USDA Direct Home Loan Program Funds

The following News Release is from the Georgia USDA Rural Development State Office. It is about the Direct loan program and it's funding availability.  It is a great program.  Even though this is from Georgia, all states have this program and abundant funding.

News Release

Funds for direct home loan programs available through Sept. 30

Time is running out for Georgia families who want to take advantage of over $21 million in Recovery Act and regular funding to become homeowners in rural Georgia through USDA Rural Development’s direct loan program. Recovery act funds will no longer be available after September 30, 2010.

USDA Rural Development has two home loan programs, the direct and the guaranteed. Direct loans, are made directly by the agency to qualified home buyers. The guaranteed program – which allows the government to partner with local lenders - is so popular that all funds have been exhausted for FY2010. Funds for the guaranteed program should be available on or after Oct. 1 as part of FY2011 funding, but may be available sooner.

The good news about the direct program is not only that funding remains, but that the interest rates will drop to 4.625 percent on July 1, 2010 for a 33 year mortgage.

“This program has very good terms for low and very low families ready to become homeowners,” said Shirley Sherrod, state director of USDA Rural Development. “We want these funds spent in Georgia, so we need people to apply now.”

To qualify, Georgians must have low or very low dependable income; have good credit and debt level to show repayment of the loan. And the houses must be in eligible rural areas.

The low and very low designation is based on Median Household Income for each county, as well as how many people are living in the house. Loans are also for rural areas only, so urban areas are not eligible. To check your income or the house address, visit: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do. Use the panel on the left to navigate.

“We would like to see more applications,” Sherrod said. “We know a lot of people are hurting and there is a lot of fear because of the economy. But this program is designed to protect the families and the mortgage payment is often less than rent. It doesn’t take long to find out if it’s a possibility.”

“We can run a pre-qualification and know pretty quickly whether or not the person will qualify,” said Ed Peace, director of single family housing programs. “We would like to use this money to help Georgia families. But all of these funds will go away on September 30, 2010.”

For Prequalification forms, visit this website http://www.rurdev.usda.gov/ga/SFH-prequal.htm and follow the instructions for faxing the information to our state office for processing.

Once a family becomes a Rural Development homeowner through this program, there are many built in features that can help them become successful, despite life’s ups and downs.

"This program can help with a payment subsidy," Peace said. “If someone loses their job, some payments may be deferred and rolled into the end of the loan. This program is structured to help low income families, who may experience more financial instability.”

Rural Development has offices around the state. To locate the one closest to you, visit http://www.rurdev.usda.gov/ga and go to the Other Information tab and select Office Locator. Offices are open weekdays between 8 a.m. – 4:30 p.m.

"Many people think it isn’t possible. They think they can’t afford it,” Peace said. “But our terms are very reasonable. We will do everything we can to help someone become a successful homeowner if they are really motivated. We can help people that otherwise couldn't get a loan and who would be trapped renting or living with relatives."

Families who have benefited from USDA Rural Development's housing programs include young couples, single parents, older citizens, people on disability, and minority families, among others. In some cases, families who didn’t qualify the first time can often come back and qualify the second or third time. Funds can be used to purchase an existing home or a new one.

“Sometimes people have a credit problem and we can tell them what they need to do to fix the problem,” said Peace. “We try very hard to work with people and if they’re determined and willing to do what it takes, we very often happily present the keys to their new home in the end.”

"The entire community benefits from increased numbers of homeowners," Sherrod said. "When people buy a home, they are making a commitment to the community, settling down, and paying property taxes. They live and work in the area and are paying for local goods and services. It's a win-win situation."

Although regular funding will be available, the Stimulus Funds are unprecedented, providing an opportunity for more families to become homeowners.

End News Release

If you want more information about the qualification requirements please visit: USDA Direct Home Loan Guidelines