Rural Development (RD) is an agency of the U.S. Department of Agriculture that guarantees 0% down payment conventional type mortgages. Because of the guarantee, lenders require no down payment with this program. Additionally, if the appraised home value exceeds the sales price some or all of the closing costs can be financed in the loan amount. The borrower must pay a 2.2% Guarantee Fee to RD in lieu of monthly mortgage insurance.

While RD loans are very similar to conventional loans, some important distinctions are worth noting:

	Income ceilings based on family size and residence county apply, a borrower is ineligible if these limits are exceeded
	Debt to income ratio underwriting is very strict
	An RD appraisal must contain commentary from the appraiser on the home's thermal efficiency
	Eligible properties must lie outside Missoula city limits