Tennessee’s Rural Development Guaranteed Loan Program provides home loans to low-income families in rural areas to purchase new or existing homes at up to 100 percent of appraised value, Betty Hicks, with U. S. Department of Agriculture’s Rural Development, told the Chattanooga Mortgage Bankers Association.
From the time a completed application is received, “we try to respond within 24 hours” on whether it is approved, she said. The goal is to open up opportunities for low-income families to buy a home, she added.
Low income borrowers are eligible for the loans throughout a 10-county area of Southeast Tennessee with the exception of the municipal areas of Chattanooga and Cleveland, she explained.
“We believe there are a lot of families in this area who can qualify for the program,” she said. “We want to use the funds provided for these loans,” she added.
A Guaranteed Rural Housing Loan Workshop is scheduled for Tuesday, Oct. 4, to help lenders learn more about underwriting and processing Rural Development loans. The workshop will be held at the Southeast Tennessee Development District first floor conference room at 535 Chestnut St. and will be conducted by loan specialists Linda Whillock and Mary Short.
Those interested in the workshop as asked to make reservations by Sept. 23 by calling Colleen Price at 756-2239, ext. 100.
Ms. Hicks said if the income level is above the amount eligible for Rural Development loans, they are referred to lenders handling more traditional loans.
In the Rural Development program, loans can be made up to 100 percent of market value or acquisition cost, whichever is less. Closing costs can include guarantee fees, legal fees and other prepaids.
Homes can be new or existing, with no size restrictions, but must be adequate and functional.
Advantages include no down payment requirement, closing costs included in the loan up to the appraised value and no monthly mortgage insurance premium with lower monthly payments.