Rural Housing Service
Definition and meaning of Rural Housing Service in real estate.
The Rural Housing Service is an agency of the United States Department of Agriculture that offers mortgages, grants, and loan guarantees to help low-to-moderate-income families buy or improve homes in rural areas.
In more detail
Commonly known as the RHS, the agency administers programs such as the Single Family Housing Direct Home Loan and the Single Family Housing Guaranteed Loan Program. These loans are designed to assist borrowers who might not qualify for conventional financing by offering competitive interest rates and requiring no down payment.
The property being financed must be located in an eligible rural area, which is defined by population limits set by the government. Borrowers must also meet specific household income limits to qualify for assistance.
Key facts
| Category | Mortgages & Financing |
|---|---|
| Also known as | RHS or USDA loan program |
| Down payment required | Typically zero percent for qualifying eligible buyers |
| Location restriction | Property must be located in an eligible rural area as defined by the USDA |
A first-time buyer with modest income uses a loan guaranteed by the Rural Housing Service to purchase a home in an eligible countryside community, allowing them to close on the property without a down payment.
Frequently asked questions
Who qualifies for a Rural Housing Service loan?
Qualifying borrowers must have low-to-moderate income, meet credit requirements, and plan to use the property as their primary residence in an eligible rural area.
Are USDA loans limited to farmers?
No, you do not need to be a farmer or run an agricultural business to qualify for a Rural Housing Service loan, but the home must be located in a designated rural zone.