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Program Assessment


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Single Family Housing Direct Loans

USDA's Rural Housing Service provides direct loans for low and very low-income households to buy homes in rural areas. The interest rate is set annually based on the borrower's income. Families must be without adequate housing and be unable to get credit elsewhere, but be able to afford the mortgage payments.


What This Rating Means

Moderately Effective

In general, a program rated Moderately Effective has set ambitious goals and is well-managed. Moderately Effective programs likely need to improve their efficiency or address other problems in the programs' design or management in order to achieve better results.
  • This is the only direct Federal lending mortgage program that is means tested and offers subsidized loans. It specifically targets low and very low-income rural residents for homeownership. Additionally, because the borrower has to prove that he/she cannot get credit elsewhere it is unlikely that a private or state program would be able to provide assistance similar to this program.
  • Many of the targets set for the long-term goals and annual measures are not very ambitious. Additionally, for both the long term measures identified and annual targets, there is no indication that the agency is trying to achieve anything more than the status quo.
  • This program routinely meets or exceeds its goals, but given the unambitious targets this does not result in high program performance. However, the program's delinquency/default rates are favorable when compared to the national rate, given this program's riskier pool of borrowers.

Improvement Plan

About Improvement Plans

We are taking the following actions to improve the performance of the program:

  • Establishing more ambitious targets for both long-term and annual measures.
  • Developing additional effciency measures that show how management of the program promotes effcient use of taxpayer dollars.
  • Monitoring the current efficiency measure to ensure that it continues to have ambitious targets.

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The content on is developed by the U.S. Office of Management and Budget and Federal agencies.