Rural Home Loans (Direct Program)

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Who may apply for this program? Borrowers are required to repay all or a What does this portion of the payment subsidy received A number of factors are considered over the life of the loan when the title to program do? when determining an applicant’s the property transfers or the borrower is eligibility for Single Family Direct Home no longer living in the dwelling. Also known as the Section Loans. At a minimum, applicants interested in obtaining a direct loan must Applicants must meet income eligibility 502 Direct Loan Program, this have an adjusted income that is at or for a direct loan. Please contact your program assists low- and below the applicable low-income limit local RD office to ask for additional for the area where they wish to buy a details about eligibility requirements. very-low-income applicants house and they must demonstrate a obtain decent, safe, and sanitary willingness and ability to repay debt. What is an eligible area? housing in eligible rural areas by Applicants must: Generally, rural areas with a population less than 35,000 are eligible. Visit the providing payment assistance • Be without decent, safe, and USDA Income and Property eligibility to increase an applicant’s sanitary housing website for complete details. repayment ability. Payment • Be unable to obtain a loan from other resources on terms and assistance is a type of subsidy How may funds be used? conditions that can reasonably be that reduces the mortgage expected to meet Loan funds may be used to help low-income individuals or households payment for a short time. • Agree to occupy the property as purchase homes in rural areas. Funds The amount of assistance is your primary residence can be used to build, repair, renovate, determined by the adjusted • Have the legal capacity to incur a or relocate a home, or to purchase loan obligation and prepare sites, including providing family income. water and sewage facilities. • Meet citizenship or eligible noncitizen requirements How much may I borrow? • Not be suspended or debarred from The maximum loan amount an participation in federal programs applicant may qualify for will depend Properties financed with direct loan on the applicant’s repayment ability. funds must: The applicant’s ability to repay a loan considers various factors such as • Be modest in size for the area income, debts, assets, and the amount • Not have market value in excess of of payment assistance applicants the applicable area loan limit may be eligible to receive. Regardless of repayment ability, applicants may • Not have in-ground swimming pools never borrow more than the area loan • Not be designed for income limit (plus certain costs allowed to be producing activities financed) for the county in which the property is located. Rural Home Loans (Direct Program)

What is the interest rate and payback period? • Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower.

• The monthly mortgage payment, when modified by payment assistance, may be reduced to as little as an effective 1% interest rate.

• Up to 33 year payback period - 38 year payback period for very low income applicants who can’t afford the 33 year loan term.

How much down payment is required? No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets.

Is there a deadline to apply? Applications for this program are accepted through your local RD office year round.

How long does an application take? Processing times vary depending on funding availability and program demand in the area in which an applicant is interested in buying and completeness of the application package.

What governs this program? • The Housing Act of 1949 as amended, 7 CFR, Part 3550

• HB-1-3550 - Direct Single Family Housing Loans Field Office Handbook

NOTE: Because citations and other information may be subject to change, please always consult the program instructions listed in the section above titled “What Governs This Program?” You may also contact your local office for assistance. You will find additional forms, resources, and program information at rd.usda.gov. USDA is an equal opportunity provider, employer, and lender.

Last Updated January 2020 Together, America Prospers

Single Family Home Loan 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 • Assets. 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 • Credit. Must demonstrate a households the opportunity to national, or Qualified Alien. willingness and ability to repay debts. 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. insurance (PMI). their primary residence in eligible • Monthly housing payment. Total • Not be suspended or debarred from payment (principal, interest, taxes, 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 debt payments. 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). Student loan 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 risk. 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. • Interest rate 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 loans. 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 expenses 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, tax and insurance escrows, 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 Together, America Prospers

Single Family Housing Repair Loans & Grants

What is an eligible area? • If applicants can repay part, but not What does this all of the costs, applicants may be Generally, rural areas with a population offered a loan and grant combination. program do? less than 35,000 are eligible. Applicants may check the address of their home Also known as the Section to determine eligibility online. Is there a deadline to apply? Applications are available year round 504 Home Repair program, this How may funds be used? as long as funding is available provides loans to very-low-income and are processed in the order they • Loans may be used to repair, are received. homeowners to repair, improve, improve, or modernize homes or to or modernize their homes or remove health and safety hazards. How long does an application take? provides grants to elderly • Grants must be used to remove Approval times depend on funding health and safety hazards. very-low-income homeowners to availability in your area. Talk to a USDA home loan specialist in your remove health and safety hazards. How much money can I get? area for help with the application. • Maximum loan is $20,000.

