Rural Development/USDA Has Funds Once Again, in fact they have $22 Billion Dollars’ worth of funds. But just like the Cadbury Easter Eggs, Rural Development funds will not be around for long.
In fact just like the Cadbury Easter Eggs they have traditionally disappeared around the same time of the year. So we need to make sure that we take advantage of these funds for our clients while they are available.
When compared to other loan products it is easy to see why a Rural Development/USDA Loan is a great deal for Borrowers. Below is a chart comparing a USDA, Conventional, and FHA Loan. Right now all three of these loan products are at about a 4% interest rate
If The Sales Price Is $225,000 At 4%
- The Base Loan amount is higher for the USDA because there is no downpayment.
- It has a higher Financed MIP than the other two Loan Programs
- Therefore the Total Loan Amount is higher the other two Loan Programs.
- And the Principal & Interest payment is higher than the other two Loan Programs.
- But and this is a huge but, the monthly MIP is 2/3 less than of the Conventional Loan monthly PMI and almost 3/4 less that the FHA monthly MIP
- That is a huge difference that translates into a lower monthly payment than the other two Loan Programs, and that is what is truly important, the overall monthly payment.
- By having a lower monthly payment, the Buyer to purchase a more expensive house than they would otherwise be able to under the other two Loan Programs.
Eligible Properties
- Single Family House
- Condo’s
- Must be within Eligible Area
- It only requires a Conventional Appraisal
- The house cannot have an in-ground pool, but the house can have an above ground pool.
Features
- It is a true 100% Financing, because the Funding Fee can be included into the Base Loan, so the Loan Size can be up to 102% of the Selling Price.
- Seller can contribute up to 6%, which means that all the Closing Costs can be covered by Seller Contributions in most cases.
- Monthly Mortgage Insurance is a .30 multiplier, this is by far less than any other Loan Program, except VA which does not have Monthly Mortgage Insurance.
- 102% LTV plus 6% allowed Seller Contributions, equal a Buyer purchasing a house with all most no money out of their pocket.
- It is not limited to First Time Homebuyers, all Buyers can use this program as long as they fall into the Rural Development/USDA Income Limits.
All this adds up to a great deal for our Buyers/Borrowers, but only if we take advantage of the available funding while it lasts. Because remember just like the Cadbury Easter Eggs, Rural Development/USDA funds will not be around for long.
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Who To Call For Your Mortgage Needs In Connecticut:
George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.
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