The borrower must meet specific income guidelines to qualify for a RD mortgage:

The Guaranteed Housing Loan caters to the average income borrower. Applicants can have an income of up to 115% of the median income for the area.

Credit Requirements

Guaranteed Housing Loans are subject to the credit and income requirements of both the lender and the USDA. Most lenders want their borrowers to have at least a 620 score with no foreclosures, bankruptcies or major delinquencies in the past several or more years. All applicants must present a decent credit history, demonstrating the ability to pay mortgage, including taxes and insurance, on time each month.

Loan Terms

Guaranteed Loans are fixed at 30-years, but will have a 15 year option beginning in September of 2014. With the 502 Guaranteed Loan, your USDA-approved lender determines your interest rate, not the USDA.

Direct Loans have a repayment option of 33 years and 38 years - 33 years for borrowers with an income above 60 percent of AMI. Manufactured are subject to 30-year term loans. The government (HCFP) set's the interest rate. The interest rate can be predetermined if the borrower uses the payment assistance subsidy.

The Guaranteed Loan Program benefits:

• 100% financing
• Guarantee Fee rolled into the loan amount (102 percent financing)
• No maximum purchase price. A person's income and debt-to-income ratio will determine the logical home price.
• Many Property Types Allowed, including new and existing homes, modular homes, Planned Unit Developments (PUD), condominiums and brand-new manufactured homes.
• Closing costs and lender fees can be rolled into the loan.
• Gifted Funds, Grants, Mortgage Credit Certificates (MCC's) and Seller Concessions accepted.

The Direct Housing Loan is for very low to low-income families. An income below 50 percent of the area median income is considered very low, while low sits between 50 and 80 percent.  . Direct Loans have a repayment option of 33 years and 38 years - 33 years for borrowers with an income above 60 percent of AMI. Manufactured are subject to 30-year term loans. The government (HCFP) set's the interest rate. The interest rate can be predetermined if the borrower uses the payment assistance subsidy. The government funds these loans directly.