• Maximum grant is $7,500. How do I get started? Contact a USDA home loan specialist Who may apply • Loans and grants can be combined in your area. for this program? for up to $27,500 in assistance.

What governs this program? To qualify, you must: What are the terms of the loan or grant? • The Housing Act of 1949 as amended, 7 CFR, Part 3550 • Be the homeowner and occupy • Loans can be repaid over 20 years. the house • HB-1-3550 - Direct Single Family • Loan interest rate is fixed at 1%. Housing Loans and Grants Field • Be unable to obtain affordable • Full title service is required for loans Office Handbook credit elsewhere of $7,500 or more.

• Have a family income • Grants have a lifetime limit of $7,500. below 50 percent of the area • Grants must be repaid if the median income property is sold in less than 3 years.

• For grants, be age 62 or older and not be able to repay a repair loan NOTE: Because citations and other information may be subject to change, please always consult the program instructions listed in the section above titled “What Governs This Program?” You may also contact your local office for assistance. You will find additional forms, resources, and program information at rd.usda.gov. USDA is an equal opportunity provider, employer, and lender.

Last Updated January 2020 Together, America Prospers

Mutual Self-Help Housing Technical Assistance Grants

What does this What is an eligible area? How do we get started? Applicants can check eligible areas at Applications for this program are program do? eligible addresses. accepted through our local offices year round. Provides grants to qualified How may funds be used? Who can answer questions? organizations to help them • Give technical and supervisory carry out local self-help housing assistance to participating families. • Contact your local office. construction projects. Grant • Help other organizations provide self-help technical and What governs this program? recipients supervise groups supervisory assistance. • The Housing Act of 1949 as of very-low- and low-income amended, 7 CFR 1944-I • Recruit families, help them complete individuals and families as they loan applications and carry out other • Agency Instruction – 1944-I related activities that enable them construct their own homes in rural to participate. Why does USDA Rural Development areas. The group members provide do this? most of the construction labor on Funds MAY NOT be used to: By working in partnership with trusted each other’s homes, with technical local organizations, this program • Hire people to perform construction helps very-low- and low-income assistance from the organization work for participants. families get affordable, clean, and overseeing the project. • Buy real estate, building materials, safe homes of their own in rural areas. or other property. Very-low-income families living in substandard housing are given first • Pay debts, expenses, or costs for priority for loan assistance. the participants. Who may apply Check Eligibility for this program? • Pay for employee training. • Pay other indirect costs. Contact • Government nonprofit your local office for details. organizations

• Federally recognized Tribes

• Private nonprofit organizations

Last Updated January 2020 Together, America Prospers

Housing Preservation Grants

What does this What is an eligible area? How do we get started? Areas that may be served include: Applications are accepted on an program do? annual basis through a Notice of • Rural areas and towns with Funding Availability (NOFA) in the 20,000 or fewer people – It provides grants to sponsoring Federal Register. Check eligible addresses organizations for the repair • Federally recognized Tribal lands Who can answer questions? or rehabilitation of housing Contact your RD State office. occupied by low- and How may funds be used? very-low-income (1) people. • Applicants provide grants or What governs this program? low-interest loans to repair or • Code of Federal Regulation, rehabilitate housing for low- and 7 CFR 1944-N very low-income (1) homeowners • RD Instruction 1944-N Who may apply • Rental property owners may also for this program? receive assistance if they agree to • RD Instruction 1940-L, Methodology make units available to low- and very and Formulas for Allocation of low-income (1) families Loan and Grant Program Funds • Most State and local governmental entities • Eligible expenses include: • RD Instruction 1940-G, Environmental Program Repairing or replacing electrical • Nonprofit organizations ° wiring, foundations, roofs, • RD Instruction 1901-E, Civil Rights insulation, heating systems, and • Federally recognized Tribes Compliance Requirements water/waste disposal systems • This program is authorized by • Individual homeowners are ° Handicap accessibility features Title V of the Housing Act of 1949 not eligible ° Labor and materials ° Administrative expenses ° For a complete list, see Code of Federal Regulations (CFR) 1944.664

Last Updated January 2020 Certified Loan Application Packaging Rural Home Loans (Direct Program)

Through the Single Family Housing Section 502 Direct Loan Program, USDA Rural Development provides affordable loans to eligible low- and very low-income applicants who wish to obtain modest housing in rural areas (visit the USDA Income and Property Eligibility website for details). One way parties seeking affordable homeownership may hear about this program is through loan application packagers.

