USDA Guaranteed Rural Housing (RD) Financing
The USDA Guaranteed Rural Housing program (otherwise known as Rural Development or RD) was created to assist low to moderate income home buyers purchase housing in areas considered as rural by the US government. The great news for Arkansas borrowers is that many areas within the state considered suburban are actually considered rural by the government. This difference about rural vs. suburban offers many families significant benefits.
The RD loan program allows:
- 100% financing with minimal closing costs
- No down payment required on a typical purchase transaction
- Gift for down payment and closing costs allowed with certain limitations
- No post-closing reserves are required
- Seller can credit up to 6% of sales price towards buyers costs and loan related expenses
- Credit qualifying guidelines
- Minimum usable credit score of 640
- RD will allow a home purchase two years after a bankruptcy
- RD will allow a home purchase three years after a foreclosure
- Easier debt ratio and job requirement guidelines
- Debt-to-income ratios allowed up to 43% of monthly income
- Less than two years on the job is allowed
- Self-employed individuals are also eligible
- You do not have to be a first time buyer to obtain a RD loan; however, you may not own other real estate at the time of closing
