“Rural Housing” in America, falls under the jurisdiction of the United States Department of Agriculture (USDA). There are other agencies and programs designed to assist in housing, but these agencies are not limited to or specialize in rural areas. Whereas the USDA is limited to what is defined as a rural area. When the USDA was founded rural referred to farm only and farming communities and did not even extend to the small towns surrounding the farming area. The USDA assisted farmers with everything from education to technology to crop reports and weather reports. As time passed the agencies responsibilities grew as did farming. With time, the agency became responsibility for all farming areas, which were called rural areas.
As cities grew and towns bloomed across the country, the enveloped and changed the face of farming and the agency redefined the term “rural” to be based on population size and proximity to a metropolitan area. Again with the growth of the country, and more and more cities and towns, popping up all over and our new mobile society, size and proximity were no longer good definitions.
Today’s concept of “rural housing and rural development” is communities that are outside of metropolitan area and are not part of an urbanized zone. So rural areas are what are left out.
If you are fortunate to find your home in one of these rural communities, you have one more way to secure a home loan. USDA loans are designed to help low to moderate income homebuyers, who have little to no down payment.
The USDA offers two types of programs, they have direct loans, which means that the agency lends you the money for your purchase directly and your mortgage is to the agency. The other and most common is the USDA loan guarantee program. THz program issues a guarantee to the lender that the agency will protect them from a loss if you do not pay your mortgage. The loan guarantee is a simple insurance policy given to the bank or mortgage lender. The buyer then deals directly with the lender, to determine the type of loan, interest rate and payment agreement. The bank has certain qualifications they are required to make sure the buyer meets. These are primarily to make sure that the buyer can afford to make the monthly payment.
Regardless of the type of loan that you qualify for under the USDA program, these are the best loan programs our government offers. If you have find that the home you are looking to purchase is in a rural designated area, find out if you qualify for these loan programs, and take advantage of them.