How to Find a Lender
For a list of approved lenders, call the USDA’s office of rural development at (916) 682-8500. In addition, real estate agents who work in areas that qualify for guaranteed rural home loans are likely to know of approved lenders.
A Sampling of Areas That Qualify
Los Angeles County: Acton, Castaic, Gorman, Lake Los Angeles.
Orange County: Rancho Santa Margarita.
Riverside County: Beaumont, Perris, San Jacinto, Lake Elsinore, Sun City, Desert Hot Springs, Coachella, La Quinta.
San Bernardino County: Adelanto, Big Bear City, Crestline, Twenty-Nine Palms, Lucerne Valley, Running Springs, Yucca Valley.
Ventura County: Fillmore, Piru, Somis, Oak View, Mira Monte, Ojai, Meiners Oaks.
Santa Barbara County: Vandenberg Village, Mission Hills, Guadalupe, Solvang, Buellton.
San Diego County: Pala, Ramona, San Pasqual, Fallbrook, Pine Valley, Alpine.
Source: U.S. Department of Agriculture.
Borrowers Who Qualify
* Have adequate and dependable income, so that your housing payment--including principal, interest, taxes and insurance--is not more than 29% of your income.
* Earn no more than 115% of the median income for the area.
* Have not owned a home in the last three years.
* Have credit history that indicates a reasonable willingness to meet obligations.
* Are a U.S. citizen or have been legally admitted to the United States for permanent residence. Holders of “green cards” are eligible for the program.
Homes That Qualify . . .
* Are situated in rural areas with a population of 10,000 or less or, under certain conditions, towns and cities with populations between 10,000 and 25,000.
* Are new or existing, of any size.
* Are structurally sound, adequate, in good repair and meet federal energy conservation standards.
* Have adequate plumbing, heating, water, waste disposal and electricity and are free of termites.
* Are residences, not farms. No built-in swimming pools are permitted.
About the Loan Program
* Loans may be for up to 100% of market value, or for acquisition cost, whichever is less.
* There is no limit on the seller’s contribution to closing costs.
* Borrowers get loans from participating lenders. Loans are then guaranteed by the federal government.
* Borrowers must live in the house after the purchase.
* Mortgages are 30-year fixed rate at market interest rates.
* Maximum loan amount is the same as the HUD maximum for that area. For instance, in San Bernardino County, the maximum is $155,250. In Yuba County, it’s $101,250.
* Loans may include closing costs, guarantee fee, legal fees, title services, cost of establishing an escrow account and other prepaid items, provided the appraised value is higher than the sales price.
