The Rural Housing Service is a name that you might not have heard before, although they are very active in the real estate market. As a division of the US Department of Agriculture, they offer a very helpful loan program, with their RHS loans being guaranteed by the government. This enables traditional lenders to offers these types of mortgages to those who qualify.
Looking for a loan? Live in a more rural area? Then consider applying for RHS loans. At California Mortgage Advisors, Inc. we understand how these programs work and are ready to advise you. You can apply online here or speak to one of our Mortgage Advisors now by calling (800) 927-6560.
Benefits Of Government Insured Mortgages:
With loans guaranteed by the Rural Housing Service, you are more likely to have lenders interested in financing your home mortgage. This is because the government agrees to pay if the homeowner should stop making the payments. This is also why you can get away without having to make a large down payment. Without 20 percent down, most lenders will insist on some form of mortgage insurance, which is often out of reach for many buyers.
With RHS loans, the Rural Housing Service essentially steps in and says they will take care of the mortgage insurance. This is done in the form of loan guarantees. Of course, the actual program offered to buyers will have specific requirements to be met.
General RHS Loans Qualifications:
The first major qualification that must be met in order to obtain a loan from the Rural Housing Service is that your home must be located in a rural area. Generally speaking, this means a town of not more than approximately 20,000 people, although there are a number of exceptions to this (check with us to see if your area qualifies).
There are also income qualifiers, since RHS loans are primarily developed to help lower and middle income buyers attain home ownership. This will mean that your income level cannot be more than 115 percent of median income of that particular area. The specific home you are looking to buy must be considered ‘modestly’ priced and your intention must be to use this home as a primary residence.
Unable To Qualify For Other Loans:
There are some credit qualifications as well. However, these are not hard and fast rules; even a bankruptcy or foreclosure will not automatically disqualify you from the Rural Housing Service loan program. Even still, it is very helpful if you have maintained a solid credit history and income level for at least the past year or so.
If you are accepted for one of these RHS Loans, you will not be required to make a down payment. In most cases, all of the closing costs can be rolled into the loan itself and financed. Since the mortgage comes with a guarantee from the Rural Housing Service, you won’t need to pay for any mortgage insurance, either.
Could one of these RHS loans be right for you? You can apply online here or speak to one of our Mortgage Advisors now by calling (800) 927-6560.