Rural Housing Service

Definition

The Rural Housing Service (RHS) operates under the U.S. Department of Agriculture (USDA) and focuses on improving housing and community facilities in rural areas. The RHS administers various programs offering loans, loan guarantees, and grants to help in the construction, improvement, and purchase of housing and related facilities in rural areas and small towns. These efforts ensure that eligible individuals, including those with low income, can access affordable and decent housing.

Examples

Single Family Housing Direct Home Loans:
- Mary, a low-income resident of a small town with a population of under 20,000, applied for a loan through the RHS to purchase her first home. The direct loan, offered at a subsidized interest rate, allowed her to buy the house she had always dreamed of.
Mutual Self-Help Housing Grant:
- In a rural community, several families worked together under a Mutual Self-Help Housing Grant. They collectively constructed their homes, significantly reducing construction costs while building a supportive neighborhood community.
Community Facilities Loan:
- A small rural town applied for a Community Facilities Loan to build a new medical clinic. The loan, guaranteed by the RHS, provided the necessary funding to commence the construction of the much-needed healthcare facility.

Frequently Asked Questions (FAQs)

Q: Who can apply for RHS programs? A: Generally, individuals or families with low to moderate incomes living in rural areas or small towns with populations under 20,000 can apply for RHS programs.

Q: What types of grants are available through RHS? A: RHS offers different grants including the Housing Preservation Grant, Mutual Self-Help Housing Grant, and grants for the repair and rehabilitation of rural housing for the elderly and low-income residents.

Q: How do I determine if my area is eligible for RHS programs? A: The USDA website provides a property eligibility tool where you can input specific addresses to verify eligibility for RHS programs.

Q: Are there any specific programs for very-low-income individuals? A: Yes, the RHS offers the Single Family Housing Repair Loans & Grants which assists very-low-income homeowners to repair, improve, or modernize their homes.

Q: What is a USDA-certified lender? A: A USDA-certified lender is a financial institution approved by the USDA to originate and service USDA-backed loans through programs like the Single Family Housing Guaranteed Loan Program.

USDA Loans: Mortgage loans offered by the USDA for qualifying rural development projects, enabling low to moderate-income residents in rural areas to purchase or improve a home at favorable rates and terms.
Loan Guarantee: A promise by one party (in this case, the USDA) to assume the debt obligation of a borrower if that borrower defaults, facilitating borrower access to housing funds.
Mutual Self-Help Housing Grant: A program that provides grants to organizations that help very-low- and low-income families build their own homes in rural areas by offering construction guidance and technical assistance.

Online Resources

References

USDA Rural Development. “Rural Housing Service Programs.” USDA, 2023. USDA Official Site
National Rural Housing Coalition. “Rural Housing Problems and Solutions.” NRHC, 2023. NRHC Official Site

Suggested Books for Further Studies

“Housing Policy in the United States” by Alex F. Schwartz – This book covers various housing policies, including those impacting rural areas.
“Affordable Housing in Rural Communities” by Millard Fuller – In-depth analysis of affordable housing initiatives in rural areas.
“Rural Housing and Economic Development” by Robert Geddes – Comprehensive insights into housing and economic development in rural America.

Real Estate Basics: Rural Housing Service Fundamentals Quiz

### What is the primary function of the Rural Housing Service (RHS)? - [ ] To oversee urban housing developments. - [x] To provide loans, loan guarantees, and grants for housing in rural areas. - [ ] To build skyscrapers in small towns. - [ ] To regulate agriculture prices. > **Explanation:** The RHS primarily focuses on providing loans, loan guarantees, and grants to improve housing in rural areas and small towns, ensuring access to affordable housing for low-income residents. ### Which department oversees the Rural Housing Service (RHS)? - [ ] Department of Housing and Urban Development (HUD) - [ ] The Treasury Department - [x] U.S. Department of Agriculture (USDA) - [ ] Environmental Protection Agency (EPA) > **Explanation:** The Rural Housing Service operates under the U.S. Department of Agriculture (USDA), working towards providing better housing opportunities in rural regions. ### Are RHS programs available for urban dwellers? - [ ] Yes, all residents can apply. - [x] No, only rural inhabitants are eligible. - [ ] Only for urban centers with a population below 20,000. - [ ] Urban areas have exclusive programs. > **Explanation:** RHS programs are designed specifically for rural areas and small towns. Urban residents do not qualify for these programs. ### What kind of housing can Rural Housing Service loans help to finance? - [ ] Only commercial properties - [ ] High-rise apartments in cities - [x] Single-family homes in rural areas - [ ] Luxury villas > **Explanation:** The RHS provides loans predominantly for single-family homes in rural areas and small towns, making homeownership more accessible to lower-income families. ### How does the RHS define a "rural area" for eligibility? - [x] Areas with populations of less than 20,000 - [ ] Areas adjacent to large cities - [ ] Only farmland without any residential areas - [ ] Any area outside the U.S. > **Explanation:** The RHS typically defines rural areas as those with populations of less than 20,000. This criterion helps target communities most in need of housing support. ### What type of grant assists families in building their own homes under RHS programs? - [ ] Community Development Block Grant (CDBG) - [x] Mutual Self-Help Housing Grant - [ ] Federal Housing Grant - [ ] Urban Development Action Grant > **Explanation:** The Mutual Self-Help Housing Grant assists families in rural areas by providing aid to build their own homes collectively, reducing construction costs. ### Can RHS loans be used for home repairs? - [x] Yes, there are loans and grants specifically for home improvements. - [ ] No, they can only be used for new home purchases. - [ ] Only for energy-efficient appliances. - [ ] RHS does not offer any repair loans. > **Explanation:** RHS offers programs like the Single Family Housing Repair Loans & Grants to help low-income homeowners repair, improve, or modernize their homes. ### What is a primary benefit of an RHS loan guarantee? - [x] Reduces the risk for lenders, making loans more accessible to borrowers. - [ ] It provides free homes to applicants. - [ ] Exempts borrowers from repaying the loan. - [ ] Increases the interest rates significantly. > **Explanation:** An RHS loan guarantee reduces the risk for lenders, encouraging them to offer loans to borrowers who might not otherwise qualify for conventional financing. ### What type of service does the Community Facilities Loan Program offer? - [ ] Personal loan service - [x] Funding for infrastructure and public service facilities in rural areas - [ ] Investment advice for farmers - [ ] Urban planning service > **Explanation:** The Community Facilities Loan Program provides funding for the development of essential public infrastructure and services, such as hospitals and schools, in rural areas. ### In what scenario is a property not considered eligible under RHS programs? - [ ] When it is intended for income production - [x] When it is located in an area with over 20,000 inhabitants - [ ] When it is not yet built - [ ] When it is farming land with no residential structures > **Explanation:** Properties located in areas with populations exceeding 20,000 are not eligible for RHS programs, as these programs target housing in rural and smaller community settings.