I hadn't heard of this loan program before a great local lender pointed it out...
The USDA has a 100% financing program called Rural Housing Loans. My first thought - this must be for farms or farmland. It's not! These loans can be used to purchase a wide variety of homes.
There are two big catches: location and income level.
Surprisingly, most of the Triangle area DOES qualify, as long as you're not in the Cities of Cary, Raleigh, Durham, or Chapel Hill - the population there is too large, and this program was created to help potential homeowners in rural areas. But that leaves a lot of areas open.
As you can see, all of Chatham County is qualified, as well as Harnett and Johnston counties. Parts of Fuquay-Varina, Holly Springs, the outskirts of Apex, parts of Knightdale, Wendell, Clayton, and Zebulon are all qualified. To check if the address of the home you're considering qualifies, click here.
The next catch is income level. If you make over a certain income, you can't apply for this program. Income limits depend on how many people in your family are over the age of 18.
There are two different types of loans in this program - Section 502 Guaranteed Rural Housing Loan Program and Section 502 Direct Rural Housing Loan. You'll want to ask an expert for the details of the differences in these two loans.
For example, a family of 5 living in Chatham County (2 adults and 3 children) can have a maximum income of $88,550.00 for the Guaranteed Rural Housing Loan Program, but a maximum of only $61,600.00 for the Direct Rural Housing Loan Program.
However, before you knock yourself out of the running, check with a loan professional like Steve and Eleanor Thorne Meridian Residential. These income levels represent ADJUSTED INCOME, after deductions for various things like child care and child credits.
For instance, that family of 5 could have a gross income of $101K per year, and $12,000 yearly in child care expenses. This and other credits could place adjusted income just below the maximum $88,550, meaning they could be qualified for the guaranteed program.
The maximum allowed adjusted income varies by family size and location, so to check and see if you qualify, click here
This seems like a program worth checking into. I'm not a mortgage professional, so make sure to ask someone who is for all the details, and to see if you qualify. For more information on USDA loans contact Steve and Eleanor Thorne Meridian Residential. 919-649-5058
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