Buying a home is an exciting milestone However, for many families and individuals, affording a home can be a significant challenge. This is especially true in rural areas, where incomes tend to be lower but decent housing is still difficult to find Fortunately, USDA Rural Development offers special loans in Indiana to promote affordable homeownership opportunities for rural residents. Keep reading to learn more about utilizing USDA Rural Development loans to purchase a home in rural Indiana.
Overview of USDA Rural Development Loans in Indiana
The US Department of Agriculture’s Rural Development program assists rural communities across America, including Indiana, by providing loan programs to help families obtain decent, affordable housing.
One of the main loan programs offered is the Single Family Housing Direct Home Loan program, also known as the Section 502 Direct Loan. This program provides home loans to low and very-low income households in eligible rural areas. These loans can have subsidized interest rates and do not require down payments.
To qualify for the Direct Loan program in Indiana, applicants must meet income eligibility requirements and be able to demonstrate creditworthiness and repayment ability. The property to be purchased must be located in an eligible rural area. Funds can be used to build, repair, renovate or relocate a home on the property.
The Rural Development office in Indiana can determine eligibility and provide more details on requirements and how to apply for the Direct Home Loan program.
Benefits of USDA Rural Home Loans in Indiana
Utilizing a Rural Development Direct Home Loan offers many benefits for Indiana residents, including:
- Low fixed interest rates – Current rates for low and very low-income households can be as low as 1%.
- Subsidized payments – Subsidy is provided to reduce monthly payments and improve repayment ability.
- No downpayment required – 100% financing means borrowers do not need money upfront.
- Low monthly payments – Interest credits allow for lower monthly mortgage payments.
- 33-38 year terms – Long repayment terms keep payments affordable.
Because Rural Development loans do not require downpayments and offer subsidized interest rates, they make homeownership achievable for lower income borrowers. They provide an opportunity not typically available through conventional loans.
Eligibility Requirements for Indiana
To qualify for a Rural Development Single Family Housing Direct Home Loan in Indiana, applicants must meet certain eligibility criteria:
- Be a U.S. citizen or legally admitted permanent resident.
- Be unable to obtain traditional credit elsewhere.
- Have a steady income source and sufficient repayment ability.
- Have an income below the applicable low-income limit set for their area but not exceed the maximum income threshold.
- Purchase a home in an eligible rural area of Indiana.
- Be able to provide a minimum cash investment, if required.
Debt and income ratios will be evaluated to determine creditworthiness. Applicants must have reasonable credit histories but flexibility is provided for those with past issues.
Applying for a USDA Home Loan in Indiana
To get started with a Rural Development home loan, contact the Indiana Rural Development State Office or nearest Area Office. Locations can be found on the USDA website.
When applying, the following items will be needed:
- Identification documents
- Household income verification
- Credit history documentation
- Assets/cash reserve proof
- Property information in an eligible rural area
Additional application materials like tax returns and payroll records may be requested as supporting documents. Applicants will also need to complete forms like the Uniform Residential Loan Application.
The Rural Development office will determine eligibility and work with applicants throughout the homebuying process. Direct loans are typically provided on a first come, first served basis.
Utilizing a USDA Home Loan to Purchase Rural Property
Rural Development home loans can be used to purchase an existing property or construct a new home in a rural area of Indiana. The loans provide flexible financing options. Borrowers can:
- Finance up to 100% of the appraised value
- Include closing costs and prepaid expenses in the loan
- Finance loan related fees into the mortgage
- Lock in an interest rate when applying which is honored at closing if lower
- Finance homes that need repairs if funds will make it decent, safe, and sanitary
When constructing a new home, funds can be used to prepare the site, provide water and sewage facilities, and build, renovate or relocate the home. For existing homes, funds can be used for rehabilitation as needed.
The Rural Development Indiana office has ultimate approval authority over property eligibility and financing. Not all homes or home types can be financed. Mobile homes are limited. Maximum area loan limits also apply based on location.
Maintaining a USDA Rural Housing Loan
Once approved, borrowers must occupy the home as their primary residence and keep up with mortgage payments and property taxes, insurance, and interior/exterior maintenance.
Rural Development loans are assumable, so they can potentially be transferred to a new owner if the home is sold. Loans may also be prepaid or subordinated in some cases.
Ongoing subsidy is provided on a yearly basis to support affordable payments. Subsidy amounts are reviewed annually and tied to income, which must stay below eligibility limits. Reporting and recertification are required.
Rural Development Contacts for Indiana
For questions or to learn more about applying for a Single Family Housing Direct Home Loan in Indiana, contact the local Rural Development office:
Indiana Rural Development State Office
- Phone: 317-290-3100
- Address: 5975 Lakeside Blvd., Indianapolis, IN 46278
Area Offices:
- Columbia City – 260-244-6266
- North Vernon – 812-346-3411
- Muncie – 765-747-5531
- Crawfordsville – 765-362-0405
- Jasper – 812-482-1171
- Knox – 574-772-3066
USDA Rural Development provides a path to affordable homeownership for rural Indiana residents. Contact a local office today to take the first step!
Need a 620 credit score
USDA Loans .Net requires a middle credit score of at least 620. If you are close, apply and we can help.
Step 1 of 10
Looking for a home in Indiana? A USDA loan may be just the thing for you. For a family of 1-4 in Indiana, the average household income limit for a USDA loan is about $110,650, and can be as high as $153,500 for a family of 5 or more. To learn more about how to get started with your USDA loan, fill out the short form below to get in touch with one of our loans specialists.
The map below shows the areas of Indiana eligible for USDA loans. For more information on qualifying areas and properties, check out the USDA property eligibility screen.
Below you will find a link to the USDA income limits for Indiana:
- NO down payment – Finance 100% of your home
- NO maximum loan amount in Indiana.
- NO assets needed to qualify
- Flexible credit guidelines
- Competitive, fixed interest rates so payments do not increase
- USDA Loans are for new and existing properties
Start your Indiana USDA home loan now! Just fill out this quick form to get started & a USDA loan specialist will contact you with your options.
What areas are eligible?
Buying a House Using USDA Rural Development Loan ($1,000 DOWN)
FAQ
What is the income limit for a USDA loan in Indiana?
Is a rural development loan the same as a FHA loan?
Is a USDA loan the same as rural development?
What credit do you need for a USDA RD loan?
What is USDA Rural Development?
As a part of USDA Rural Development, our mission is to be a cost-effective service provider that strives to help homeowners and their families remain successful homeowners throughout the term of the loan. Our home loans are serviced by the Customer Service Center (CSC), located in St. Louis, Missouri.
How do I get a home loan with rural development?
If you would like information about obtaining a home loan with Rural Development, contact your local service center. If you have an account with us and you would like to view your mortgage account information, you must first obtain a USDA level 1 Customer ID and Password, which you can do by registering below.
Should you consider a USDA Rural Development Loan?
Consider a USDA rural development loan if you’re interested in buying, refinancing or renovating a home in a rural community that will be your primary residence. The first step is talking to a USDA-approved lender, who can help you explore all the loan options available to find the right mortgage for you.
What is the Rural Economic Development Loan and grant program?
The Rural Economic Development Loan and Grant program provides funding for rural projects through local utility organizations. USDA provides zero-interest loans to local utilities which they, in turn, pass through to local businesses (ultimate recipients) for projects that will create and retain employment in rural areas.