Despite the gloom and doom in the marketplace there are still plenty of great financing options.

One such program is especially attractive, if not the most attractive of all 100% financing in the marketplace today.  The program I refer to is the USDA Guaranteed Home Loan. 

"It is simply hard to compete with the USDA Home Loan."  - Tony Jones, USDA client closed 7-02-08

USDA is designed to stimulate rural development.  Properties must be located in eligible rural areas.  By definition, generally towns with a population of 20,000 or less that are removed from urban centers. 

I live in the Roseville area of California so for me towns such as

• Lincoln, Cameron Park, Colfax, Dixon, Auburn, Placerville, Pollock Pines, Wilton, Winters, Grass Valley, Orland, Galt and many other cities are all eligible for this program

Here is how the program works:

• Income limits to 115% of US median income (for most counties this is $65,000 for a family of 4)
• 100% financing with no limit on seller paid contribution for rate buy-down, etc
• 2/1 Buy-downs are available
• 2% upfront MI fee is financed into loan and as a result, the loan will not have Mortgage Insurance
• Loan may include closing costs on a purchase
• No cash reserves
• Minimum FICO is 600 for a 29/41% max debt ratios; however with a 660-700 FICO ratios may be increased higher to 50%.

I just pulled up this property in Lincoln July 18th which is listed for sale at $219,900 located at:

2525 Saint Andrews Drive Lincoln, CA which is eligible for the program

Realtor contact: Forth Hoyt 916-248-7777

Today's Rate for USDA for this property = 6.50% with no lender points fixed for 30-38 years.

No MI financing!

$219,900 + 2% upfront MI fee = $224,298 total loan

33 year fixed rate mortage = $1,377 fixed loan payment + $30 insurance + $220 Taxes =

$1,627.00Total PITI 100% loan if you wanted to buy this home.

Total closing costs are somewhere in the vicinity of $4,200 and can also be financed or paid by the seller.

Compared to other programs such as FHA which has an upfront MI fee of 1.5% but also has a monthly MI fee of $75 by comparison:

$1,410 (same fixed rate but 30 yr term) + $30 insurance + $220 taxes + $75 monthly MI =

$1,735.00Total PITI for FHA

USDA beats FHA by $108 per month. 

USDA is also a conventional loan that requires no pest or FHA requirements.

There is also no cut for declining market policy so this is a pure 100% loan. 

For more info, simply email me at: mortgageplanner@247refi.com

Or feel free to call or text me at: 916-813-4003

Mike Smith

USDA Specialist