The United States Department of Agriculture (USDA) Rural Development office offers several loan and grant programs to support housing, businesses, utilities and community facilities in rural areas. These programs help improve the economy and quality of life for rural communities in Massachusetts.
If you live in a smaller town or unincorporated rural area in Massachusetts USDA Rural Development loans can assist you in buying, building repairing or improving a home. Financing is also available to start or expand a business, purchase equipment, and develop essential services like fire stations and healthcare clinics.
Below is an overview of USDA Rural Development loan programs active in Massachusetts along with eligibility requirements application tips and contact information.
USDA Rural Housing Loans
The Rural Housing Service division offers several loan and grant options to promote homeownership in rural regions.
Single Family Housing Direct Loans
USDA provides fixed-rate mortgage financing directly to low- and moderate-income homebuyers in eligible rural locales.
Details:
- Up to 100% financing with no down payment required
- 33 year loan term with fixed interest rate
- Applicants must be unable to qualify for traditional mortgages
- Income and home value limits apply
Single Family Housing Repair Loans/Grants
Low-interest loans and grants to improve or modernize homes in need of repair.
Details:
- Loans up to $40,000 at 1% interest are available for households under 50% of area median income
- Loans up to $25,000 at 1% interest for over 50% of area median income
- Grants up to $10,000 for homeowners 62+ unable to repay a loan
Self-Help Housing Loans
Loans support community-based construction of new homes for low-income families through “sweat equity.”
Housing Repair & Rehabilitation Grants
Grant funding to repair and rehabilitate homes owned by low- and very-low-income rural residents.
Rural Rental Housing Loans
Direct mortgage loans to build or acquire rental housing in rural communities. At least 25% of units must support very low and low income tenants.
USDA Business & Industry Loans
The Rural Business-Cooperative Service offers guaranteed loan financing and grants to support rural businesses and spur job creation.
Business & Industry (B&I) Guaranteed Loans
Loans from commercial lenders guaranteed by USDA up to 60% – 90% to support rural businesses.
Details:
- Minimum $5,000 up to $25 million maximum loan amount
- Proceeds can purchase land, equipment, buildings or inventory
- Working capital and debt refinancing also eligible uses
Rural Energy for America (REAP) Renewable Energy & Efficiency Loans
Guaranteed loan financing for renewable energy systems and energy efficiency improvements that help small rural businesses lower energy costs.
Details:
- Minimum $5,000 up to $25 million maximum loan amount
- Solar panels, wind turbines, anaerobic digesters, energy-efficient equipment, HVAC, lighting and more
Value-Added Producer Grants (VAPG)
Grants for planning activities or working capital expenses to help viable agricultural producers expand markets and increase revenues.
Grant limits:
- Planning grants up to $75,000
- Working capital grants up to $250,000
USDA Community Facilities Loans
The Community Facilities Program provides affordable financing to develop essential community facilities and services in rural areas.
Community Facilities Direct Loans & Grants
Direct, low-interest loans and grants to construct, renovate or equip facilities that provide healthcare, education, public safety, and public services.
Loans:
- Up to 100% project financing at low fixed interest rates
- Repayment up to 40 years
Grants:
- Up to 75% of project cost
- Priority for smaller & low-income communities
Community Facilities Guaranteed Loans
Loans from commercial lenders guaranteed by USDA to finance rural community facility projects.
- Minimum $5,000 up to $30 million maximum loan amount
USDA Water & Wastewater Loans
The Water & Environmental Programs provide infrastructure loans and grants to construct, repair and expand public water systems and waste disposal facilities.
Water & Waste Disposal Direct Loans & Grants
Affordable financing to develop water and waste systems in rural towns with populations under 10,000.
Loans:
- Up to 100% project financing
- Repayment up to 40 years at fixed interest rate
Grants:
- Up to 75% of project costs
- Communities under 5,500 population may qualify
Water & Waste Disposal Guaranteed Loans
Loan guarantees to eligible private lenders that finance water and waste infrastructure projects in rural areas.
- Minimum $5,000 up to $30 million maximum loan amount
Who Qualifies for USDA Rural Development Loans?
While specific eligibility criteria varies by program, USDA Rural Development loans and grants are generally available to applicants who meet these requirements:
- Project or property is located in an eligible rural area
- Applicant is unable to get affordable credit elsewhere
- Sufficient income and cash flow to support loan repayment
- Acceptable credit history
Private businesses, nonprofits, government entities, and individuals can apply for different USDA loan and grant programs depending on the project purpose.
6 Tips for Getting USDA Financing
Follow these tips when seeking USDA Rural Development loans:
1. Check your address eligibility
Use the USDA eligibility tool to verify your address falls within an eligible rural area.
2. Review lending criteria
Each program has distinct requirements, so understand criteria before applying.
