RHS administers three types of payment subsidies: interest credit, payment assistance method 1, and payment assistance method 2. Payment subsidies are subject to recapture when the borrower transfers title or ceases to occupy the property.
When the applicant's adjusted income is:
Percentage of Median Income and the Equivalent Interest Rate
Equal to or more than: | BUT less than: | THEN the equivalent interest rate is* |
00% | 50.01 of adjusted median income | 1% |
50.01% | 55 of adjusted median income | 2% |
55% | 60 of adjusted median income | 3% |
60% | 65 of adjusted median income | 4% |
65% | 70 of adjusted median income | 5% |
70% | 75 of adjusted median income | 6% |
75% | 80.01 of adjusted median income | 6.5% |
80.01% | 90 of adjusted median income | 7.5% |
90% | 100 of adjusted median income | 8.5% |
100% | 110% of adjusted median income | 9% |
110% | Or more than adjusted median income | 9.5% |
* Or note rate, whichever is less; in no case will the equivalent interest rate be less than one percent.
7 C.F.R. §3550.68