RHS Loans

Rural Housing Services (RHS) loans are administered by the USDA's Rural Development staff. The Housing and Community Facilities Programs (HCFP) is part of the USDA's Rural Development. Their mission is to improve the quality of life in rural areas. Part of fulfilling that mission is providing loans and grants for housing and community facilities. Loans can be obtained for building, repairing, renovating, relocating, purchasing, and even preparing sites for construction.

They have a variety of programs. Among these are the Section 502 housing programs which are either guaranteed or direct. The Section 502 loans are designed to help rural residents that are without adequate housing and cannot obtain credit elsewhere. They must have an acceptable credit history and must be able to make the mortgage payment (estimated at 22-26% of income).

The guaranteed loans are made by the private sector but guaranteed by RHS. They help rural residents with low-to-moderate income (up to 115% of Area Median Family Income) obtain housing. Section 502 direct loans are made directly by the government. They target low and very low income families (50-80% AMI and under 50%). The terms of the loans are generally long—30-33 years, sometimes, based on need, stretched up to 38 years.

While the Rural Housing Services are committed to helping rural residents obtain affordable housing, they do have requirements that the homes be modest in size, design and costs. As with any loan, the borrower must determine which loan program will best match their needs. RHS loans are an excellent way to obtain housing that fits within your means when other loans programs will not work.

For more information concerning USDA home loans and/or whether a property is eligible for USDA financing, visit:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do