USDA's Rural Housing Service was another recipient of stimulus funds last week through HR 1. This comes as a surprise -- a representative from my local Rural Development (or RD) office said last week they were not anticipating a new appropriation of funds from Congress until March. USDA direct loans received $1,000,000,000 and guaranteed loans received $10,472,000,000 in last week's stimulus.
The country burned through RD funds last year as the loan program became wildly popular since it was one of the VERY few $0 down loan programs. Much like FHA, RD does not fund loans, but provides lenders with an insurance guaranty against the borrower's default. Since running out of funds, some lenders have ceased funding RD loans as they could not receive a guaranty from the Rural Development office. However, many lenders continued to fund RD loans in anticipation of receiving their loans' guaranties when RD funds were made available by Congress.
You may be asking yourself a couple questions:
What's the big deal?
Aside from the sheer quantity of funds, this demonstrates how determined Congress is to inject money into the housing market. I called my local USDA office today to gather their thoughts on receiving new funds, and they had no idea new funds had been appropriated! I actually told them about the money they had received and read the bill's verbiage to the representative. He said this was surprising because they usually get their new funds when the new budget comes out in March.
Why should I care about Rural Housing?
Well, if you're thinking about buying a home its a true $0 down loan program; and we all know how its nearly impossible to find those nowadays. Borrowers
who qualify don't need a down-payment and they can finance their closing costs, pre-paid items and certain repairs into their loan. The monthly payment is less than FHA's minimum 3.5% down because rates are comparable and there is no monthly mortgage insurance!
Do I need to buy a home in the "sticks" to qualify?
No, actually. You do need to buy a home deemed "rural" by RD; however, there are plenty of neighborhoods in the Austin-area that qualify, including some areas of Pflugerville, Hutto, Leander, Liberty Hill, Buda, Kyle, Lago Vista.
Click the link below and input a specific property address to see if it meets RD geographic limitations:
Do I need to make close to nothing to qualify?
No, again. There are income limitations, but you get some pretty hefty adjustments to your income for kids, elderly & verifiable childcare expenses.
Click the link below to use RD's easy income calculator:
USDA Rural Development really is a great loan program to utilize, especially with rates as low as they are. Not to mention, you receive an $8,000 tax credit if you're a first-time homebuyer. Hate to put it this way, but the government is practically paying people to buy homes nowadays.
If you're interested in learning more details on Rural Development loans, see below for a presentation I gave at Independence Title last week on the program.
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