Rural Home Loans (Direct Program) - Catholic Charities USA
Together, America ProspersRural Home Loans (Direct Program)What does thisprogram do?Who may apply for this program?obtain decent, safe, and sanitaryA number of factors are consideredwhen determining an applicant’seligibility for Single Family Direct HomeLoans. At a minimum, applicantsinterested in obtaining a direct loan musthave an adjusted income that is at orbelow the applicable low-income limitfor the area where they wish to buy ahouse and they must demonstrate awillingness and ability to repay debt.housing in eligible rural areas byApplicants must:Also known as the Section502 Direct Loan Program, thisprogram assists low- andvery-low-income applicantsproviding payment assistanceto increase an applicant’srepayment ability. Paymentassistance is a type of subsidythat reduces the mortgagepayment for a short time.The amount of assistance isdetermined by the adjustedfamily income. Be without decent, safe, andsanitary housing Be unable to obtain a loan fromother resources on terms andconditions that can reasonably beexpected to meet Agree to occupy the property asyour primary residence Have the legal capacity to incur aloan obligation Meet citizenship or eligiblenoncitizen requirements Not be suspended or debarred fromparticipation in federal programsProperties financed with direct loanfunds must: Be modest in size for the area Not have market value in excess ofthe applicable area loan limit Not have in-ground swimming pools Not be designed for incomeproducing activitiesBorrowers are required to repay all or aportion of the payment subsidy receivedover the life of the loan when the title tothe property transfers or the borrower isno longer living in the dwelling.Applicants must meet income eligibilityfor a direct loan. Please contact yourlocal RD office to ask for additionaldetails about eligibility requirements.What is an eligible area?Generally, rural areas with a populationless than 35,000 are eligible. Visit theUSDA Income and Property eligibilitywebsite for complete details.How may funds be used?Loan funds may be used to helplow-income individuals or householdspurchase homes in rural areas. Fundscan be used to build, repair, renovate,or relocate a home, or to purchaseand prepare sites, including providingwater and sewage facilities.How much may I borrow?The maximum loan amount anapplicant may qualify for will dependon the applicant’s repayment ability.The applicant’s ability to repay a loanconsiders various factors such asincome, debts, assets, and the amountof payment assistance applicantsmay be eligible to receive. Regardlessof repayment ability, applicants maynever borrow more than the area loanlimit (plus certain costs allowed to befinanced) for the county in which theproperty is located.
Rural Home Loans (Direct Program)What is the interest rate andpayback period? Fixed interest rate based on currentmarket rates at loan approval or loanclosing, whichever is lower. The monthly mortgage payment,when modified by paymentassistance, may be reduced to aslittle as an effective 1% interest rate. Up to 33 year payback period - 38 yearpayback period for very low incomeapplicants who can’t afford the 33 yearloan term.How much down paymentis required?No down payment is typically required.Applicants with assets higher than theasset limits may be required to use aportion of those assets.Is there a deadline to apply?Applications for this program areaccepted through your local RD officeyear round.How long does an application take?Processing times vary depending onfunding availability and program demandin the area in which an applicant isinterested in buying and completenessof the application package.What governs this program? The Housing Act of 1949 asamended, 7 CFR, Part 3550 HB-1-3550 - Direct Single FamilyHousing Loans Field Office HandbookNOTE: Because citations and other information may be subject to change,please always consult the program instructions listed in the section abovetitled “What Governs This Program?” You may also contact your local office forassistance. You will find additional forms, resources, and program information atrd.usda.gov. USDA is an equal opportunity provider, employer, and lender.Last Updated January 2020
