Rural Housing Loan

In this paper we will describe the rural housing loan scheme which is adopted in many countries around the world for the socio-economic development in the rural areas. In many countries, specially developing or underdeveloped, the government make the access easy to affordable housing loans for the poor people in rural areas.
Providing rural housing loans with low interest is a part of the socio-economic development program in the rural areas. In the United States, the Rural Housing Service, a branch of the Agriculture Department of US, is looking after this program with the help of Fannie Mae.

However, the main aim, which is more or less same all over the world, of rural housing loan scheme is to empower the rural people, especially the farmers, to expand their choice of housing and improve their socio-economic situations.

Salient Features:
The common features of the rural housing loan is given below:
For the low and as well as the moderate income people, there is no need for any sort of down payment.
The rate of interest is fixed, and the repayment period is 25 to 35 years, varying from one country to another.
Eligibility for this loan is limited only to the rural areas.
After closing, there is no need of any cash reserve.
For the guaranteed loans, the candidates’ income should remain under 115% of the area median income. Those who are facilitated with this program will not be eligible for traditional financing.
In case of the Leveraged loans, the candidates’ income must lie under 80% of the area median income.


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Last Updated on : 30th July 2013

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