USDA RURAL DEVELOPMENT LOWERS MANUFACTURED HOME INTEREST RATE TO 3% WITH ZERO DOWNPAYMENT
U.S. Department of Agriculture Rural Development (USDA) recently announced that the interest rate of Single-Family Housing Direct 502 loans will fall to 3 percent effective November 1, 2019. The loan is intended to help low and very low-income applicants to purchase existing homes, build new homes or install manufactured homes, according to a report by Abilene Reporter-News.
The Direct 502 loan does not require a downpayment or private mortgage insurance and has a fixed rate with a term of 33 to 38 years or 30 years for manufactured housing. There are no limitations on seller concessions and no prepayment penalties.
Applicants must have adequate and dependable income and acceptable credit, but waivers are sometimes available. Some applicants may qualify for benefits to reduce payments to the equivalent to 1 percent interest.
The following is a brief listing of other generally selected Direct 502 eligibility requirements. It is important that you visit the USDA website in your state for a comprehensive understanding of how the program is implemented in your state and locality.
Who may apply for this program?
A number of factors are considered when determining an applicant’s eligibility. At a minimum, applicants interested in obtaining a direct loan must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house or install a manufactured home and they must demonstrate a willingness and ability to repay debt.
- Be without decent, safe and sanitary housing
- Be unable to obtain a loan from other sources on terms and conditions that can reasonably be expected to meet.
- Agree to occupy the property as your primary residence.
- Have the legal capacity to incur a loan obligation.
- Neet citizenship or eligible noncitizen requirements.
- Not be suspended or debarred from participation in federal programs.
Properties financed with direct loan funds must:
- Generally be 2,000 square feet or less.
- Not have market value in excess of the applicable loan limit.
- Not have in-ground swimming pools.
- Not to be designed for income-producing activities.
What is an eligible area?
Generally, rural areas with a population of less than 35,000 are eligible. Visit the USDA Income and Property Eligibility website for complete details and possible exceptions.
Why does USDA Rural Development do this?
USDA Rural Development’s Section 502 Direct Loan Program provides a path to homeownership for low – and very low-income families living in rural areas, and families who truly have no other way to make affordable homeownership a reality. Providing these affordable homeownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.
To obtain complete information and additional qualification and eligibility requirements you should access the USDA web-site Single Family Housing Direct Home Loans or contact your local Rural Development office year-round.