United States Department of Agriculture (USDA) Rural Development operates a number of financial assistance programs with the goal of improving the economy and the overall quality of life in rural communities. This includes USDA Rural Development home loans either offered or guaranteed by the USDA. American Pacific Mortgage offers competitive rates and terms on Oregon USDA loans throughout Portland, Happy Valley, Damascus, Boring, and Gresham.
Both USDA direct and USDA guaranteed home loans are available to Oregon residents. The USDA Single Family Housing Guaranteed Loan Program is designed to accommodate low to moderate-income households. USDA approved lenders offer these mortgages directly to consumers and the USDA insures a portion of the loan. USDA Single Family Housing Direct Home Loans on the other hand are made directly by the government in the form of a subsidy. The direct loan program is available to both low and very-low income households. This is also commonly referred to as the Section 502 Direct Loan Program.
Oregon USDA Rural Development Single Family Housing Guaranteed Loan Program
The USDA Single Family Housing Guaranteed Loan Program creates opportunity for low to moderate-income households to purchase, build, or rehabilitate a home they can afford. Loans guaranteed by the USDA allow borrowers to finance 100 percent of the loan, offer exceptionally low interest rates, and allow closing costs to be financed into the loan. Applicants and the home being purchased will both need to meet certain requirements in order to be eligible for the USDA Guaranteed Loan Program.
- Household income cannot exceed 115 percent of the median income for the area.
- The home must be used as the family’s primary residence.
- The home must be located in an eligible Rural Development area and must meet all program criteria.
- Borrowers must have an acceptable credit history and be able to afford the mortgage payments, taxes, and mortgage insurance.
USDA guaranteed loans require two types of mortgage insurance. There will be an upfront fee of 2.75 percent of the purchase price as well as an annual premium. The annual premium is calculated at .5% of the annual mortgage balance, however it is paid in monthly installments.
Oregon USDA Rural Development Single Family Housing Direct Home Loans
The USDA Direct Loan Program provides payment assistance in the form of a subsidy to low and very-low income families. This program is geared towards families who are without safe and sanitary housing and who are unable to obtain traditional financing. The USDA defines low income as being between 50 and 80 percent of the area median income (AMI). Below 50 percent of the AMI is considered very-low income. Both applicants and the property being purchased must meet certain requirements to be eligible for the direct loan program as well.
- Applicants must be without safe and sanitary housing, unable to obtain a loan from other resources, and meet specific income requirements.
- The home must be used as the family’s primary residence.
- The home must be located in an eligible Oregon Rural Development area. It must be 2,000 square feet or less, not have a market value in excess of the applicable area loan limit, and not have an in-ground pool.
When a borrower no longer occupies the home, or the title is transferred, the subsidy must be repaid.
USDA Direct and USDA Guaranteed home loans can create opportunities for Oregon families to own decent homes when they find it difficult to obtain financing from alternative sources. At American Pacific Mortgage, it is our goal to make homeownership a reality for all families throughout Portland, Happy Valley, Damascus, Boring, and Gresham. For more information on Oregon USDA loans, contact us today.