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    w0lkf
    Apr 3 rd, 2017
    Banking is a Business No Comments

    RHS LOANS: WHAT ARE THEY AND HOW DO I GET ONE?

    RHS (Rural Housing Service) loans are granted by the USDA primarily for low-income rural borrowers. Created in 1994 by the Department of Agriculture, RHS loans have helped millions of borrowers build, purchase, or remodel homes in rural areas. The RHS offers three separate programs. You may qualify for one of them.

    Section 502- Rural Housing Guarantee Loan Program

    For this program, the RHS guarantees the loan made by a private lender. The term of the loan is usually 30 years. To qualify for guarantee loan program, a borrower must:

    • Purchasing a home in a rural area

    • Have the means to make the mortgage payments

    • Have an acceptable credit score, usually at least 620.

    • Make less than 115% of the median family income for your area.

    Section 502- Single Family Housing Direct Loan Program

    For this program, RHS is the lender. The borrower must use the loan to purchase, build, remodel or repair a home in a rural area. The term of the loan ranges from 33 to 38 years. To qualify for the direct loan program, a borrower must:

    • Have the means to make the mortgage payments

    • Have an annual income between 50-80% of the median family income for your area.

    • Currently be without adequate housing

    • Be unable to secure a loan elsewhere.

    Section504 – Rural Repair and Rehabilitation Loans and Grants

    This is a specialized program for extremely low-income borrowers who must repair their current home to remove health and safety hazards. The maximum amount of the loan is $20,000 with an interest rate of 1 percent. To qualify, a borrower must:

    • Be unable to obtain a loan elsewhere

    • Have income below 50% of the median family income for your area.

    Grants of up to $7,500 are available for borrowers who are 62 years of age or older.

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