RHS Programs

Rural Housing Service(RHS) is part of the United Stated Department of Agriculture(USDA) and has helped people finance their homes in rural areas for over 50 years.

Housing and Community Facilities Programs help rural communities and individuals by providing loans and grants for housing and community facilities.

They provide funding for low-to-moderate-income single family homes, apartments for low-income persons or the elderly, hospitals, housing for farm laborers, childcare centers, nursing homes, schools, fire and police stations, libraries and more.

The RHS has committed itself to helping expand rural minority homeownership by:

1. Lowering Fees To Reduce Barriers to Minority Homeownership
2. Doubling the Number of Self-Help Participants By 2010
3. Increasing Participation by Minority Lenders through Outreach
4. Promoting Credit Counseling and Homeownership Education
5. Monitoring Lending Activities to Insure 10 Percent Increase In Minority Homeownership

Section 502 - Guaranteed Single-Family Loan Program

Loans are guaranteed by RHS and backed by the full faith and credit of the U.S. government for 90% of the loan value.

Section 502(g) Requirements:

1. Incomes of no more then 115% of the median income for the area.
2. The family must be without current adequate housing, but still be able to afford the mortgage payments, plus insurance and taxes.
3. Borrowers must have reasonable credit histories.
4. Primary residence only

Section 502(g) Advantages:

1. Loans are made up to  100% of the appraised value(no down payment).
2. Terms are for 30 years, no less
3. must include a fixed interest rate

Section 502 - Direct Single-Family Loan Program

Rural Housing Service Direct Loans are loans that are directly funded by the U.S. Government.

Section 502(d) requirements:

1. Only available to low-(50%-80% of area median income) or very low-income(below 50% of area median incomes) households.
2. Families must be without adequate housing, but still be able to afford the mortgage payments, plus insurance and taxes.(payment subsidy is available to applicants to enhance repayment ability)
3. Borrowers must be unable to obtain a mortgage loan elsewhere, yet have reasonable credit histories.
4. Primary residence only

Section 502(d) advantages:

1. Loans are made up to 100% of the appraised value(no down payment).
2. Loans are for up to 33 years (38 for those with incomes below 60 percent of the area median income and who cannot afford 33-year terms).
3. Interest rate is set by Housing and Community Facilities Program(HCFP) based on the Government’s cost of money(equals a lower than is available to the general public interest rate).

The RHS fee is 1% of the guaranteed portion of the loan and is paid by the Lender of Record, or may be passed on to the borrower.

Section 502 loans are, for the most part ,used to help persons with low-incomes purchase homes in rural areas. Funds can be used to relocate a home, renovate, repair, build or to purchase and prepare sites, including providing water and sewage facilities.

For information on whether your area or property is eligible click here. For area income limits for your area click here. Below are links to RHS programs not covered

Single-family programs:

1. Rural Housing Repair and Rehabilitation Grants
2. Rural Housing Repair and Rehabilitation Loans
3. Mutual Self-Help Housing Loan program
4. Rural Housing Site Loans

Multi-Family Programs:

1. Farm Labor Housing Loan and Grant program
2. Guaranteed Rental Housing
3. Housing Preservation Grant
4. Rental Assistance Program
5. Rural Rental Housing

Community programs:

1. Direct & Guaranteed Loans
2. Grants