What is a 538 loan?

What is a 538 loan?

The Section 538 program is designed to provide government guarantees on loans made for the development or preservation of affordable rural rental housing. Unlike USDA’s Section 515 loan program, the 538 program does not provide a direct loan, nor does it subsidize rents.

Can USDA be used for multi family?

USDA Loans for Multi-family Units The USDA also offers loans on multi-family properties through its Multi-Family Housing Direct Loan program. The program is designed to help qualified borrowers increase affordable rental supply in low- and middle-income earning areas.

What is a USDA direct loan?

A USDA direct loan — also known as the Section 502 Direct Loan Program — is a mortgage made straight from the USDA. This home loan program is for low- to very-low income borrowers who wouldn’t qualify for an affordable mortgage from other sources and otherwise wouldn’t have access to quality housing in rural areas.

What does your credit score have to be to get a USDA loan?

The USDA doesn’t have a fixed credit score requirement, but most lenders offering USDA-guaranteed mortgages require a score of at least 640, and 640 is the minimum credit score you’ll need to qualify for automatic approval through the USDA’s automated loan underwriting system.

What is the difference between USDA direct and guaranteed?

The primary difference between USDA direct loans and USDA guaranteed loans is who funds the actual loan. With the USDA direct loan, the USDA acts as the lender. Conversely, with the guaranteed loan program, private lenders fund the loan while the USDA backs each loan against default.

What is Rural Development Housing?

Rural Development’s Single Family Housing Programs give families and individuals the opportunity to buy, build, or repair affordable homes located in rural America. Eligibility for these loans, loan guarantees, and grants is based on income and varies according to the average median income for each area.

What credit score do I need for a USDA home loan?