Can you really buy a house with only $500 cash?
Yes and it happens all the time. (I have one settling on 7/26 with NO MONEY!) Using a USDA loan you can buy a house with no down payment. The seller can contribute up to 6% towards closing and you can even roll closing into the appraised value above the sales price.
All this means that anyone who qualifies can easily buy a house in a USDA eligible area using as little as $500 cash!
So Whats The $500 Cash For?
Its called an "Earnest Money Deposit" and represents your good faith deposit on the contract. The seller agrees to take the house off the market, can not accept any more offers, and agree to sell it to you for the agreed upon price in exchange for your deposit. If you change your mind, they keep the money. Most houses can be put under contract for $500.
Whats The Catch?
The catch is you have to qualify for a USDA Loan. The two biggest barriers are income limits and location restrictions. Check my website for MD, VA, PA & WV USDA Areas. In other states check here.
Click for USDA Income Limits in MD, VA, WV, & PA
USDA Guidelines
There are a few other guidelines to be aware of when choosing a USDA Loan
- Only a 30 year fixed loan (no 15 yr, ARM's or interest only options)
- Primary residence only (not for investment or second homes)
- 620 minimum credit score (alternative credit is allowed)
- Mortgage insurance (2% up front that is financed and .3% annually)
- No down payment required
- Liquid assets can not equal more than 20% of sales price (does not include 401k , IRA, or retirement investments)
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