Single-Family Housing Programs
What is the difference between a "direct" and a "guaranteed" home loan?
A direct loan is a loan directly from the government. Qualified applicants work with a local Rural Development specialistthroughout the application process. A guaranteed loan is a loan made by a traditional lender (bank, mortgage lender, credit union) and "guaranteed" by the government against default. Qualified applicants work with the lender throughout the application process
How do I know if I qualify for either a direct or guaranteed loan?
Here is a brief overview: For both programs, the home must be modest in size and located in an eligible rural area of 20,000 people or fewer. Direct loans are intended for qualified low and very-low income homebuyers unable to obtain financing elsewhere. Guaranteed loans are intended for moderate-income homebuyers and are adminstered through traditional lending institutions such as banks.