Together, America Prospers

Single Family Home Loan Guarantees

What does this 

program do?

This program helps approved 

lenders make 100 percent-financed, 

no-money-down mortgage loans 

to eligible low- and moderateincome applicants. 

Backed by USDA Rural 

Development, the 90 percent 

loan note guarantee encourages 

lender participation by helping 

them minimize risk. 

With a Single Family Housing 

Guaranteed Loan, applicants can 

buy an existing home (including 

the cost of rehabilitating, 

improving, or relocating the 

dwelling) or they can build 

new. The home must be used 

as their primary residence, and 

must be modest, decent, safe, 

and sanitary. 

This program is not restricted to 

first-time home buyers. 

Who can apply?

Applicants must:

• Have a household income that

does not exceed 115 percent of

the median household income

of the area in which the eligible

house is located (information about

income limits is available at this link:

https://go.usa.gov/xzwRp - PDF)

• Agree to occupy the dwelling as

their primary residence

• Be a U.S. citizen, U.S. non-citizen

national, or qualified alien as defined

in Public Law 104 - 193, Subtitle A,

Sections 401 - 404, available at this

link: https://go.usa.gov/xtduS

• Be unable to get conventional

financing with no private mortgage

insurance (PMI)

• Not be suspended or debarred from

participation in federal programs

What types of properties 

are eligible?

• Must be located in an eligible

rural area (a property eligibility

map is available at this link:

https://go.usa.gov/xtdJj)

• Must be a single-family dwelling

(this includes detached, attached,

Planned Urban Development (PUD),

condominiums, modular, and

manufactured homes)

• Existing dwellings must meet U.S.

Housing and Urban Development

(HUD) standards found in its Single

Family Housing Policy Handbook

4000.1 (available at this link:

https://go.usa.gov/xtdSt)

• There is no set maximum purchase

price. Loans are based on an

applicant’s repayment ability

• There are no set acreage limits,

although acreage must be

considered common for the area

• There are no “seasoning”

requirements. This means that,

provided they are otherwise eligible,

“flipped” properties are allowed

What are some primary 

applicant qualifications?

• Income: Borrowers must demonstrate

stable and dependable income for

repayment qualification. Minimum

income history requirements depend

on the income source.

• Assets: No down payment or

reserves are required.

• Credit: Although there is no set credit 

score requirement, applicants must 

demonstrate a willingness and ability 

to repay debts. Lenders can assess 

alternative credit for applicants with 

no traditional credit.

• Monthly housing payment: Adjusting

for eligible compensation factors, total 

payment (principal, interest, taxes, 

insurance, Home Owners'

Association dues, and Rural

Development's annual fee)

cannot exceed 29 percent of the

applicant(s) gross monthly income.

• All monthly debt payments shown on 

the applicant(s) credit report

- including the proposed new

mortgage payment - cannot exceed

41 percent of the applicant(s) gross 

monthly income, adjusting for eligible 

compensating factors.

• Seller (or interested party)

contributions cannot exceed

6 percent of the sales price.

• There is no limit on the amount of gift 

funds an applicant can use.
Single Family Home Loan Guarantees

How are the loans structured, and 

how can funds be used?

• Eligible buyers can purchase an

existing, eligible dwelling, or build

new using the USDA Combination

Construction-to-Permanent (Single

Close) Loan Program (available at this

link: https://go.usa.gov/xtfbe (PDF).

• Current USDA Rural Development

borrowers can take advantage

of lower rates by using one

of RD's refinance options.

Information is available at this link:

https://go.usa.gov/xzwQC (PDF)

• The interest rate is negotiated

between the applicant and the

lender, and must be a 30-year

fixed rate.

• Program lending extends to

100 percent of the property’s

appraised value, not the purchase

price. Thus, borrowers potentially

can include closing costs and home

repair expenses into the financing.

• In addition to closing costs and

eligible repairs, funds can be used

for reasonable and customary

expenses associated with the

purchase, including items such

as utilities connection fees, tax

and insurance escrows, essential

household equipment, and

site preparation.

How do we get started?

Interested applicants must work 

directly with approved USDA Rural 

Development lenders. A statebased list is available at this link: 

https://go.usa.gov/xtfjV (PDF).

Who can answer questions?

Any approved lender can 

answer questions. A state-based 

list is available at this link: 

https://go.usa.gov/xtfjV (PDF).

If you are interested in becoming 

an approved lender, email: 

sfhgld.lenderpartner@usda.gov.

What governs this program?

• 7 CFR part 3555 (available at this

link: https://go.usa.gov/xtfD7) sets

forth policies for the USDA Rural

Development Single Family Housing

Guaranteed Loan Program.

• HB-1-3555 (available at this link:

https://go.usa.gov/xtfDM (PDF) - the

Single Family Housing Guaranteed

Loan Program Technical Handbook

- provides Rural Development staff

and participating, approved lenders

the tools needed to effectively and

efficiently originate, underwrite, and

service loans.

Why does USDA Rural Development 

do this?

This program encourages approved 

lenders to partner with low- and 

moderate-income families in eligible 

rural areas to make homeownership a 

reality. In turn, this promotes prosperity, 

creating thriving communities and 

improving rural quality of life. 

What other options are available?

USDA Rural Development also 

offers a Single Family Housing 

Direct loan program (available at 

this link: https://go.usa.gov/xtfW8) 

that provides payment assistance to 

qualified applicants from households 

with incomes below 80 percent of the 

Median Household Income (MHI) for 

their region. Applicants must not be 

able to qualify for the Single Family 

Housing Guaranteed Loan program. 

They can work with their state-based 

Rural Development office to apply (an 

alphabetical list is available at this link: 

https://go.usa.gov/xtfWw).

Tools and Resources:

A property and income eligibility 

tool is available at this link: 

https://go.usa.gov/xtfZk. 

NOTE: Because citations and other information is subject to change, please always 

consult the program instructions listed in the section above, titled “What governs 

this program?” You will find additional forms, resources, and program information at: 

rd.usda.gov. Go to the “Programs and Services” tab and then select “Single Family 

Housing Programs.” USDA is an equal opportunity provider, employer, and lender.

October 2022