Together, America Prospers

Single Family Home Guarantees

What does this Who may apply for this program? What are applicant qualifications? Applicants must: • Income. Non-Self-Employed: program do? One-year history required. • Have a household income that does not exceed 115% of median Self-Employed and Seasonal: This no downpayment, household income.* Two-year history required. 100% financing program assists • Agree to occupy the dwelling as • . No downpayment or approved lenders in providing their primary residence. reserves required. low- and moderate-income • Be a U.S. citizen, U.S. non-citizen • . Must demonstrate a households the opportunity to national, or Qualified Alien. willingness and ability to repay . No set score requirement. • Be unable to obtain conventional own adequate, modest, decent, Alternative credit allowable for those financing with no private mortgage safe and sanitary dwellings as with no traditional credit. (PMI). their primary residence in eligible • Monthly housing . Total • Not be suspended or debarred from payment (principal, , , rural areas. participation in federal programs. insurance, HOA dues, RD annual fee) typically should not exceed Eligible applicants may purchase What properties are eligible? 29% of gross monthly income. existing homes (which may • Must be located within an eligible • All monthly . All rural area.* include costs to rehabilitate, payments included on credit report, • Must be a single-family dwelling including proposed new mortgage improve or relocate the dwelling) (may include detached, attached, payment, typically should not exceed or build new. PUD, condo, modular, and 41% of gross monthly income. manufactured). payments. Fixed USDA provides a loan note • Must meet HUD 4000.1 payment: use actual payment or 1% of loan balance. guarantee to approved lenders, minimum standards. encouraging participation by • No set maximum purchase Non-fixed payment(IBR, graduated, price (based solely on applicant adjusted, etc.) plans: Use 0.5% of minimizing their . repayment ability). loan balance.

• No set acreage limits. Must be • Seller (or interested party) This program is NOT restricted common for the area. contributions. Not to exceed 6% of to first-time homebuyers. sales price. • No seasoning requirements (“flipped” properties allowed). • Gift funds. No limit. Single Family Home Loan Guarantees

What types of loan products What governs this program? What if I don’t qualify? are available? • 7 CFR part 3555 - This part sets USDA also offers a direct 502 • Purchase existing or build new with the forth policies for the Single Family purchase program which provides Single-Close construction program. Housing Guaranteed Loan Program for subsidized payments for those (SFHGLP) administered by applicants from households with income • Current USDA Rural Development USDA Rural Development. It below 80% of MHI and who cannot loan holders can take advantage of addresses the requirements of qualify for a guaranteed loan. Interested lower rates by utilizing one of Rural Section 502(h) of the Housing Act applicants should contact their state Development’s refinance options. of 1949, as amended, and includes USDA Rural Development office. • is negotiated between policies regarding originating, the applicant and the lender. Rate servicing, holding, and liquidating Tools and Resources: must be a 30-year fixed rate. SFHGLP . To determine Property and Income • Program lending is extended to 100% • HB-1-3555 - SFH Guaranteed Loan eligibility: https://eligibility.sc.egov. of appraised value, not purchase Program Technical Handbook. This usda.gov/eligibility/welcomeAction.do price, so borrowers may potentially handbook provides Agency staff include closing costs and home and lenders participating in the repair into USDA financing. Single Family Housing Guaranteed Loan Program with the tools needed • Funds may be used for closing to originate, underwrite, and costs, reasonable and customary service guaranteed loans efficiently expenses associated with the and effectively. purchase transaction, connection fees for utilities, and insurance , essential household Why does the USDA Rural equipment, site preparation. Development do this? This program helps lenders work How do we get started? with low- and moderate- income families living in rural areas to Interested applicants can apply for make homeownership a reality. a Section 502 Guaranteed Loan Providing affordable homeownership through any approved USDA Rural opportunities promotes prosperity, Development lender. We encourage which in turn creates thriving you to contact your preferred lender communities and improves the quality and ask if they are an approved lender of life in rural areas. with USDA Rural Development.

Who can answer questions? Applicants with questions should contact an approved lender. We encourage you to contact your preferred lender and ask if they are an approved USDA Rural NOTE: Because citations and other information may be subject to change, Development Guaranteed lender. please always consult the program instructions listed in the section above, titled “What governs this program?” You will find additional forms, resources, and program information at: rd.usda.gov. Go to the “Programs and Services” tab and then select “Single Family Housing Programs.” USDA is an equal opportunity provider, employer, and lender.

August 2020