No more 100% financing? What is happening to the USDA Rural Development Loan :
Many of the agents who live in rural areas like I do have come to appreciate the USDA rural development loanbecause it seems like the go-to loan. Why would anyone turn down no , no MIP, and low interest rates all packaged with minimal red tape? They wouldn't... and since the loan has become so popular, we have just received notice that this program is scheduled to run out of funds by the end of April 2010.
This is very sad for real estate markets like mine, because now not only are we going to be missing this cherished program, we also have to start telling clients they have to go to FHA... which has its own changes that none of us are very happy about (see my previous blog posts). USDA had similar requirements for appraisals and qualification as FHA, it just had lower income caps- which were not hard to meet in rural areas.
Just so everyone knows exactly what I'm saying here: This year (2010), we will no longer be able to offer our customers 100% financing through USDA. Now, with that said; there are other programs. There is still the VA option for military, former military, and retired military. There are also some programs that private lenders can offer that allow buyers to do 80/20's but they are few and far between and difficult to qualify for.
Let this be a message to all the rural real estate professionals that we are going to have to be creative and stay up to date with all of the lending opportunities that are available to us. Make sure you are comfortable with your lending partners and communicate with them often. The reason I found out about these changes early this morning is because I have great lender contacts that include me on their mailing list when they send out updates. Ask your lenders to include you on theirs.
Good Luck!
For now, happy buying and selling.
Brittany Purcell
Success Realty
770-713-4278
Real Estate in Athens, Jefferson, & Commerce, GA
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