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USDA funding available for home purchases & repairs

March 18, 2014

in National

usda-logoSara Bax, area specialist with the USDA Rural Development Sedalia Office, has announced that funding is now available for all Rural Development Housing Programs. The Sedalia office serves Benton, Cooper, Howard, Johnson, Morgan and Pettis Counties.

Many individuals have a dream of someday owning their own home. USDA Rural Development is able to make that iconic American Dream a reality for so many families in rural Missouri. USDA Rural Development is also able to assist those individuals that already own their homes with needed home repairs.

Rural Development offers three single-family housing programs—the 504 Home Repair Loan and Grant Program, the 502 Direct Housing Loan Program, and the Guaranteed Housing Loan Program.

504 Home Repair Loan and Grant Program

Grant and one percent loan funds are for essential repairs needed to make homes safe and sanitary and to remove health and safety hazards. Most repairs completed under the program are for roof, siding, window and door replacement, electrical repairs, furnace or air conditioning replacement, and other repairs needed to keep the home livable.

To qualify for the program applicants must own and occupy the home and have an income within Rural Development guidelines. Homeowners must be age 62 or older to qualify for a grant. One percent loans are repaid on a 10-20 year term and require monthly payments.

Grant funding is limited and many times repairs will be funded with a combination of a loan and grant. The program paperwork is relatively simple for applicants with no initial cost involved. Work will be completed by a contractor of the applicant’s choosing. Those interested in the program are encouraged to contact the USDA Rural Development office for specifics on all the eligibility criteria.

502 Direct Housing Loan Program

Through Rural Development’s Direct Housing Loan Program, applicants may obtain 100% financing to purchase a home. Applications are made directly to a Rural Development office.

The purpose of the loan is to provide financing at reasonable rates and terms with no down payment. The current interest rate is 4% which is on a fixed 33-year term. Some buyers may also qualify for payment assistance which may reduce the effective interest rate, thus reducing the monthly payment. This payment assistance benefit has the potential of making the monthly payments less than rent payments for some applicants. Real estate taxes and insurance are escrowed as part of the monthly payment and some or all of the closing costs may even be able to be included in the loan. Eligible applicants can purchase an existing dwelling, purchase a site and construct a dwelling, or purchase a newly constructed dwelling.

Eligibility for this program is to individuals or families who meet certain criteria. Some of the criteria include: be a U.S. citizen, use the home to be purchased as the primary residence, be of legal age to incur a loan obligation, meet income guidelines for the county that they wish to live in, have good credit history, and have repayment ability for the home that they wish to purchase. Those interested in the program are encouraged to contact the USDA Rural Development office for specifics on all the eligibility criteria.

Guaranteed Housing Loan Program

For those applicants that exceed the income limits of the 502 Direct Loan Program, a Guaranteed Housing Loan may be an option. Applicants may have an income of up to 115% of the median income for the area. These loans are made by approved local lenders and Rural Development guarantees the loan to the lender. Loans have a 30-year term with interest rates determined by the lender. There is no required down payment and some or all of the closing costs may be able to be included in the loan. Applicants must be able to afford mortgage payments, including taxes and insurance, and have reasonable credit histories.

Further information on these housing programs or other Rural Development programs is available by visiting USDA Rural Development’s web site at http://www.rurdev.usda.gov/mo or by contacting Sara Bax at the Sedalia Rural Development office, 1407 W 32nd Street, Sedalia, Mo., 65301; by phone at (660) 826-3339, Ext. 4; or by email at sara.bax @mo.usda.gov.

Availability and use of USDA Rural Development funding is another reminder of the importance of USDA programs from rural America. Agriculture Secretary Tom Vilsack stresses that a comprehensive new Food, Farm and Jobs Bill would further expand the rural economy. He said that’s just one reason why Congress must get a comprehensive Food, Farm and Jobs Bill done as soon as possible.

President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities. Under the President’s leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America’s economy, small towns and rural communities. USDA’s investments in rural communities support the rural way of life that stands as the backbone of our American values.

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