FARIBAULT, MN – The USDA Rural Development Agency is currently accepting applications for loans available to low-income families to buy, build, rehabilitate or improve homes located in rural communities with a population of 20,000 or less. Faribault, Northfield and Owatonna are currently eligible areas as these communities are “grandfathered” into the program. The low-income limit varies by county and ranges from $51,050 – $65,800 for a four person household in Southeastern Minnesota.
The maximum loan limit for the counties served throughout the SE Region range is $216,840 – $257,600 (effective 6/15/2015). Approval for the maximum amount is based on household income and monthly debt obligations. NO down payment is required and a portion of the loan closing costs may be included into the loan.
The applicant must be unable to obtain the needed credit from another lending source, have an acceptable credit history, meet income guidelines, have repayment capacity to service any existing obligations and the home loan payment, be without adequate housing, be a United States citizen or a non-citizen legally admitted for permanent residence and have the ability to personally occupy the home on a permanent basis.
Funding is based upon an annual appropriation. Please contact our office for the necessary application information. Loans may be made for up to 100% of the appraised value of the home. The current interest rate for this program is 2.875% (effective November 1, 2016). The Rural Development loan may be subsidized to as low as a 1% effective interest rate, based on applicant eligibility and financial need. The repayment period of the loan is typically 33 years.
For information pertaining to the following counties: Blue Earth, Dakota, Dodge, Faribault, Fillmore, Freeborn, Goodhue, Houston, LeSueur, Mower, Olmsted, Rice, Scott, Steele, Wabasha, Waseca and Winona, contact the USDA, Rural Development office at 1408 21st Ave. NW #3, Austin, MN 55912. (507) 437-8247, ext. 4. Information is also available on the web at www.rd.usda.gov/mn.