Program Description

This program assists low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant's repayment ability.

General Program Requirements

A number of factors are considered when determining an applicant's eligibility for Single Family Direct Home Loans. At a minimum, applicants interested in obtaining a direct loan must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house and they must demonstrate a willingness and ability to repay debt.

Applicants must:

  • Be without decent, safe and sanitary housing
  • Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet
  • Agree to occupy the property as your primary residence
  • Have the legal capacity to incur a loan obligation
  • Meet citizenship or eligible noncitizen requirements
  • Not be suspended or debarred from participation in federal programs

Properties financed with direct loan funds must:

  • Generally be 1,800 square feet or less
  • Not have market value in excess of the applicable area loan limit
  • Not have in-ground swimming pools
  • Not be designed for income producing activities

Borrowers are required to repay all or a portion of the payment subsidy received over the life of the loan when the title to the property transfers or the borrower is no longer living in the dwelling.

Applicants must meet income eligibility for a direct loan.

What is an eligible area?
Generally, rural areas with a population less than 35,000 are eligible. Visit the USDA Income and Property Eligibility website for complete details.

How may funds be used?
Loan funds may be used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

How much may I borrow?
The maximum loan amount an applicant may qualify for will depend on the applicant's repayment ability. The applicant's ability to repay a loan considers various factors such as income, debts, assets and the amount of payment assistance applicants may be eligible to receive. Regardless of repayment ability, applicants may never borrow more than the Area's Loan Limits (plus certain costs allowed to be financed) for the county in which the property is located.

What is the interest rate and payback period?

  • Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower
  • Interest rate when modified by payment assistance, can be as low as 1%
  • Up to 33 year payback period - 38 year payback period for very low income applicants who can't afford the 33 year loan term

How much down payment is required?
No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets

Your Next Steps

The following information will lead you to the next steps to apply for this program.

Application Process

Applications for this program are accepted through your local RD office year round.

Processing times vary depending on funding availability and program demand in the area in which an applicant is interested in buying and completeness of the application package.

To apply for this program, please contact the state or local office in your area.

Program Contact Information

Tedd Buelow
Native American Coordinator
Tedd.Buelow@wdc.usda.gov
720-544-2911
http://www.rd.usda.gov/

Additional Information

Catalog of Federal Domestic Assistance (CFDA) Number10.41
Current Method of Tribal EligibilityProgram not specific to American Indians and Alaska Natives, but they are eligible
Can the funding from the program be renewedNo
Funding TypeDiscretionary
Matching Funds RequiredNo
Number of People Served by this Program (Approximate)7,060 Families Served in Fiscal Year 2015
Length of ProgramAnnual Appropriation
Recurring Base Funding for TribesNo
Tribes Funded by this ProgramNo limits on American Indian and Alaska Native tribes or tribal organizations receiving funding

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