to be perfect. In fact, although good credit scores are helpful, you do not need a credit score to qualify for a Rural Home Loan Program. You do need to show a responsible credit history. A responsible credit history is generally defined as:

(exceptions to most of the credit guidelines may be considered if you have a credit score of 620 or greater)

       1) No more than one late payment within the last 12 months

    2) Foreclosures and Bankruptcies must be 36 months old

    3) No accounts placed in collection within the last 12 months

    4) Judgements must have been paid off for at least 12 months

    5) Must prove 12 month rental history (not need with 620 credit score)

Q)    Do I need to be a first time home buyer?

A)    No.

Q)    Does the property have to meet any special guidelines:

A)    Yes. The property:

        1) Can NOT have an unground pool (above in ground is o.k.)

        2) Must have a water and septic test if they are private

        3) Must have a termite and pest inspection

        4) Must have a home inspection

        5) Must be in good condition (some repairs can be financed into the loan)