In the past few years the United States Department of Agriculture (USDA) has set a goal of building up rural development. Implemented in 2009, The American Recovery and Reinvestment Act (ARRA) set its sights on tackling this issue by setting several goals. These goals were simple, and aimed to increase home ownership in rural areas, improve the quality of life for its inhabitants and create and/or save jobs. In order to achieve their goals, the Recovery Act has been charged with deploying recovery funds that when implemented would deliver more than $20 billion in loans awarded to accomplish the following:
- Building high-speed broadband infrastructure
- Constructing or improving rural water and waste disposal systems
- Building critical community facilities such as hospitals and community centers
- Financing homes for rural families
There are several program-specific plans for helping individuals and families purchase homes, and the Single Family Housing (SFH) provides 100% financing to customers in rural areas. These rural areas are defined as locations with a population no higher than 10,000 residents, if located outside of a metropolitan area. The financing from these loans can be used for several housing development purposes, including building, repairing, renovating or even relocating a home. This can also include providing water and sewage facilities to your location. Not everyone is eligible for this loan type but there are several key benefits to a SFH, including:
- No down payment: USDA Mortgages require a zero down payment when purchasing a home
- Low Mortgage insurance: Reduced requirement of monthly private mortgage insurance compared to other loan programs(assists borrowers in keeping payments low compared to other loan types)
- Competitive Rates & Closing Costs: Guaranteed by the USDA, results in lenders offering competitive Interest rates. Allows sellers and other interested parties to assist with buyers closing costs.
As mentioned above, there are eligibility requirements for USDA Rural Housing Programs. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance (typically 24% of applicant’s income). Payment subsidy is available to applicants to enhance repayment ability, and applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories. To find out more information on whether your property is eligible, please visit the USDA site here. Integrity Financial is also available to speak with you directly about USDA Rural Housing loans and assist you through each step of the process. Give us a call today at 1-877-760-9854 to find out more information.