100 percent Financing USDA Loans are available again after being suspended for the past few months due to a lack of funding.
On July 27th 2010, the United States House of Representatives Passed Bill HR 4899, which has funds built into it for the USDA Guaranteed Rural Housing Program. President Barack Obama put his signature on the Bill 2 days later.
The greatest benefits of a USDA loan are:
- No down payment (100 percent financing)
- No mortgage insurance
- 30 year fixed interest rate
Although USDA loans do not require a down payment (100 percent financing) and there is no monthly mortgage insurance premium, there is a one time, upfront guarantee fee.
The guarantee fee has been increased from 2.125% to 3.5% of the purchase price. This fee is financed into the loan, however, keeping the closing costs down.
Some of the “Differences” for qualifying for a USDA rural development loans are:
Property Qualification Requirements – A home must be located in an USDA eligible area. The simplest way to determine if you are in one of these areas is by entering an address into the USDA Property Eligiblity map.
If the property address is determined to be in an eligible area, you may use a USDA loan to purchase the home.
Income Requirements – The income limits on a USDA loan are based on number of working adults in the household regardless of whether or not they are on the loan. There are a series of credits that are afforded for child care and dependents under 18 as you calculate the family’s “qualifying income”. The USDA site has this Income Calculator available for you to determine whether or not your family will qualify.
If you have any questions about qualifying for a 100% financing USDA loan, feel free to shoot me an email at JeffA@BroadviewMortgageCorp.com, leave a comment below or call/text me on my cell phone – 951-264-4026