3. Talk to a local office
Meet with a specialist to discuss your project and get a personalized recommendation.
4. Gather documents
Compile needed financial statements, permits, cost estimates, and other documents.
5. Apply directly
Work directly with USDA staff who can guide you through the application process.
6. Watch deadlines
Application periods apply for certain loan and grant programs.
USDA Rural Development Office Locations in Massachusetts
There are two USDA Rural Development area offices serving communities across Massachusetts:
West Office
178 Williams Street
Pittsfield, MA 01201
Phone: (413) 499-4771
Central Office
451 West Street
Amherst, MA 01002
Phone: (413) 253-4361
In addition to these two area locations, a USDA Rural Development specialist is available in Boston at:
Boston Office
10 Causeway Street
Boston, MA 02222
Phone: (617) 565-1352
You can stop by one of these offices during business hours for personalized assistance in accessing USDA loan and grant resources. Staff can evaluate your needs, review options, and help submit applications.
Partner with USDA Rural Development
USDA Rural Development loan programs provide affordable financing that simply isn’t available from private commercial lenders. These loans fill credit gaps and make it possible to build, repair, start or grow rural housing, businesses and critical community facilities and infrastructure.
If you have a vital project that will create jobs, drive economic growth, or improve quality of life in rural Massachusetts, USDA should be your first stop. The knowledgeable specialists at these local offices can tailor solutions using the full range of loan, grant and loan guarantee programs. Partnering with USDA Rural Development can help turn your plans to revitalize a rural community into reality.
What are the qualifications for a USDA loan?
In order to qualify for a rural development home loan, you must meet certain requirements.
- USDA loans have income limits based on the areas median income. These limits vary depending on the location and size of the household. Generally, the total household income cannot exceed 115% of the median income for your area as set by the USDAÂ and the property must be located in an eligible rural area. Visit the USDAÂ website to research the USDA income limit in your local area.
- Minimum FICO score of 620
- The home you are interested in purchasing must be single family residence (no multi-units)
- Single family “primary residents” only (no rentals or investment properties)
- Bankruptcy wait period is 3 years from discharge date
- Up to 6% seller contribution is allowed toward closing costs
- Massachusetts and Rhode Island properties must be considered “rural”, which is generally defined as county with fewer than 10,000 people. You can determine if a property is eligible for financing through the USDA Rural Housing Loan program by entering the property address on the USDA website.
What is the USDAÂ Guarantee Fee ?
USDA loans require mortgage insurance to protect the lender against potential defaults. There are two types of mortgage insurance associated with USDA loans: an “upfront guarantee fee” and an “annual” (monthly) fee. The upfront guarantee fee can be financed into the initial loan amount, while the annual fee is paid as part of the borrowers monthly mortgage payment. â The USDA “upfront guarantee fee” is a percentage of the loan amount that is added to your loan balance at time of close. This fee is not paid directly by the borrower but is instead included in the overall loan amount. Â The percentage charged, may change over time, so its recommended to consult with Onshore Mortgage, LLC for the most up-to-date information. As of 01/01/2024 the upfront guarantee fee was 1.0% of the loan amount and a monthly (annual) fee of 0.35% of the loan amount. These fees apply to both home purchases and refinance transactions.
Buying a House Using USDA Rural Development Loan ($1,000 DOWN)
FAQ
What is the income limit for a USDA loan in Massachusetts?
What towns are in the USDA in Massachusetts?
What is the USDA rural development loan?
What are the pros and cons of a USDA loan?
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Pros
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Cons
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No down payment
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Income limits
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Competitive interest rates
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Property restrictions
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Relaxed credit requirements
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Occupancy requirements
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No PMI requirement
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USDA program fees
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What is a USDA Rural Development home loan?
USDA Rural Development home loans are specifically designed to help low to moderate income households purchase homes in USDA eligible rural areas. USDA loans can be used to purchase an existing home, build a new home from scratch, or make repairs or renovations to an existing USDA eligible rural property.
Why does USDA Rural Development offer a section 502 Direct Loan?
Why does USDA Rural Development do this? USDA Rural Development’s Section 502 Direct Loan Program provides a path to homeownership for low- and very-low-income families living in rural areas, and families who truly have no other way to make affordable homeownership a reality.
What is a USDA RD loan?
The USDA RD loan is one of the best no down payment mortgage loans that most families can use to buy a home in Michigan. The program is guaranteed by the USDA so banks and lenders have reduced risk when lending. This promotes low mortgage rates and flexible terms.
How can USDA RD help rural communities?
Explore ways USDA RD can help rural communities obtain the technical assistance and financing necessary to develop drinking water and waste disposal systems. Our Energy programs empower rural America to establish, maintain, and evolve its energy resources for a cleaner, brighter, and more sustainable future.