Our friends at the U.S. Department of Agriculture/Rural Development (USDA/RD) have made changes to their Section 502 Guaranteed Loan Program so more Vermonters may be eligible.
USDA/RD has increased its income limits for the program, which help determine who might be eligible for a home loan. At the same time, they've moved to a two-tiered system — for families of one to four people and five to eight people — to simplify the process.
"This will have a huge impact for qualifying customers as it relates to income eligibility based on household size," according to USDA/RD Housing Program Director Bob McDonald.
"For example, the change increases the threshold for eligibility of a two-person household by almost $20,000 higher than what was used in 2008."
In the 502 program, RD doesn't make loans directly to borrowers. Instead, it guarantees a loan made by a commercial lender, making the loan less risky for the lender and making a home loan more viable for low- and moderate-income borrowers who would otherwise have trouble obtaining conventional financing.
The two-tiered change only applies to the Guaranteed Loan Program, but RD's direct program income limits have also been raised — by about 5 percent over last year.
For more information on USDA/RD home loans, contact Bob McDonald at 802.828.6015 or [email protected].