Together, America ProspersSingle Family Home Loan GuaranteesWhat does thisprogram do?This no downpayment,100% financing program assistsapproved lenders in providinglow- and moderate-incomehouseholds the opportunity toown adequate, modest, decent,safe and sanitary dwellings astheir primary residence in eligibleWho may apply for this program?What are applicant qualifications?Applicants must: Income. Non-Self-Employed:One-year history required. Have a household income thatdoes not exceed 115% of medianhousehold income.* Agree to occupy the dwelling astheir primary residence. Assets. No downpayment orreserves required. Be a U.S. citizen, U.S. non-citizennational, or Qualified Alien. Credit. Must demonstrate awillingness and ability to repaydebts. No set score requirement.Alternative credit allowable for thosewith no traditional credit. Be unable to obtain conventionalfinancing with no private mortgageinsurance (PMI).rural areas. Not be suspended or debarred fromparticipation in federal programs.Eligible applicants may purchaseWhat properties are eligible?existing homes (which may Must be located within an eligiblerural area.*include costs to rehabilitate,improve or relocate the dwelling)or build new.USDA provides a loan noteguarantee to approved lenders,encouraging participation byminimizing their risk.This program is NOT restrictedto first-time homebuyers.Self-Employed and Seasonal:Two-year history required. Must be a single-family dwelling(may include detached, attached,PUD, condo, modular, andmanufactured). Monthly housing payment. Totalpayment (principal, interest, taxes,insurance, HOA dues, RD annualfee) typically should not exceed29% of gross monthly income. All monthly debt payments. Allpayments included on credit report,including proposed new mortgagepayment, typically should not exceed41% of gross monthly income. Must meet HUD 4000.1minimum standards.Student loan payments. Fixedpayment: use actual payment or1% of loan balance. No set maximum purchaseprice (based solely on applicantrepayment ability).Non-fixed payment (IBR, graduated,adjusted, etc.) plans: Use 0.5% ofloan balance. No set acreage limits. Must becommon for the area. No seasoning requirements(“flipped” properties allowed). Seller (or interested party)contributions. Not to exceed 6% ofsales price. Gift funds. No limit.
Single Family Home Loan GuaranteesWhat types of loan productsare available? Purchase existing or build new with theSingle-Close construction program. Current USDA Rural Developmentloan holders can take advantage oflower rates by utilizing one of RuralDevelopment’s refinance options. Interest rate is negotiated betweenthe applicant and the lender. Ratemust be a 30-year fixed rate. Program lending is extended to 100%of appraised value, not purchaseprice, so borrowers may potentiallyinclude closing costs and homerepair expenses into USDA financing. Funds may be used for closingcosts, reasonable and customaryexpenses associated with thepurchase transaction, connectionfees for utilities, tax and insuranceescrows, essential householdequipment, site preparation.How do we get started?Interested applicants can apply fora Section 502 Guaranteed Loanthrough any approved USDA RuralDevelopment lender. We encourageyou to contact your preferred lenderand ask if they are an approved lenderwith USDA Rural Development.What governs this program?What if I don’t qualify? 7 CFR part 3555 - This part setsforth policies for the Single FamilyHousing Guaranteed Loan Program(SFHGLP) administered byUSDA Rural Development. Itaddresses the requirements ofSection 502(h) of the Housing Actof 1949, as amended, and includespolicies regarding originating,servicing, holding, and liquidatingSFHGLP loans.USDA also offers a direct 502purchase program which providesfor subsidized payments for thoseapplicants from households with incomebelow 80% of MHI and who cannotqualify for a guaranteed loan. Interestedapplicants should contact their stateUSDA Rural Development office. HB-1-3555 - SFH Guaranteed LoanProgram Technical Handbook. Thishandbook provides Agency staffand lenders participating in theSingle Family Housing GuaranteedLoan Program with the tools neededto originate, underwrite, andservice guaranteed loans efficientlyand effectively.Tools and Resources:To determine Property and Incomeeligibility: elcomeAction.doWhy does the USDA RuralDevelopment do this?This program helps lenders workwith low- and moderate- incomefamilies living in rural areas tomake homeownership a reality.Providing affordable homeownershipopportunities promotes prosperity,which in turn creates thrivingcommunities and improves the qualityof life in rural areas.Who can answer questions?Applicants with questions shouldcontact an approved lender. Weencourage you to contact yourpreferred lender and ask if theyare an approved USDA RuralDevelopment Guaranteed lender.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 will find additional forms, resources, andprogram information at: rd.usda.gov. Go to the “Programs and Services” tab andthen select “Single Family Housing Programs.” USDA is an equal opportunityprovider, employer, and lender.August 2020
