The Rural Housing loan is guaranteed by the USDA’s Rural Housing Service. This mortgage program is designed for low to moderate income families in rural areas. The USDA’s “guarantee” means that they will compensate any lender for any USDA Rural Housing loan in default. Additionally, this “guarantee” means that lenders are more than willing to lend their money to individuals with less than stellar credit and no down payment requirement. Most lenders will allow credit scores as low as a 620. The “guarantee” also indicates that lenders will not require mortgage insurance for Rural Housing loans. Nonetheless, Rural Housing loans charge a 3.5% upfront funding fee, which can be financed into the loan. In the scenario of financing the funding fee, the final loan amount will equal 103.5% of the property purchase price. This means the consumer begins homeownership with a mortgage larger than the home is worth. The two major limitations of this program are income restrictions and the property must be located in a designated rural area. Please go to the USDA’s website to check income and property location eligibility.