Traditional Lenders: MOO Over!

       

Nikolay and Marina, a Connecticut couple and parents of two, emigrated from the former Soviet Union and came to the United States. Today they are achieving the American dream with a little help from USDA Rural Development. As new citizens, Nikolay and Marina needed assistance navigating their way through the sometimes daunting process of American home buying as well as finding financial aid, to keep their monthly payments within their budget.

 

The USDA’s Windsor, Connecticut, Rural Development office assisted the family with a Single-Family Housing Direct Loan application. Nikolay and Marina were surprised to learn they also qualified for a subsidized interest rate of 1%, and Rural Development financed most of their closing costs. In addition, Rural Development was able to give them a thirty-three-year term that significantly reduced their monthly mortgage payments.

 

Today the family of four is thriving in its Marlborough, Connecticut, home.

 

Like Nikolay and Marina, you don’t have to be a farmer to be eligible for a USDA Rural Development home loan, and many communities in Southern New England that qualify for the agency’s program may surprise you.

 

USDA Rural Development, an agency within the United States Department of Agriculture, offers several useful housing programs that are available to low- to moderate-income households looking to purchase or construct a home in a rural area.

 

The USDA Rural Development Single-Family Housing Direct Loan Program is a subsidized housing program available in rural communities and small incorporated towns and cities, which usually means a town or city with a population of 10,000 or fewer but can sometimes include communities with higher populations. Under the program borrowers receive a loan directly from the federal government. The standard term for the loan is thirty-three years; however, in some cases loans may be made for up to thirty-eight years. Each loan is made at a fixed rate established by the agency, and payment subsidies are available to many income-eligible borrowers to reduce monthly loan payments. Subsidies are subject to recapture once the borrower no longer occupies the home.

 

USDA Rural Development also offers a Guaranteed Single-Family Housing Loan Program under which the USDA guarantees loans made by private sector lenders. A loan guarantee through USDA Rural Development means that if the individual borrower defaults on the loan and the lender suffers a loss, the USDA will pay a loss claim to the lender.

 

The purpose of the loan program is to enable eligible low- to moderate-income (up to 115% of the area median income) rural residents to acquire modestly priced housing for their own use as a primary residence. The program is available for the purchase of an existing or newly constructed dwelling.

 

There is no required down payment, but families must be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must be without adequate housing and be unable to obtain credit elsewhere; for example, unable to obtain the money for a down payment and/or unable to afford a conventional interest rate, yet applicants must have acceptable credit histories.

 

 

For more information or to speak to a loan specialist at USDA Rural Development, call 800-352-8015 or visit the Web site: www.rurdev.usda.gov/ma.

 

The USDA is an Equal Opportunity Lender, Provider, and Employer.