Guaranteed Rural Housing loans are government-insured mortgages offered to rural residents who're unable to acquire conventional loans through private lenders. These loans, which have enabled 40,000 (forty thousand) to 50,000 (fifty thousand) rural Americans to buy homes, are targeted towards low- and moderate-income home buyers and can be in the amount of up to 100 percent of the appraised value of a home. The Rural Housing Service, or RHS (R-H-S), who administers the loans, doesn't directly loan to eligible borrowers, but instead guarantees loans made by private lenders. This guarantee means that if you default on your loan, RHS will pay up to 90 percent of the loss to the lender. This plan is designed to reduce the risk for lenders, and encourage them to make loans to rural residents who have only modest incomes and little collateral. Guaranteed Rural Housing Loans generally have up to 30-year terms and are fixed rated at current market interest rates. The maximum amount you can borrow is determined by the Federal Housing Administration, or FHA (F-H-A), and is based on the area you're buying in. Borrowers may be responsible for closing costs, legal fees, and other pre-paid items. However, there is no required down payment and private mortgage insurance need not be purchased. To qualify, applicants must have acceptable credit histories, meet income limits, be without adequate housing, and be unable to obtain credit elsewhere. To apply for the loan, contact any RHS approved lender or your Rural Development State office.
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