Home Ownership Guaranteed Loans

Rural Housing Guaranteed Loans are available for households with income that do not exceed 115% of the median household income. To determine the income limit for a particular county, click on “USDA Income & Property Eligibility Site” at the Rural Housing Programs web page. Applicants may obtain 100% financing to build, purchase new,or purchase existing dwellings. Loans are for 30 years and the lender must determine repayment feasibility using ratios. Housing must be modest in size, design, and cost. There is no loan limit other than having the appropriate repayment ratios. Loans are made by approved Guaranteed Lenders.

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Home Ownership Direct Loans

Rural Housing Direct Loans are available for low and very low-income households to obtain homeownership. Applicants may obtain 100% financing to build, purchase new, purchase existing, purchase a site, repairs, and water and sewage facilities. The 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). Interest rates are subsidized and may be as low as 1%. Applicant's income must be at or below 80 percent of the area median income. To determine the income limit for a particular county, click on “USDA Income & Property Eligibility Site” at the Rural Housing Programs web page. Housing must be modest in size, design, and cost. The loan limits for the areas are located on this spreadsheet.

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Self-Help Housing

Self-Help Housing Loans help groups of six to ten low-income families build their own homes by providing materials and the skilled labor they cannot furnish themselves. The families must agree to work together until all homes are finished. 

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Home Improvement Loans and Grants

Home Improvement and Repair Loans and Grants enable very low-income rural homeowners to remove health and safety hazards from their homes and to make homes accessible for people with disabilities. Grants are available for people 62 years old and older who cannot afford to repay a loan. 

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Site Loans 

Rural Housing Site Loans buy adequate building sites for development of a desirable community by private or public nonprofit organizations. 

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Housing Subsidies

Rural Housing Programs can help subsidize monthly mortgage and rental payments, limiting these costs to no more than 30 percent of the adjusted monthly income of the applicant. These subsidies can be used for the home ownership programs described above. 

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Housing Preservation Grants (HPG)

Housing Preservation Grants are provided to nonprofit and governmental organizations to remove health and safety hazards to owner-occupied residences or rental housing for low income individuals. These grants are used along with other funding sources to accomplish the repairs. The dates and location to apply are published in the Federal Register annually. The Notice of Funding Availability can be accessed through the National Rural Development Webpage.

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Copyright © August 1996, USDA Rural Development Revised on: March 23, 2005