The United States Department of Agriculture provides has different types of loan products for people with low or moderate income who want to renovate their home. There are different types of loans such as the single family direct home ownership loan, the single family guaranteed homeownership loan, the rural repair and rehabilitation loan or grant and the mutual self help loan. The terms and condition for all these differ from each other, but the common trait between these are all of them offering very low and attractive interest rates and there is no need of cash down payment. In order to qualify the person to whom the loan is being granted should have a decent past credit record.
How Does A USDA Rural Development Loan Work
The income limits for these loans vary from region to region and depends size of household. These loans are meant for owner occupied primary residences. The person should be a US citizen. The monthly payment should be 29% or less of monthly income. Other monthly debt payments should not exceed 41% of income. Applicants with credit score 620 or higher go through a smooth process. Individuals with scores below 580 have to face strict supporting standards.
The USDA also issues mortgages to those who are denied loans due to their level of income. Only those who do not have decent and safe housing with proper sanitation or are denied loans by traditional lending institutions are eligible for this. Metropolitan areas are not covered under this program while rural areas are always eligible.
Helping aspect.. waah:-
Single Family Direct Homeownership Loan helps low income households to do a repair job for their homes. To qualify the income should be less than 80 percent of the median income of that area. Also, they should not be having adequate household and should be able to afford the mortgage payments and insurance and tax expenses of the property and should be unable to get credit from another lending institution.
Single Family Guaranteed Housing Loan helps moderate income households to buy a moderate home in rural area. Criteria for qualifying for such loans are income cannot exceed 115 percent of the area wise median income, credit history should be reasonable, should be able to afford the mortgage payments along with tax and insurance payments. Interest rate for this loan varies and depends upon the lender.
State housing agencies can issue these loans. Rural Repair and Rehabilitation Loans and Grants these loans are mainly for low income people to improve their home and thus avoid health hazards and make the place safer. This also helps them to improve sanitary conditions of the homes. The income should be below 50 percent of the median income of the area. The households should not be capable of obtaining loans from anywhere else. The applicant should be 62 years or older.
Mutual Self-Help Loans help low income families to buy clean and safe homes or build the same. Income should be below 80 percent of median income of the area, should have inadequate housing facility and is incapable of getting loans from anywhere else.