Applying for a mortgage can sometimes prove complicated. However, there are many different programs that one may be eligible for. You first need to gather information about the qualifications and guidelines for programs such as the Rural Housing Development Loan program. Interest rates can be different with different lenders along with the qualifications and guidelines from one lender to the next.

Rural Housing Development Loans Definition

The Rural Housing Development loan is defined as a program through which the government guarantees your mortgage through another lender. Originally created in 1994, it works by having by having the government secure your loan by guaranteeing it as opposed to lending you the money. The loan is provided through various lenders which participate with the government.


The application process for a RHS loan is actually a two part process. You must first qualify and be approved through one of the various lenders approved by the government and then there is an application that must be submitted to the Rural Housing Development Authority to be approved for the guarantee program. In many cases, the lender will send the application to the Rural Housing Development Authority for you.


Qualifications for the RHS program are usually first and foremost an income ceiling. Once it is verified that your income is within the range for the program, there are other guidelines as well that must be met. The mortgage cannot be for a second home to be used for rental income. The loan cannot be for property that you do not intend to build on. The house must be within a specific size for your family. In addition, the purchase price of the home cannot exceed the set limitations.

Using A Mortgage Calculator

If you would like to calculate whether or not your debt to income ratio is an acceptable one, it is a good idea to use a mortgage calculator prior to applying for any mortgage. Many of which can be found online. Key in the mortgage amount requested, down payment amount if any, and your income. The calculator will figure a debt to income percentage for you. Many lenders use this number to determine if you are within the acceptable range to qualify for a mortgage, or any other type of loan for that matter.

Published on March 9, 2011