Rural Development (RD)

This hidden gem of a loan is completely underutilized by many big banks, but Treadstone is a leader in the Rural Development lending process. The Rural Development Loan is perfect for buyers who want  a no-down-payment option, as well as buyers who want to build, improve, repair or rehabilitate homes in rural areas.

To qualify for a Rural Development loan, buyers and properties must meet the MSHDA (Michigan State Housing Development Authority) qualifications. These include sale price, income limit, first-time home buyer eligibility guidelines, and location requirements. The property must also be a single family, owner-occupied house. The term of the loan is a 30 yr. fixed rate mortgage.

This loan is backed and guaranteed by the United States Department of Agriculture, with a 30-year fixed rate mortgage. The RD loan allows a person to borrow up to 102% of the appraised value of the home. This is the only zero down option available to buyers who haven’t served in the military. The Rural Development loan can also include closing costs, prepaid/escrow items and the RD guarantee fee. Most RD loan applicants receive almost all their earnest money back after closing. The maximum loan amount cannot include repairs and or improvements to the property.

Borrowers interested in RD Loans who have served in the military are also encouraged to check out VA Mortgages.

  • 0% down payment option
  • Property must be in an eligible location
  • You do not have to be a 1st time homebuyer
  • Rates are similar to conventional rates
  • No manufactured homes, FHA approved condos only
  • Seller contribution allowed to 6%
  • Maximum income is 115% of median income in area