No Down Payment Home Loans Available for Rural Nebraskans through USDA Program

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USDA Rural Development has funding available to assist rural Nebraska families to achieve homeownership.  The Direct loan program offers financing with no down payment with a long-term, low fixed-interest-rate that make loan payments more affordable. The Fiscal Year (FY) 2017 funding cycle ends September 30, 2017.  Applicants are encouraged to contact USDA Rural Development staff before September 1, 2017 to take full advantage of the agency’s housing program.

Eligibility for a USDA direct loan is based on household income.  For the USDA Direct loan program, in many counties a 1-4 person household can have incomes of $50,100 and for 4-8 person household incomes of $66,150. The income limit for some counties may be as high as $62,800 for 1-4 persons and $82,900 for 5-8 person households for the Direct program.  A full list of income limits by county and household size are available on the Rural Development website at www.rd.usda.gov/ne under the Direct Loan programs.

The interest rate for USDA Rural Development’s direct home loan program is 3.25 percent for a 33-year term.  However, payment assistance may reduce the interest rate to as low as one percent to applicants with qualifying incomes.  

The lower interest rate makes monthly payments affordable, and often may be less than rent.  For example, a $100,000 loan at 3.25 percent would have monthly principal and interest payments of $413. If an applicant qualified for a 1-percent loan the monthly payment would be only $297.

Homes must be located in rural communities. All communities in Nebraska are eligible for housing programs with the exceptions of Fremont, Grand Island, Hastings, Kearney, Lincoln, North Platte, Omaha and South Sioux City/Dakota City.  The maximum mortgage limit for a USDA Rural Development direct home loan is $170,000 - $190,000 depending on the county where the property will be located.

Homeownership provides a strong foundation to help build household wealth, start a business, fund education through home equity, or give someone a chance to build a better future.  For example the direct loan program helped Samantha Keith to buy a home in the city she grew up in.  Samantha and her children Adrienne and Ricardo lived in a rental       property for six years in Lexington, Nebraska.  She had been searching for a home for more than a year and almost gave up, but just then the ideal property, next door to her parents, went up for sale.  Samantha toured the home, decided it was the right house and was ready to move forward.

Samantha works for the Natural Resource District (NRD) out of the USDA Natural Resources and Conservation Service in Lexington and was familiar with USDA Rural Development and its housing programs.  She checked to see if she would be an eligible applicant and was determined qualified for a USDA direct loan.

Financing in place, Samantha worked with a local attorney to place an offer on the home and it was accepted.  The home, is a 966 square foot single story with two bedrooms and one bath.  A perfect fit for the family of three. 

You too can become a homeowner!  Please contact a Rural Development office to obtain an application.  USDA Rural Development has four offices across the state to serve rural Nebraskans with housing opportunities.  Office locations include a State Office in Lincoln, along with Area Offices in Lincoln, Scottsbluff, Kearney, and Norfolk.

You may also visit our website at http://www.rd.usda.gov/ne  and click on the link for “Single Family Housing Direct Home Loans” under the Key Feature Programs for more information and a list of contact information.

Last Modified: 07/31/2017