Together, America ProspersSingle Family Housing Repair Loans & GrantsWhat does thisprogram do?Also known as the Section504 Home Repair program, thisprovides loans to very-low-incomehomeowners to repair, improve,or modernize their homes orprovides grants to elderlyvery-low-income homeowners toremove health and safety hazards.What is an eligible area?Generally, rural areas with a populationless than 35,000 are eligible. Applicantsmay check the address of their hometo determine eligibility online.How may funds be used? Loans may be used to repair,improve, or modernize homes or toremove health and safety hazards. Grants must be used to removehealth and safety hazards.How much money can I get? If applicants can repay part, but notall of the costs, applicants may beoffered a loan and grant combination.Is there a deadline to apply?Applications are available year roundas long as funding is availableand are processed in the order theyare received.How long does an application take?Approval times depend on fundingavailability in your area. Talk to aUSDA home loan specialist in yourarea for help with the application. Maximum loan is 20,000.Who may applyfor this program? Maximum grant is 7,500. Loans and grants can be combinedfor up to 27,500 in assistance.To qualify, you must:What are the terms of the loanor grant? Be the homeowner and occupythe house Loans can be repaid over 20 years. Be unable to obtain affordablecredit elsewhere Full title service is required for loansof 7,500 or more. Have a family incomebelow 50 percent of the areamedian income Grants have a lifetime limit of 7,500. For grants, be age 62 or olderand not be able to repay arepair loan Loan interest rate is fixed at 1%.How do I get started?Contact a USDA home loan specialistin your area.What governs this program? The Housing Act of 1949 asamended, 7 CFR, Part 3550 HB-1-3550 - Direct Single FamilyHousing Loans and Grants FieldOffice Handbook Grants must be repaid if theproperty is sold in less than 3 years.NOTE: Because citations and other information may be subject to change,please always consult the program instructions listed in the section abovetitled “What Governs This Program?” You may also contact your local office forassistance. You will find additional forms, resources, and program information atrd.usda.gov. USDA is an equal opportunity provider, employer, and lender.Last Updated January 2020
Together, America ProspersMutual Self-Help Housing Technical Assistance GrantsWhat does thisprogram do?What is an eligible area?How do we get started?Applicants can check eligible areas ateligible addresses.Applications for this program areaccepted through our local officesyear round.Provides grants to qualifiedHow may funds be used?organizations to help them Give technical and supervisoryassistance to participating families.carry out local self-help housingconstruction projects. Grantrecipients supervise groupsof very-low- and low-incomeindividuals and families as theyconstruct their own homes in ruraleach other’s homes, with technicalassistance from the organizationoverseeing the project.Who may applyfor this program? Government nonprofitorganizations Contact your local office. Help other organizationsprovide self-help technical andsupervisory assistance.What governs this program? Recruit families, help them completeloan applications and carry out otherrelated activities that enable themto participate. Agency Instruction – 1944-Iareas. The group members providemost of the construction labor onWho can answer questions?Funds MAY NOT be used to: Hire people to perform constructionwork for participants. Buy real estate, building materials,or other property. Pay debts, expenses, or costs forthe participants. Pay for employee training. The Housing Act of 1949 asamended, 7 CFR 1944-IWhy does USDA Rural Developmentdo this?By working in partnership with trustedlocal organizations, this programhelps very-low- and low-incomefamilies get affordable, clean, andsafe homes of their own in rural areas.Very-low-income families living insubstandard housing are given firstpriority for loan assistance.Check Eligibility Pay other indirect costs. Contactyour local office for details. Federally recognized Tribes Private nonprofit organizationsNOTE: Because citations and other information may be subject to change,please always consult the program instructions listed in the section abovetitled “What Governs This Program?” You may also contact your local office forassistance. You will find additional forms, resources, and program information atrd.usda.gov. USDA is an equal opportunity provider, employer, and lender.Last Updated January 2020
