Over the past several years, the Government and the Mortgage Industry as a whole has continuously tightened the rules and regulations when it comes to buying a home. It has gotten to the point where even people with stellar credit and a solid borrowing history still need a hefty down payment before they can purchase a new house.
Fortunately though, there is a new program available from the United States Department of Agriculture that offers 100% financing for people that live (or are looking to live) in rural areas.
Why would they do this? Is it too good to be true? Well, long story short, the government offers the option of “zero money down” so that people who live in rural areas (who may have always been renters) can finally have access to affordable mortgages. Consequently, this type of loan is often the best scenario for people who live in the country and want to find a place they can call home.
Another amazing feature of this loan is that 100% of repairs that need to be made to the property can actually be finance into the loan based on “after repair value.” What this means is that the USDA Rural Development Loan can also be considered a renovation loan as well. Because of all these qualities, these loans are quite possibly the best option on the market today.
So you may be asking, what features does this type of financing entail? What can I do to make this work for ME? Well, here are some of the benefits of the USDA Rural Development Loan:
- NOT ONLY FOR FIRST TIME HOME BUYERS - This isn’t like the tax credit!
- LOW INTEREST RATES – Just because you are getting a good deal doesn’t mean you will pay more over the long run. Rates on these loans are generally better than VA and similar to FHA.
- NO PMI (MORTGAGE INSURANCE) - This makes your monthly payment even lower.
- NO LIMIT ON PURCHASE PRICE - Buy what you want! (Property must still be reasonable for your income)
- NO MINIMUM FICO SCORE- People that have zero credit history may even qualify. Those with a credit histoty should have a reasonably good score. Call for more details.
- SELLER CONCESSIONS UP TO 6% - What this means is that the person selling the house can pay for all or some of your closing costs, which saves you even more money.
- NO CASH RESERVES REQUIRED - Most loan programs require you to have a certain amount of money saved up before you can purchase a home. This is not the case with the USDA Rural Development Loan.
- 100% FINANCING!!! - NO DOWN PAYMENT IS REQUIRED. That’s right. NO DOWN PAYMENT.
So next is the issue of actually qualifying for the loan. Here’s what you need to do, and some of the main requirements involved:
- You must be a legal US citizen or legal permanent resident.
- Your income must qualify for the house or property you desire. As a point of reference, your mortgage payment should not exceed 29% of your gross monthly income.
- The property must be used as a residence (no farms or commerical deals).
- You can’t already own a suitable residence in the same area as your proposed new property.
- Your total family income should not be more than 115% of the median United States income.
Probably the biggest requirement for this type of loan is that the property MUST be in a qualified rural area. What constitutes a qualified rural area? Well, mostly this has to do with Income and Population Density restrictions, but you may be surprised to find out just how many areas around Dallas and Fort Worth in fact qualify. As always, you can call or CONTACT US and we will review your situation and see if you (or a house you desire) qualifies. (free of charge too!)
