The Zero Down Home Loan does exsist

One of the biggest Imageroadblocks for home ownership is not having a down payment. Lets just be real here Americans many of them…not all, but many, have financial problems that plagued their past and some get dragged into their futures. With unemployment and minimum wage continuing to be major never ending issues, it can be hard to manage to save 3-5% for a down payment for a home when you have current bills,debts and a family to take care of.

If you are one of the Americans that falls into this category,shouldn’t you be able to buy a home if you would like to???

Yes you should, you work hard, you meet the credit requirements and maybe have worked hard to rebuild your credit history back up, to only find out you need to save up a bit more money to get your foot into the door.

The USDA and VA has an “app” for that,by app I mean loan application.

The VA loan is 100% financing but only available to most active military personnel and veterans. If you do not fall into this category then there is another option.

The USDA Rural Development Single Family Housing Loan Guarantee Program has been providing 100%…I repeat 100% mortgage loans through their lending program for a few years now. 100% is just what it says  a 100% loan with zero…0…zilch…nothing down.

How is this possible? What is the catch??

ImageThis Loan provided by the USDA is sometimes called the Rural Housing Loan or Section 502. You may think the US Dept of Agriculture loan must only be for farmers or people who want to purser farming, but think again. If you find a home located in a “rural” area and meet USDA income requirements you maybe eligibility for the low interest rate and zero down payment mortgage program.

I know what you are thinking….you had hopes of landing a zip code in the hottest neighborhood in the city, of course you can still do that…work on budgeting and get to SAVING, you may not be able to move within the next month but a couple of months down the road you could be well on your way into the hottest hoods in Nashville.

If you are the type of person that does not mind a change of scenery out in the country, try your luck looking in the rural areas that surround the city of Nashville for a home. These days you do not have to trade convenience of the city, just becuase you are considering moving out to a surrounding. Some popular  rural areas near  Nashville to find elegible homes include, some parts of Sumner, Cheatham, Rutherford,Wilson,and Williamson County. These areas may have eligible homes.. All of those locations are less than an hour from the downtown Nashville city life. You can live your dream of owning a home and drive into town and visit those hot spots, that’s having the cake and eating too if you ask me.

Well How does it work and what are the benefits?

ImageUSDA mortgages are similarly structure like a conventional 20% down loan and FHA loans which are 3% down. The major difference is the down payment and mortgage insurance requirements.

The USDA loan program requires no down payment and the purchase of the home can be financed fully 100%. The finance price can also include repairs and home improvements,and the dept of agriculture only asses a 2% mortgage insurance fee for the loan, which can be added into the loan amount at closing. This cannot be done with FHA loans.

The mortgage insurance fee is just 0.40% regardless of how large or small of a down payment. This is less than half the amount with a private mortgage insurance compared to a conventional load and 1/4 of the charge from FHA loan (themortgagereports.com).

USDA loans also have no loan size limits such as with FHA,VA or conventional…which means you can get a larger loan of course if you qualify and can afford it. The USDA offers a 30 year fixed rate mortgage own and their own USDA refinance program.

Qualifications…Sign me Up!!!

Main Qualifications

  • You must buy a home in a USDA-eligible area
  • Household income must not exceed 115% of the areas median income
  • must be 2 years after filing for bankruptcy
  • must not have a home within communing distance from home you are trying to purchase
  • Must Be first time home buyers or have not owned a home in 3 years

The USDA has a handy eligibility calculator to confirm your USDA eligibility, but an informed loan officer can let you know also.

The USDA changes its rural areas very regularly and what once was an eligible USDA home one month may not qualify the next. If you are interested in finding out if you qualify for this type of loan or what to know what homes are available in these “rural” areas contact me

 

 

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