Together, America ProspersHousing Preservation GrantsWhat does thisprogram do?It provides grants to sponsoringorganizations for the repairWhat is an eligible area?How do we get started?Areas that may be served include:Applications are accepted on anannual basis through a Notice ofFunding Availability (NOFA) in theFederal Register. Rural areas and towns with20,000 or fewer people –Check eligible addresses Federally recognized Tribal landsor rehabilitation of housingoccupied by low- andHow may funds be used?very-low-income (1) people. Applicants provide grants orlow-interest loans to repair orrehabilitate housing for low- andvery low-income (1) homeownersWho may applyfor this program? Most State and localgovernmental entities Nonprofit organizations Federally recognized Tribes Individual homeowners arenot eligible Rental property owners may alsoreceive assistance if they agree tomake units available to low- and verylow-income (1) families Eligible expenses include: Repairing or replacing electricalwiring, foundations, roofs,insulation, heating systems, andwater/waste disposal systems Handicap accessibility featuresWho can answer questions?Contact your RD State office.What governs this program? Code of Federal Regulation,7 CFR 1944-N RD Instruction 1944-N RD Instruction 1940-L, Methodologyand Formulas for Allocation ofLoan and Grant Program Funds RD Instruction 1940-G,Environmental Program RD Instruction 1901-E, Civil RightsCompliance Requirements This program is authorized byTitle V of the Housing Act of 1949 Labor and materials Administrative expenses For a complete list, seeCode of Federal Regulations(CFR) 1944.664NOTE: Because citations and other information may be subject to change,please always consult the program instructions listed in the section abovetitled “What Governs This Program?” You may also contact your local office forassistance. You will find additional forms, resources, and program information atrd.usda.gov. USDA is an equal opportunity provider, employer, and lender.Last Updated January 2020
Certified Loan Application PackagingRural Home Loans (Direct Program)Through the Single Family Housing Section 502 Direct Loan Program, USDA Rural Development provides affordable loansto eligible low- and very low-income applicants who wish to obtain modest housing in rural areas (visit the USDA Incomeand Property Eligibility website for details). One way parties seeking affordable homeownership may hear about thisprogram is through loan application packagers.What is a loan application packager?A loan application packager provides an optionalservice to parties seeking a housing loan by helping tonavigate the loan application process. A packager canhelp determine if the Section 502 Direct Loan Programis a good fit and, if so, help to assemble a complete loanapplication package. Generally, a fee is charged for theirservice. Packagers do not work for or represent RuralDevelopment.Rural Development supports partnerships with loanapplication packagers since they can provide outreachand be available in counties where there is not a localRural Development office. Packagers: Promote the program in underserved areas. Prescreen and counsel potential applicants onhow to improve their ability to qualify for a home. Ensure that applications are complete with allsupporting documentation needed for a decision. Give applicants insight into Rural Development’sapplication process and regulations.Are loan application packagers certifiedby Rural Development?Yes. In May 2016, Rural Development implementeda certified loan application packaging process thatimposes reasonable experience, training, structure,and performance requirements on the following threeparties involved in the certified packaging process:1. A Rural Development-certified loan applicationpackager employed by a qualified employer.2. A qualified employer; i.e., an affordable housingnonprofit, public agency, tribal housing authority, orState Housing Finance Agency (SHFA).3. A Rural Development-approved intermediary; i.e.,an affordable housing nonprofit, public agency, orSHFA approved by Rural Development to performquality assurance reviews on packages preparedby certified packagers through their qualifiedemployers.What experience is required?To be a Rural Development-certified loan applicationpackager, an individual must first have at least one yearof experience with affordable housing loan originationand/or affordable housing counseling.To be a Rural Development-approved intermediary, anentity must first have at least five years of verifiableexperience with our Single Family Housing Directprograms.What training is required?Certified loan application packagers and qualityassurance staff working for an intermediary mustcomplete a Rural Development approved loanapplication packaging course and successfully pass thecorresponding test.This three-day course reviews the Section 502 DirectLoan Program and its regulations; discusses theprogram’s application process in detail, includingborrower and property eligibility and underwritingrequirements; and reviews the roles and responsibilitiesof a certified packager, their qualified employer, anintermediary, and Rural Development staff.What steps should I take to become acertified loan application packager?Familiarize yourself with the certified packaging processby reading the related information found in 7 CFR3550.75 and Chapter 3 of Handbook-1-3550 (specificallyAttachment 3-A). If you meet the experiencerequirements and work for a qualified employer,you may contact a Rural Development-approvedintermediary in your state to discuss funnelingapplications through them.
