USDA Rural Development Guaranteed Loans... One of the Few 100% LTV - No PMI Loans Available

By
Real Estate Agent with RE/MAX Executive - The Powell Team NC License# 202938

U S D A and Rural Development Logos  Committed to the future of rural communities    

Not many Realtors in Concord NC and the surrounding areas are aware of this great loan program offered by the USDA.  I suspect the same is true in other states across the country.  This program is very similar to the Farmer's Home Administration Loans that used to be offered by the USDA.

USDA Rural Development Loans are available for low to middle income owner occupant borrowers.  It is a 100% loan to value program... that's right there are still a few NO MONEY DOWN programs available.  This loan also has NO PMI!

Only a few lenders are qualified to underwrite these loans, so make sure to check out the List of Approved Lenders.

Here's a list of eligibility requirements:

  • Buyer must occupy the property as their primary residence.

  • Buyer cannot currently own an adequate home.

  • Buyer cannot have sufficient cash for a 20% down payment plus pay typical loan closing and relocation expenses.

  • Buyer must be a U.S. citizen, a U.S. non-citizen national or a "qualified alien". 

  • Buyer must have a stable and dependable income for repayment ability.

  • Buyer must have a credit history that indicates a willingness to meet obligations as they become due.

  • Buyer must have an adjusted household income that is within Rural Development guidelines based on the number of persons who will occupy the home.  

  • The property purchased must be a residential property that is located in a Rural Development eligible area

  • One of the biggest hurdles in getting a home using a USDA Rural Development Guaranteed Loan, is finding a home that is located in a Rural Development eligible area.  Location restrictions vary from county to county; some counties are completely eligible (such as Lincoln County NC), in some counties the property needs to be in a County Taxes Only area (such as Cabarrus County/Concord area NC), and in some counties only small portions are excluded (such as Iredell County/Mooresville area NC).  

    So, when helping a buyer purchase a home using this financing program, it is important to investigate the eligible areas within the county/counties where your client wishes to live and set up your property searches accordingly.  Also, you and/or your client can check the eligibility of a property by visiting the Rural Development eligible area map online.  That way, you won't waste a lot of time looking at  properties that won't qualify.

    I've helped several buyers purchase homes using this program, it works great and can help a buyer qualify for a more expensive home since there is NO PMI!  Plus, if a buyer doesn't have any money for a downpayment, there currently aren't many other options for 100% financing programs available.  If you have any questions about this program check out their website or contact me anytime.

    Has anyone else helped a buyer get a home using this program?

     

    close

    Re-Blogged 2 times:

    Re-Blogged By Re-Blogged At
    1. The Powell Team- Remax Executive Realty 09/08/2008 07:14 AM
    2. Randy Powell 09/12/2008 09:32 AM
    Topic:
    Mortgage / Finance
    Location:
    North Carolina Cabarrus County
    Groups:
    Realtors®
    RE/MAX Active Rain Bloggers
    Cabarrus County North Carolina...The Racing Side of Charlotte
    Special Mortgage Programs & Down Payment Assistance Programs
    USDA Rural Development Loan Group
    Tags:
    real estate information
    usda
    charlotte
    concord
    rural development
    mortgage information
    real estate
    nc
    100 financing
    special mortgage programs

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    Rainer
    1,193
    Regina Bryant
    REMAX Warner Robins - Warner Robins, GA

    Hi, Cheryl,

    Thank you for that interesting blog. I had heard of this program but didn't know much about it. I've tried to check out the lenders for this program on the link you gave, but it keeps coming up blank.  Any suggestions?  Right now I have a rural property that might qualify. Do you know if the program covers manufactured homes on real permanent foundations?

    May 28, 2008 04:02 AM #1
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Hello Regina: Click the following link, Georgia Rural Development, and find the contact number for your local office.  They will be happy to send you a list of local lenders/loan officers who are certified to do USDA Rural Development loans. 

    Unfortunately, Rural Development only finances NEW manufactured homes... they don't financing for manufactured home resales. 

    May 28, 2008 03:00 PM #2
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    You're Welcome Regina!

    May 30, 2008 04:39 PM #4
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Hello Tiny: Did you have your closing yet?  Sorry, I was on vacation and missed your comment.  I have closed several Rural Development deals...let me know what your questions are and I'd be glad to help if I can.

    Jun 11, 2008 01:59 PM #6
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Hello David M: smileysThanks for sharing some of SunTrust's special loan programs and reminding us all of how important VA and FHA loans with a dpa program are to buyers in the current mortgage climate. I need to get more information on the Portfolio Loan Program that you mentioned.

    You should write your own blog post containing the information you provided in your comment.  Possibly even 3 separate blog posts.  If you do, don't forget to join my group Special Loan Programs...Do they still exist? and include your new blog posts in the group!

     

    Jun 12, 2008 10:58 AM #7
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Thanks for sharing David A: I appreciate you sharing the details of Bank of America's 100% Doctor Mortgage Program!  smileys

    You should consider writing a blog post containing the information provided in your comment.  Don't forget to join my group Special Loan Programs...Do they still exist? and include your new blog posts in the group!

