Rural Housing Service
Guaranteed Single Family Housing Loans
Section 502

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Program Description: A guaranteed home loan program to lenders serving families seeking financing for homeownership.

Type of Assistance: A non-subsidized homeownership financing program targeting (but not limited to) first time home buyers. Loans may be made up to 100% loan to value.

Eligibility Requirements: Applicant family must:

• Have an acceptable credit history
  
• Have an adequate and dependable source of income not exceeding 115% of the U.S. median family income
  
• Have repayment capacity - Maximum ratios: 29% for principal, interest, taxes and insurance / 41% total obligations
  
• Be a citizen or non-citizen admitted to the United State of America for permanent residence or on indefinite parole
  
• Have the ability to personally occupy the home on a permanent basis
  
• Be located in a community with a population of 10,000 or less (selected communities with a population between 10,000 - 20,000 are also eligible)

   

Fund Availability and Maximum Amounts: Funding is based upon an annual appropriation. There is no maximum loan amount.

Interest Rate: Negotiated between the lender and the borrower (cannot exceed Fannie Mae's 90-day actual/actual rate plus 6/10 of 1%).

Terms: 30-year fixed rate mortgage.

Collateral: Deed of Trust on real estate financed.

Credit Requirements: Applicant family must have a credit record which reflects a history of meeting obligations as they become due.