Certified Loan Application PackagingRural Home Loans (Direct Program) Cont.How can an entity apply to be a RuralDevelopment-approved intermediary?Entities interested in becoming an intermediary mustfurnish sufficient documentation to demonstrate toRural Development’s satisfaction that they meet eachof the conditions specified in 7 CFR 3550.75(b)(3). SeeChapter 3 of Handbook-1-3550 (specifically Attachment3-A) for the list of documentation that constitutes anapplication.Please visit our Direct Loan Application Packagerswebpage to access training that has more details onhow to apply.Applications to be a Rural Development-approvedintermediary are welcome at any time and should beemailed to SFHDIRECTPROGRAM@wdc.usda.gov.How does working with an intermediarybenefit certified packagers and theirqualified employers?There are many benefits to working with a RuralDevelopment-approved intermediary. They include, butare not limited to: The quality assurance reviews conducted by theintermediary ensure that loan applicationpackages submitted to Rural Development arelikely to be determined eligible. The intermediary provides supplemental training,technical assistance, and support. The permissible packaging fee is up to 1,750.The fee is split between the intermediary and thecertified packager. When program funds are limited, loanapplications funneled through an intermediaryare given funding priority. Partnering with an entity that shares similarcommunity and housing mission-related goals.Can a packager and their employerchoose not to work with an intermediary?Under the certified packaging process, a certifiedpackager and their qualified employer can work withoutan intermediary once they have submitted a sufficientnumber of applications through the intermediary andhave exhibited an acceptable performance rating. Thisarrangement must be approved by the applicable RuralDevelopment State Director and supported by theintermediary.Keep in mind that certified packagers working withoutan intermediary have a lower permissible packaging feeand are not given funding priority.Where can I learn more?Additional information on the certified packagingprocess can be found in 7 CFR 3550.75 and Chapter 3 ofHandbook-1-3550, Attachment 3-A.NOTE: Because citations and other information may be subject to change please alwaysconsult 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
Intermediaries12345678910111213Organization Name(AgencyIdentification #)Federation ofAppalachian HousingEnterprises, Inc.(FAHE)(#50001)HomeOwnershipCenter, Inc.(#50020)Little DixieCommunity ActionAgency, Inc.(#50002)North EastCommunity ActionCorporation rWorksSouthern NewHampshire(#50006)Northwest RegionalHousingDevelopmentCorporation(#50008)Rural CommunityAssistanceCorporation (RCAC)(#50009)Rural UlsterPreservationCompany, Inc.(RUPCO)(#50019)SouthwestMinnesota HousingPartnership(#50021)The HousingAssistanceCorporation(#50018)The Housing Fund,Inc.(#50015)Tierra del SolHousing Corp(#50011)ContactNameContact aHolbrooktholbrook@hocwv.org304-636-9115,option , Kansas, Louisiana, Missouri,Nebraska, North Dakota, Oklahoma, SouthDakota, and TexasCarla Pottscpotts@necac.org573-324-6622Missouri, Illinois, PaulMcLaughlinpmclaughlin@nwsh.603-782-0536Vermont & New HampshireAna kansas & Puerto 2,ext. ka, Arizona, California, Colorado, Hawaii,Idaho, Montana, Nevada, New Mexico,Oregon, Utah, Washington, Western Pacificand WyomingNew YorkAli Joensalij@swmhp.org507-836-1605Minnesota and t. 104North Carolina615-515-2201Minnesota, North Dakota, Tennessee, andWisconsinartm@tdsch.org575-541-0477New Mexico and TexasAngelaBelcherArtMarrujoContact PhoneStates ServedAlabama, Delaware, Florida, Georgia, Indiana,Kentucky, Maryland, Michigan, Mississippi,New York, North Carolina, Ohio,Pennsylvania, South Carolina, Tennessee,Vermont, Virginia and West VirginiaWest Virginia
Intermediaries1415Organization Name(AgencyIdentification #)Virginia HousingDevelopmentAuthority (VHDA)(#50017)Wilson CommunityImprovementAssociation (WCIA)on behalf of TheNorth CarolinaCommunityEconomicDevelopment(NCCED) Network(#50012)Revision Date: 6/10/2020ContactNameContact PhoneContact emailStates VirginiaBarbaraBlackston252-243-4855,ext. 206blackston@wciainc.orgNorth Carolina
MAIN ll-programs/single-family-housing-programsDIRECT LOAN APPLICATION PACKAGER WEBSITE – Training materials,Resources, and es/services/direct-loan-application-packagers
OFFICE LOCATOR – Find your local Rural Development orELIGIBILITY WEBSITE – Applicants can use this tool to see what housingprograms may be a good ty/welcomeAction.do
HB-1-3555 - SFH Guaranteed Loan Program Technical Handbook. This handbook provides Agency staff and lenders participating in the Single Family Housing Guaranteed Loan Program with the tools needed to originate, underwrite, and service guaranteed loans efficiently and
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