USDA LOANS

USDA Rural Development Single Family Housing Guaranteed Loan Program

The mission of USDA Rural Development’s Single-Family Housing Guaranteed Loan Program is to assist low to moderate-income rural homebuyers achieve their dream of homeownership!

Rural Development partners with approved local lenders to extend 100% financing opportunities to eligible rural individuals and families for the purchase of safe and sanitary dwellings. Guaranteed loans have assisted thousands of homeowners to purchase a home with affordable interest rates and loan terms.

Applicants must purchase a home within the eligible rural areas, and have a household income that does not exceed the established limits where the home is located.

Additional Guaranteed Loan Features include but are not limited to:

• 100% financing, no down payment is required. The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included.
• Guarantee Fee applies: may be rolled into the loan amount.
• Flexible credit guidelines. Non-traditional credit histories may be accepted.
• Fixed 30-year interest rates apply. Lenders and applicants agree upon interest rate.
• Qualifying ratios are 29% for housing costs and 41% for total debt. Lenders may request an exception to exceed these ratios when strong compensating factors are identified.
• No maximum purchase price. Qualifying ratios and the applicant’s stable and dependable income will determine home affordability.
• Eligible property types include existing homes, new construction, modular homes, Planned Unit Developments (PUD’s), eligible condominiums, and new manufactured homes.
• Eligible closing costs and lender fees may be included in the loan or paid by the applicant.
• Gift/Grant Funds/Mortgage Credit Certificates (MCC’s)/Seller Concessions are allowed.
• Eligible repairs and improvements may be included in the loan.
• Applicants apply with an approved lender of their choice.
• Not limited to first-time homebuyers.

The USDA Rural Development Home Loan is a 100% home loan but does have an Up Front Guarantee Fee. This fee can be financed into the loan up and above the purchase price. At present, there is no monthly Mortgage Insurance Premium on this loan like you would have with most high Loan to Value (LTV) loan programs.

This Rural Development Home Loan is designed for those people that fall into the income range of the Area Median Income, and the county limit tables can be found at the Rural Development Home Loan website at http://www.rurdev.usda.gov/SupportDocuments/NC%20GRH.pdf 

This can disqualify some borrowers because they make too much income to qualify so it is important to submit a full loan application early to verify which programs you may qualify for.

For those who have very limited savings in which to purchase a home, another advantage that this loan has is that you will be allowed to finance in closing costs, prepaid interest, and escrows if the home appraises above the purchase price.

This is a great advantage if you have not required the seller to pay your closing costs and may enable you to get into your home with no money out of your pocket.

At this point, I would like to remind you of the importance of getting me and my Referral Partners involved in your home purchase process as early as possible.