The USDA (U.S. Department of Agriculture) Rural Development program offers both direct and guaranteed loans in an effort to help low- to moderate-income individuals and families living in eligible rural communities. The mission of the USDA is to improve the quality of life throughout the nation's rural communities by financing home ownership, giving more Americans the opportunity to buy their own homes. In the last decade, Rural Development has invested tens of billions of dollars in small business and mortgage loans, foreclosure refinance and other rural community projects. You can stop foreclosure on your home by applying for a loan to refinance your mortgage debt.
Instructions
1. Contact your local Rural Development office for assistance if you have questions. In many cases, homeowners facing foreclosure will be approved for a loan to refinance a conventional home mortgage at a lower interest rate (see Resources below).
2. Schedule an appointment with an approved mortgage lender of your choice to talk about your situation. While the USDA guarantees the loan if you meet the requirements and do not exceed the income guidelines for an eligible property area, you will make your mortgage payments directly to the lender not to the USDA. If you, as the borrower, default on the loan, the USDA pays the lender.
3. Review the eligibility requirements with your lender. The home must be a residential property located in a rural eligible area, and you and your family must occupy the home as your primary residence. Although the USDA usually considers borrowers with lower credit scores than do traditional lenders, a borrower must be gainfully employed and show that he and/or she can afford the monthly household expenses, including the mortgage payment, property taxes, homeowner insurance, and utilities. The household income must not exceed the USDA income guidelines in your area.
4. Discuss the terms of the loan with the mortgage lender. You can reduce the amount of your monthly mortgage payments by inquiring about a 30-year fixed mortgage rate. No down payment will be required, as the USDA offers 100% financing. You can save even more money by refinancing through the USDA, as no mortgage insurance will be added to the monthly payments.
5. Complete the required application papers for refinance. Since the USDA offers loans up to 100 percent of the appraised value of the home, you may qualify for additional money to make needed home repairs and improvements. If you meet all the requirements, which qualify you for a loan, approval comes quickly.
Tags: Rural Development, income guidelines, loan refinance, meet requirements, mortgage lender