What is a loan application packager? quality assurance reviews on packages prepared by certified packagers through their qualified A loan application packager provides an optional employers. service to parties seeking a housing loan by helping to navigate the loan application process. A packager can help determine if the Section 502 Direct Loan Program What experience is required? is a good fit and, if so, help to assemble a complete loan To be a Rural Development-certified loan application application package. Generally, a fee is charged for their packager, an individual must first have at least one year service. Packagers do not work for or represent Rural of experience with affordable housing loan origination Development. and/or affordable housing counseling. Rural Development supports partnerships with loan To be a Rural Development-approved intermediary, an application packagers since they can provide outreach entity must first have at least five years of verifiable and be available in counties where there is not a local experience with our Single Family Housing Direct Rural Development office. Packagers: programs. • Promote the program in underserved areas. • Prescreen and counsel potential applicants on What training is required? how to improve their ability to qualify for a home. Certified loan application packagers and quality • Ensure that applications are complete with all assurance staff working for an intermediary must supporting documentation needed for a decision. complete a Rural Development approved loan • Give applicants insight into Rural Development’s application packaging course and successfully pass the application process and regulations. corresponding test. This three-day course reviews the Section 502 Direct Loan Program and its regulations; discusses the Are loan application packagers certified program’s application process in detail, including by Rural Development? borrower and property eligibility and underwriting requirements; and reviews the roles and responsibilities Yes. In May 2016, Rural Development implemented of a certified packager, their qualified employer, an a certified loan application packaging process that intermediary, and Rural Development staff. imposes reasonable experience, training, structure, and performance requirements on the following three parties involved in the certified packaging process: What steps should I take to become a 1. A Rural Development-certified loan application certified loan application packager? packager employed by a qualified employer. Familiarize yourself with the certified packaging process 2. A qualified employer; i.e., an affordable housing by reading the related information found in 7 CFR nonprofit, public agency, tribal housing authority, or 3550.75 and Chapter 3 of Handbook-1-3550 (specifically State Housing Finance Agency (SHFA). Attachment 3-A). If you meet the experience 3. A Rural Development-approved intermediary; i.e., requirements and work for a qualified employer, an affordable housing nonprofit, public agency, or you may contact a Rural Development-approved SHFA approved by Rural Development to perform intermediary in your state to discuss funneling applications through them. Certified Loan Application Packaging Rural Home Loans (Direct Program) Cont.

How can an entity apply to be a Rural The fee is split between the intermediary and the Development-approved intermediary? certified packager. • When program funds are limited, loan Entities interested in becoming an intermediary must applications funneled through an intermediary furnish sufficient documentation to demonstrate to are given funding priority. Rural Development’s satisfaction that they meet each of the conditions specified in R7 C3F 550.75(b)(3). See • Partnering with an entity that shares similar Chapter 3 of Handbook-1-3550 (specifically Attachment community and housing mission-related goals. 3-A) for the list of documentation that constitutes an application. Can a packager and their employer Please visit our Direct Loan Application Packagers choose not to work with an intermediary? webpage to access training that has more details on Under the certified packaging process, a certified how to apply. packager and their qualified employer can work without an intermediary once they have submitted a sufficient Applications to be a Rural Development-approved number of applications through the intermediary and intermediary are welcome at any time and should be have exhibited an acceptable performance rating. This emailed to [email protected]. arrangement must be approved by the applicable Rural Development State Director and supported by the How does working with an intermediary intermediary. benefit certified packagers and their Keep in mind that certified packagers working without qualified employers? an intermediary have a lower permissible packaging fee There are many benefits to working with a Rural and are not given funding priority. Development-approved intermediary. They include, but are not limited to: Where can I learn more? Additional information on the certified packaging • The quality assurance reviews conducted by the process can be found in 7 CFR 3550.75 and Chapter 3 of intermediary ensure that loan application Handbook-1-3550, Attachment 3-A. packages submitted to Rural Development are likely to be determined eligible. • The intermediary provides supplemental training, technical assistance, and support. • The permissible packaging fee is up to $1,750.

