Homeowners who are struggling to meet the conventional down-payment requirements for a mortgage can seek assistance through the U.S. Department of Agriculture's Rural Development loan program. Since 1994, this division has administered various housing programs to help buyers achieve home ownership. Low-income borrowers can choose a program, based on their needs and eligibility. The Housing Guaranteed Loan is for applicants with an income of up to 115 percent of the area's median income. The Rural Housing Direct Loan, with a standard loan term of at least 33 years, gives low-income buyers the opportunity to acquire a home in a rural area. There are also rehabilitation loans and self-help programs reserved for low-income applicants. Pre-qualify for a loan to initiate the application process.
Meet the basic eligibility requirements. To qualify, you cannot presently own adequate housing. You must be a U.S. citizen or permanent resident who has a dependable income and the ability to repay the loan. Your mortgage payment cannot exceed 29 percent of your income if you qualify as a "very-low-income" applicant. For low-income applicants, the payment is limited to a maximum of 33 percent of your income. You will need to occupy the home as your principal residence. You must also have a reasonable credit history, free of collection accounts and judgments.
Obtain the Pre-Qualification Information Sheet and the Authorization to Release Information Form. The forms are available online or at your local Rural Development office. The USDA Rural Department website allows you to search office locations in your state.
Fill out the Information Sheet. The information sheet requires your basic personal information, including your name, age, Social Security number, marital status and address. Provide the gross monthly income for all applicants. Include sources of unearned income, such as child support, alimony, food assistance or Supplemental Security Income. Answer questions about your assets, including bank accounts, stocks, bonds, and IRAs.
List all debts. Indicate the amount you pay for rent, a car payment, insurance, child support, child care, loans and any other reoccurring debts.
Complete the Authorization to Release Information. You must complete an authorization request granting Rural Development permission to obtain your current and past employment and income records, bank accounts, landlord references and credit report. Sign and date the release.
Return the paperwork to the local Rural Development office. Once your pre-qualification is complete, your are assigned to a loan specialist. You will need to supply documentation to support your income and assets.