A USDA Guaranteed Loan is Government insured
100% purchase loan. These Loans are only
offered in rural areas and serviced by direct
lenders that meet federal guidelines.

Under the Guaranteed Loan program, the Housing and
Community Facilities Programs guarantees loans made by private
sector lenders. (A loan guarantee through HCFP means that,
should the individual borrower default on the loan, HCFP will pay
the private financier for the loan.) The individual works with the
private lender and makes his or her payments to that lender.

Under the terms of the program, an individual or family may
borrow up to 100% of the appraised value of the home, which
eliminates the need for a down payment. Since a common barrier
to owning a home for many low-income people is the lack of
funds to make a down payment, the availability of the loan
guarantees from HCFP makes the reality of owning a home
available to a much larger percentage of Americans.