The USDA Rural Housing Program is a 100% financing, no down payment home loan program for homeowners purchasing homes in certain designated areas throughout the country with populations that are generally below 50,000 people per designated geographic area. Here in Arizona this includes areas such as Arizona City, Buckeye, Casa Grande, Queen Creek, Maricopa, Waddell and even parts of South Gilbert. It is an excellent option for buyers purchasing in these areas and has some of the lowest borrower default rates of all government backed loan programs. However, this past year, due to increased demand and limited funding for the Rural Housing loans, the funds were exhausted and the loan program was essentially put on hold.
Well, the program is now back through the help of the H.R. 4899 Supplemental Appropriations Act of 2010, but with a caveat. Previously, there was a 2% one time funding fee for all borrowers who obtained a USDA loan. However, the program now has increased its funding fee to 3.5% of the loan amount for all borrowers. This will make the loan a little costlier to obtain for borrowers, but the program continues to have no down payment requirement and no mortgage insurance, still making it an affordable option for many. In addition, the increased funding fee will help to preserve the program and keep it from running out of funds for the rest of the year and going forward.
This is a positive development for borrowers looking to purchase home in Rural Housing designated areas. As always as additional information becomes available we will provide updates.
For more information on current programs for existing and potential homeowners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Comments(1)