Program Benefits
The current fixed interest rate is 4.375% however, with payment assistance, you can reduce it to 1%!
The Government Payment Assistance is a subsidy that lowers your monthly mortgage payment based on your income level. This isn’t a traditional loan discount but rather a temporary financial aid that effectively reduces the interest rate you pay each month.
✅ The assistance is calculated based on your household income and financial need.
✅ The program does not permanently change your loan’s interest rate, but it lowers the monthly cost to the equivalent of a 1% interest loan. 75% of the subsidy amount will be required to pay back once the home has been sold, giving you a 25% discount!
✅ The program does not permanently change your loan’s interest rate, but it lowers the monthly cost to the equivalent of a 1% interest loan. 75% of the subsidy amount will be required to pay back once the home has been sold, giving you a 25% discount!
Those with assets over $15k can be required to use a portion of those assets.
If an applicant has over $15,000 in liquid assets ($20,000 for elderly households), the government may require them to use a portion of the excess funds toward their home purchase before qualifying for zero down.
This ensures the Direct Loan remains need-based, prioritizing low-income buyers. Excess assets can go toward closing costs, loan reduction, or home expenses. This policy helps distribute funds fairly while still allowing qualified applicants to receive assistance.
No private mortgage insurance. (PMI)
The Rural First Home Program does not rely on private lenders or mortgage insurance providers to offset risk. Instead:
✅ The government itself guarantees the loan, eliminating the need for third-party mortgage insurance.
✅ The government carefully evaluates financial eligibility, ensuring that borrowers can afford their loan without additional insurance requirements.
✅ The government carefully evaluates financial eligibility, ensuring that borrowers can afford their loan without additional insurance requirements.
This built-in structure makes PMI unnecessary, allowing borrowers to save hundreds, if not thousands, over the life of the loan.
There Are 3 Key Factors to Consider
Income
Applicants must meet county income restrictions (for example, $96k in Auburn/Sacramento, CA)
Location
Time
The process might take longer than traditional financing (3-6 months) and can vary depending on the state.