USDA Rural Housing Loans – Up to 100%

USDA Loans in Northern Ky, Cincinnati, Cold Springs, Fort Thomas

What is USDA Rural Development Guarantee?

USDA Rural Development Guarantee (RDG) USDA loans offer 100% financing options on home purchases in rural areas.  Properties though can be located within city limits and in subdivisions depending on population density of that area.

The RDG loan program is primarily used to help low to moderate income individuals or households to purchase homes and the applicants need to be within 115% of the median income for the area.

Some highlights of the RDG loan program are:

  • 100% financing on purchases and 100% RD to RD refinances (at Polaris Home Funding)
  • Low 30 year fixed rates
  • No monthly mortgage insurance, just a small Rural Housing monthly guarantee fee
  • Upfront Rural Housing funding fee of 2% of the loan amount and is financed into new loan
  • Minimum credit scores of 620, but helpful to have 640 and get an automated underwriting approval thru Rural Housing’s underwriting engine – GUS
  • No rental verification needed with GUS approval
  • Flexible trade line requirements with GUS approval
  • No foreclosures in the last 24 months, but need explanation if < 36 months
  • Bankruptcy discharged at least 24 months

For a RD property and income eligibility search, please click HERE.

Issues to avoid or be aware of with Rural Housing property search:

  • Avoid homes in flood zones – RD is very restrictive for homes in flood zones
  • Avoid homes with cisterns – they are extremely difficult to get financed
  • Be aware that homes with wells and septic systems needed extra tests for contamination
  • Avoid homes with any income producing activities such as working farms, detached buildings with offices or car lifts for auto repairs, or anything else related to income producing activities.