NOTE: Because citations and other information may be subject to change please always consult the program instructions listed in the section above titled “Where can I learn more?” You may also contact your local office for assistance. You will find additional forms, resources, and program information at www.rd.usda.gov. USDA is an equal opportunity provider, employer, and lender. Last Updated: April 2019 Intermediaries Organization Name Contact Contact email Contact Phone States Served (Agency Name Identification #) 1 Federation of Jamie jpuckett@fah 859-228-2112 Alabama, Delaware, Florida, Georgia, Indiana, Appalachian Housing Puckett e.org Kentucky, Maryland, Michigan, Mississippi, Enterprises, Inc. New York, North Carolina, Ohio, (FAHE) Pennsylvania, South Carolina, Tennessee, (#50001) Vermont, Virginia and West Virginia 2 HomeOwnership Tanya tholbrook@ho 304-636-9115, West Virginia Center, Inc. Holbrook cwv.org option 2 (#50020) 3 Little Dixie Sheila spierce@ldcaa 580-326-5165 Arkansas, Kansas, Louisiana, Missouri, Community Action Pierce .org Nebraska, North Dakota, Oklahoma, South Agency, Inc. Dakota, and Texas (#50002) 4 North East Carla Potts [email protected] 573-324-6622 Missouri, Illinois, Iowa Community Action rg Corporation (NECAC) (#50003) 5 NeighborWorks Hanna htester@nwmt. 406-240-4493 Montana Montana Tester org (#50005) 6 NeighborWorks Paul pmclaughlin@n 603-782-0536 Vermont & New Hampshire Southern New McLaughlin wsh. Hampshire (#50006) 7 Northwest Regional Ana Castro- ana@nwregio 870-743-6779 Arkansas & Puerto Rico Housing Beard nalhousing.or Development g Corporation (#50008) 8 Rural Community Juanita jhallstrom@rca 916-447-9832, Alaska, Arizona, California, Colorado, Hawaii, Assistance Hallstrom c.org ext. 1065 Idaho, Montana, Nevada, New Mexico, Corporation (RCAC) Oregon, Utah, Washington, Western Pacific (#50009) and Wyoming 9 Rural Ulster Frank Frobusto@rup 845-331-9860 New York Preservation Robusto co.org Company, Inc. (RUPCO) (#50019) 10 Southwest Ali Joens [email protected] 507-836-1605 Minnesota and Wisconsin Minnesota Housing rg Partnership (#50021) 11 The Housing Christina christina@ho 828-692-4744, North Carolina Assistance Hernandez using- ext. 104 Corporation assistance.co (#50018) m 12 The Housing Fund, Angela abelcher@the 615-515-2201 Minnesota, North Dakota, Tennessee, and Inc. Belcher housingfund.o Wisconsin (#50015) rg 13 Tierra del Sol Art [email protected] 575-541-0477 New Mexico and Texas Housing Corp Marru jo g (#50011) Intermediaries

Organization Name Contact Contact Phone Contact email States Served (Agency Name Identification #) 14 Virginia Housing Amy 804-343-5977 Amy.Schwartz@ Virginia Development Schwartz vhda.com Authority (VHDA) (#50017) 15 Wilson Community Barbara 252-243-4855, blackston@wciai North Carolina Improvement Blackston ext. 206 nc.org Association (WCIA) on behalf of The North Carolina Community Economic Development (NCCED) Network (#50012)

Revision Date: 6/10/2020 MAIN WEBSITE https://www.rd.usda.gov/programs-services/all-programs/single-family-housing-programs

DIRECT LOAN APPLICATION PACKAGER WEBSITE – Training materials, Resources, and Newsletters https://www.rd.usda.gov/programs-services/services/direct-loan-application-packagers

OFFICE LOCATOR – Find your local Rural Development Office https://www.farmers.gov/service-center-locator

ELIGIBILITY WEBSITE – Applicants can use this tool to see what housing programs may be a good fit. https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do