Simplified income eligibility, asset rules ease USDA home loan process

FINDLAY – Changes coming to USDA Rural Development’s single family housing loan programs will help streamline the loan application process for low- and very-low income Ohioans considering rural homeownership.

“Soon, income eligibility, asset rules and area loan limits will be more clearly defined and easier to determine,” said Ohio Rural Development Housing Program Director Christie Hooks. “Our goal is to improve customers’ ease in applying. With fiscal year 2019 funds still available, now is a great time to look into USDA housing loans, which offer 100 percent financing with no down payment and no private mortgage insurance to qualified borrowers.”

Beginning immediately, USDA will use a two-tier income structure to determine eligibility for USDA single-family housing loans. The first category encompasses households of one- to four people, the second, five- to eight people. Additionally, certain types of assets – including retirement and education savings – may now be excluded when calculating an applicant’s ability to repay a loan.

Also, beginning Aug. 5, loan limits in USDA’s single-family housing programs will be determined using a percentage of the Federal Housing Administration’s loan limits. This methodology is intended to encourage financing new construction in addition to making loans on existing housing inventory.

The maximum mortgage limit for a USDA Rural Development direct home loan in Ohio ranges from $183,000 – $253,000. Because income limits vary by county and household size, applicants are encouraged to contact Ohio Rural Development in their specific area by calling 419-581-4488 or visiting and clicking through to “Single Family Housing Programs.”

The current interest rate for USDA Rural Development’s direct home loan program is 3.5 percent percent for a 33-year term. The direct loan program can be used to assist eligible rural Ohioans in buying an existing home, financing the construction costs of a new home, or making significant home repairs. The lower interest rate helps make monthly payments affordable, and often may be less than rent.

USDA Rural Development also offers a guaranteed home loan program with a typical income limit of $82,700 for a one- to four-person household, with no down payment required. Applicants work directly with their lenders to establish mortgage rates and terms.

Finally, loans, along with a limited number of grants, are available to help qualifying very-low income homeowners make needed repairs to their owner-occupied homes. The maximum loan amount for repairs is $20,000 at a 1 percent interest rate, repayable for up to 20 years. Grants of up to $7,500 are available to homeowners ages 62 and older, and must be used to remove health or safety hazards, such as fixing a leaking roof, installing indoor plumbing, or replacing a furnace.

Applicants are encouraged to contact USDA Ohio Rural Development now to take full advantage of all housing programs. The agency operates four area offices across the state: Findlay, Hillsboro, Marietta and Massillon.