Very Low to Moderate Income Housing Loans
To assist very low, low-income, and moderate-income households to obtain modest, decent, safe, and sanitary housing for use as a permanent residence in rural areas.
General information about this opportunity
Last Known Status
Agency: Department of Agriculture
Office: Rural Housing Service
Type(s) of Assistance Offered
DIRECT LOANS; GUARANTEED/INSURED LOANS
Housing Act of 1949.
Who is eligible to apply/benefit from this assistance?
Applicants must have very low-, low- or moderate incomes. Very low-income is defined as below 50 percent of the area median income (AMI); low-income is between 50 and 80 percent of AMI; moderate income is below 115 percent of AMI. Families must be without adequate housing, but able to afford the housing payments, including principal, interest, taxes, and insurance (PITI). Qualifying repayment ratios are 29 percent for PITI to 41 percent for total debt. In addition, applicants must be unable to obtain credit elsewhere, yet have an acceptable credit history.
Applicants must meet eligibility requirements. Guaranteed Loan Low and Moderale income eligible.
Applicants may need to submit evidence of inability to obtain credit elsewhere, verification of income, debts, and other information on the application; plans, specifications, and cost estimates. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.
What is the process for applying and being award this assistance?
Preapplication coordination is not applicable. An environmental impact assessment is required for this program. This program is excluded from coverage under E.O. 12372.
This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. For direct loans, application is made at the Rural Development field office serving the county where the dwelling is or will be located. For guaranteed loans, application is made to a participating private lender.
Rural Development field offices have authority to approve most Direct loan requests. Processing of guaranteed loans varies in each State. Consult your local telephone directory under U.S. Department of Agriculture for a Rural Development field office listing or visit the website http://offices.sc.egov.usda.gov/lcoator/app for a State Office listing. If no backlog exists, decisions on direct loan applications are made within 30 to 60 days. Requests for guarantee loans are acted upon in 3 days of receipt of the lender's request for guarantee.
Approval/Disapproval Decision Time
For direct loans, from 30 to 60 days subject to availability of funds, from the time the application is filed if no backlog of applications exists. A 'pre-qualification' may be provided to potential direct loan applicants upon call or visit to a Rural Development office, though results are not binding. For guarantees, a decision is required within 3 days of loan package submission by the approved lender.
Agency regulations providing customers with the rights for an informal review, mediation or alternative dispute resolution (ADR), or appeal to the National Appeals Division (NAD) are contained in 7 CFR Part 3550. NAD regulations are found at 7 CFR Part 11. Requests for an informal review, mediation and ADR must be received within 30 days from the date of the adverse decision. Requests for an appeal to NAD must be received within 30 days of receipt of the adverse decision.
Applicants may reapply at any time.
How are proposals selected?
How may assistance be used?
Direct and guaranteed loans may be used to buy, build, or improve the applicant's permanent residence. New manufactured homes may be financed when they are on a permanent site, purchased from an approved dealer or contractor, and meet certain other requirements. Under very limited circumstances, homes may be re-financed with direct loans. Dwellings financed must be modest, decent, safe, and sanitary. The value of a home financed with a direct loan may not exceed the area limit. The property must be located in an eligible rural area. Assistance is available in the States, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of Northern Mariana's, and the Trust Territories of the Pacific Islands. Applicants must have very low-, low- or moderate incomes. Very low-income is defined as below 50 percent of the area median income (AMI); low-income is between 50 and 80 percent of AMI; moderate income is below 115 percent of AMI. Families must be without adequate housing, but able to afford the housing payments, including principal, interest, taxes, and insurance (PITI). Qualifying repayment ratios are 29 percent for PITI to 41 percent for total debt. In addition, applicants must be unable to obtain credit elsewhere, yet have an acceptable credit history. The property must be located in an eligible rural area. Direct loans are made at the interest rate specified in RD Instruction 440.1, Exhibit B (available in any Rural Development local office), and are repaid over 33 years or 38 years for applicants whose adjusted annual income does not exceed 60 percent of the area median income, if necessary to show repayment ability. Payment assistance is granted on direct loans to reduce the installment to an "effective interest rate" as low as one percent, depending on adjusted family income. Payment assistance is subject to recapture by the government when the customer no longer resides in the dwelling. There is no funding provided for deferred mortgage authority or loans for deferred mortgage assumptions. Guaranteed loans may be made to refinance either existing RD Guaranteed Housing loans or RHS Section 502 Direct Housing loans. Guaranteed loans are amortized over 30 years. The interest rate is negotiated with the lender.
What are the requirements after being awarded this opportunity?
Borrowers receiving a payment subsidy must submit verification of household income annually for recalculation of benefits. No cash reports are required. Borrowers are not required to, but should retain copies of loan-related documents. No expenditure reports are required. No performance monitoring is required.
No audits are required for this program.
No Data Available.
Other Assistance Considerations
Formula and Matching Requirements
This program has no statutory formula.
Matching Requirements: This program has no matching requirements. A basic formula is used to allocate program funds to various States. The criteria used in the basic formula include the States percentage of the National: Number of rural occupied substandard units, rural population, rural population in places of less than 2,500 population, number of rural households between 50 and 80 percent of the area median income, and number of rural households below 50 percent of the area median income. The data source for each of these criteria is based on the latest census data available.
MOE requirements are not applicable to this program.
Length and Time Phasing of Assistance
This assistance is available throughout the year by means of quarterly allocations. Funds may be disbursed at loan closing or deposited in a supervised bank account for purchase of a building site, and purchase or repair of a dwelling, or in multiple advances for construction. For guaranteed loans, funds are disbursed after all work is complete. Applications for direct loans far exceed available funding. There is generally a waiting list for direct loan funding. Method of awarding/releasing assistance: quarterly.
Who do I contact about this opportunity?
Regional or Local Office
See Regional Agency Offices. Consult your local telephone directory under U.S. Department of Agriculture for a Rural Development field office listing or visit the website http://offices.sc.egov.usda.gov/locator/app for a State Office listing.
Myron L. Wooden, 1400 Independence Avenue, SW, Washington, District of Columbia 20250 Email: Myron.Wooden@wdc.usda.gov
Phone: (804) 287-1559
(Direct Loans) FY 14 $808,100,709; FY 15 est $900,000,000; and FY 16 est $900,000,000 - Fiscal Year 2016 figures are based on the President's proposed budget. (Guaranteed/Insured Loans) FY 14 $19,051,253,068; FY 15 est $18,772,823,700; and FY 16 est $20,000,000,000
Range and Average of Financial Assistance
FY 13 Average: 502 Direct Loans ($118,122), Guaranteed Loans ($137,381)
FY 14 Average: 502 Direct Loans ($121,479), Guaranteed Loans ($136,828)
FY 15 Average: 502 Direct Loans ($125,226), Guaranteed Loans ($136,360)
FY 16 Avergae: 502 Direct Loans ($125,348), Guranteedd Loans ($136,986)
Average loan amounts for FY 15 and FY 16 are estimates.
Loans in high cost areas may be higher.
Regulations, Guidelines and Literature
7 CFR Part 3550 "Direct Single Family Housing Loans and Grants." For guaranteed loans, 7-CFR Part 3555 "Guaranteed Rural Housing Program"
Examples of Funded Projects