    Jun 12, 2008 11:03 AM #8
    Rainer
    21,743
    Josh David
    Bridgeview Bank Mortgage - Tampa, FL
    Purchase Specialist... www.joshdavid.us

    HI Cheryl, I have closed on USDA programs before, they are a little tricky until you close your first one. Like you mentioned above the kciker is finding a property w/in the demographic approved areas for USDA loans.

    I also provide FHA financing w/ Down Payment Assitance! This can be a truly 100% loan for the client, and the only out of pocket expense would be for the appraisal. This allows some what of a commitment from the buyer to the lender.

    I have a few more prodcuts I would like to list as well in a seprate posting.

    Thank you for the invite, and happy Selling!

    JD

    Gateway Bank, FSB-Loan Officer

    Jun 16, 2008 01:12 AM #10
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Hello JD: Thanks for sharing your thoughts about USDA Rural Development Guaranteed and FHA w/Down Payment Assistance loan programs.smileysI look forward to hearing about your other special loan products! 

    Jun 16, 2008 03:59 AM #11
    Rainer
    26,964
    Laura Moore Godek
    Laura Moore Godek, PC - McHenry, IL

    I needed a quick refresher on USDA loans for a client.  Thanks for the post.

    Jun 19, 2008 06:18 AM #12
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    You're Welcome Laura!  smileysIf you need further information don't forget to call your local USDA Rural Development office and request an information package, the information provided is really helpful.  Good luck with your client!

    Jun 22, 2008 04:18 AM #13
    Rainmaker
    97,935
    Gerry Suarez Jr.
    Mortgage Financial Group, Inc. - Mount Dora, FL
    Expert Home Loan Advisor

    Cheryl,

    Welcome to the group and thank you for re-posting here! We look forward to your continued participation!

    Jun 27, 2008 07:36 AM #14
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Thanks for inviting me Thomas!  I've been an advocate of USDA Rural Development loans (Direct and Guaranteed) for several years now.

    Jun 28, 2008 04:47 PM #15
    Rainmaker
    52,331
    Paul Dunn
    Tucson, AZ
    former orginator

    Cheryl,

    That's a great post and the USDA Rural Home Loan is going to become even more important now that down payment assistance programs are going the way of the dodo bird!

    Paul Dunn
    Arizona USDA Rural Home Loans
    Tucson's #1 FHA Loan Expert

    Jul 24, 2008 02:59 AM #16
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Hello Paul, I agree... if a buyer doesn't have money for a down payment, can't get a down payment gift from a family member, and isn't a veteran, then USDA Rural Development loans are going to be the only game in town. 

    I got a good chuckle out of the dodo bird comment.  :-)

    Maybe FHA will actually come out with a 100% financing program like I've heard rumours about.  Have you heard anything about that?

    Aug 16, 2008 07:02 PM #17
    Rainer
    2,657
    Ed Butler
    New American Mortgage - Fort Mill, SC

    Hello Cheryl,

    I am an active rain newbie! I saw your post and I found it very interesting. Great information and links. I have been one to rely of FHA and VA. The company I work for also do NC and SC Bond and USDA. I have have done the Bond loans in the past, but never the USDA. I am scheduled to take a CE course on it. Like you said it is one of the last true 100% programs out there. Every lender now pretty much offers the same products and it comes done to service. I feel the more tools and knowledge to meet our clients needs the better. We can educate the buyer so they can make an educated informed decision.

     

    Aug 18, 2008 03:03 AM #18
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Hi Ed: Thanks for your comments....I agree totally!

    Aug 21, 2008 08:45 AM #19
    Rainer
    30,838
    Sue Botelho
    Waterstone Mortgage Corporation - Fort Walton Beach, FL
    USDA Rural Housing Mortgage Pro

    The approved list of lenders you've attached is great; however, this is actually the investors that the loans are sold to.  Many of us are approved to underwrite, close and fund these loans without being a "national" lender.  I am licensed in FL, GA, AL, NC, SC and TN for rural housing loans and we underwrite them ourselves - takes about a day, total!

    There is a Northstar Mortgage on the list but it isn't us.  We are Northstar Mortgage Group.  I am actually getting interviewed tomorrow for a national mortgage lender message board as the "USDA Rural Housing Loan Queen"!  this is my favorite program!

    Sep 30, 2008 04:12 PM #20
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Hello Sue, I know that there are A LOT more lenders who are approved to do Rural Development Guaranteed Loans now.  Many lenders jumped on the band wagon once other 100% programs became unavailable.  The agency hasn't kept their list up to date on their website. Lenders who are approved should complain and ask that their names be included on the agency's list, I didn't compile or attach the list... I only included a link to that page of the USDA Rural Development website.

    What are you referring to that takes about a day?  Doesn't the entire loan process, from application to close, generally take 3-4 weeks?

    smileysThat's great that you do so many Rural Development Guaranteed Loans, I think that it is a GREAT program as well.

    Oct 01, 2008 03:39 AM #21
    Rainmaker
    317,635
    Cheryl Powell - The Powell Team
    RE/MAX Executive - The Powell Team - Harrisburg, NC
    Concord,Harrisburg & Charlotte NC Area Real Estate

    Jordan,  You need to contact your local USDA Rural Development office to get the answers to your questions.  Best of luck.

    Jul 09, 2009 01:59 AM #22
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    Cheryl Powell - The Powell Team

    Concord,Harrisburg & Charlotte NC Area Real Estate
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