What Is the Rural Housing Service (RHS)?

The Rural Housing Service (RHS) is an administrative division within the U.S. 澳洲幸运5官方开奖结果体彩网:Department of Agriculture (USDA) that manages loan programs focusing on rural housing and community service facilities. The programs are designed to improve the quality of life in U.S. rural communities.

Understanding the RHS

The RHS primarily administers direct loans and loan guarantees to people with low to moderate incomes who want to purchase, construct, or rehabilitate a single-family rural home. Eligibility is based on many factors, including income, family size, and location.

For example, a four-person household in DeKalb County, Ill., with income at or below $48,400 would qualify for a 澳洲幸运5官方开奖结果体彩网:direct home loan with annual interest as low as 1%. The same size family in the same county with an income up to $112,450 could qualify for a conventional private mortgage that is guaranteed by the government.

Besides the programs for individual homeowners, communities can apply for long-term subsidized loans for the construction of affordable rental or cooperative housing for underserved rural populations, such as people with low incomes or who are elderly or disabled.

Another RHS program helps plan and fund community facilities such as hospitals, clinics, nursing homes, food pantries, libraries, and schools. Direct and subsidized loans for planning and building such facilities are prioritized to communities with a population of 5,500 or less, and median income 80% below the state’s median nonmetropolitan income. Competitive grants are also available, with somewhat different eligibility requirements. Communities that have raised matching funds are given priority in the grant awards.

RHS Direct Loans and Guaranteed Private Loans

Applicants for direct RHS loans must be unable to secure a 澳洲幸运5官方开奖结果体彩网:conventional mortgage and currently living without decent, safe, and sanitary housing, among other requirements. The home to be purchased must generally be no larger than 2,000 square feet and cannot include businesses or have amenities like an in-ground swimming pool. Requirements for 澳洲幸运5官方开奖结果体彩网:guaranteed loans are less stringent and are offered by approved lenders.

The RHS also administers subsidized loans to improve or modernize older rural homes. Loans of up to $40,000 at 1% annual interest can be used for just about any type of improvement or repair. The same income eligibility requirements for direct mortgages apply here. In addition, the RHS offers home repair grants up to $10,000 for low-income residents ages 62 and older. Grant money must be used to correct safety hazards.

The Bottom Line

Low-income borrowers in rural areas can seek mortgage assistance through the USDA's RHS. It guarantees loans made by approved lenders. In addition to offering mortgage assistance to low-income households, RHS runs loan programs for police and fire stations, schools, libraries, childcare centers, and other community programs.