I have a client in the midst of a Rural Development loan right now. Do you have a Buyer's agent? This is something a Buyer's agent should have gone over with you long before your offer was accepted ... or even presented, for that matter.
MSHDA rates are set directly by MSHDA regardless of the participating lender you use and if you use DPA then they are usually about 1/4-1/2% higher.
As a point of reference, you can probably get a standard FHA loan for about 5.5-6.0% right now however you'd need to come up with 3% to put down. Normally MSHDA rates are a little bit below market levels but looking at the MSHDA website that doesnt appear to be the case currently.
I think the general expectation is that rates will go down in the near future, but at this point it's all speculation and who knows what will happen. As we've seen the last 6 months, anything can happen in the short term. I have seen rates change my .75% (both up AND down) within the same week!
If you have some savings or can maybe get a gift from a family member then maybe you can do a normal FHA loan, but if you're stuck with MSHDA then the decision to lock or not is up to you.
The questions I ask my customers when they are agonizing over locking their rate or floating are these:
If rates go up, will your loan still be approvable? If you are treading on thin ice then by all means lock it in
To assess your stomach for risk - which situation would upset you more? If you locked in today and rates went down 1/2% by closing or if you didnt lock in and they went up 1/2%??
Use these questions to help you make your decision. You'll never know which was the right move until it's in hindsight anyway but at least it'll help you sleep at night.
Best of luck!