USDA Rural Development – Last Loan Standing For 100% Financing
And then there was one. With the recent struggles in the mortgage and housing industries the availability of true no down payment programs have all but vanished. All, but vanished except for little known and little used program offered by the US Department of Agriculture and their Rural Housing Division.
USDA Rural Housing Loans have been around for a while, but with all the easy money out their they were often ignored by home buyers and mortgage lenders alike, but no more. As the LAST remaining program allowing for 100% financing I expect their use will see a pretty dramatic rise in the next couple of years.
Created to foster development in America’s lesser populated areas, The USDA Rural Housing program is actually quite strong. Beside the 100% (102% with the funding fee) aspect they also have NO mortgage insurance. Like FHA, they offer flexible credit qualifying, reasonable debt to income ratio allowances, strong fixed rates, and little barrier to entry. They also will allow you to finance up to 100% of any repairs you may want to do and base the loan on “AS-IMPROVED” value. So that foreclosure down the road that is a great deal, but needs a little work? Yeah, you can buy it and finance the repair!
There are a few caveats to the program however. For one you need to live in an area that is low population density. Secondly, there are some income restrictions as well based of a percentage of what HUD has determined the median income level for your area to be. Don’t let either of those requirements scare you though, they are more generous then you might think.
If you have questions on whether a property or your income will qualify click on the link below and we will look it up for you. In the meantime, keep that down payment in the bank and get out there and find you a house.