PROGRAM OBJECTIVE:
To help eligible applicants purchase adequate housing with a guarantee from USDA Rural Development, which allows us to provide up to 102% financing without requiring mortgage insurance or a down payment.
ELIGIBILITY REQUIREMENTS FOR APPLICANTS:
- Be without adequate housing in the local commuting area
- Be unable to make a 20% down payment
- Be a U.S. citizen or have qualified alien status, and have legal capacity to incur the loan
- Will personally occupy the dwelling to be purchased
- The home to be purchased must be located in a town of less than 20,000 population or in a rural area
- Have acceptable credit history, including no prior loan losses with Rural Development. Exceptions can be made for certain credit history problems
- Have stable employment and dependable income to repay the loan
- Repayment ratios may not exceed 29% for PITI (monthly payment, taxes & insurance/Income) and 41% for Total Debt/Income
- Have an adjusted annual income that is within RD limits
PROGRAM HIGHLIGHTS:
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Mortgage insurance is not required with a GRH loan, providing substantial savings to applicants compared to conventional 95% or 97% loans with mortgage insurance. Depending on the loan amount, applicants can expect to save from $4,000 to $18,000 over the life of the loan!
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Loans may be made up to 102% of appraised value and may include normal closing costs provided the appraisal is higher than the sales price. The one-time, 2% Guarantee Fee may be financed above the appraised value. There is no limitation on the amount of contribution to closing costs or where it comes from; the seller, gift from relatives or soft second mortgage grant programs.
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No maximum loan amount: The amount of loan is limited only by repayment ratios and appraised value. Loans have a 30-year term at a competitive fixed interest rate. Typical loans vary from $40,000-$180,000.
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Loan Purposes: The principal purpose must be to buy an existing home or for new home construction. Funds can also be used for closing costs and/or repairs to existing homes, provided the appraised values improved will secure the total loan amount. An existing home loan cannot be refinanced unless it is already a Guaranteed or RD Direct loan, or interim financing for new construction/repairs.
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Homes that DO qualify: Existing homes must be structurally sound, adequate, and in a good state of repair. Existing homes need attic insulation equivalent to the R-30 factor, storm windows and doors (or modern multi-pane windows and insulated doors), access to the attic/crawlspace and must meet HUD handbook guidelines. New construction can be for stick-built or modular homes, according to National building codes and local codes as applicable.
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Homes that DO NOT qualify: Existing manufactured homes, homes with flat top roofs, homes in flood hazard areas, homes that are structurally unsound, or homes in towns greater than 20,000 population or in metro areas.
For more information regarding the Guaranteed Rural Housing Loans contact the Dodge City/Ford County Development Corporation at (620) 227-9501.