Don't forget USDA Rural Development Loans - As low as 4.873%

Last weekend I wrote a purchase contract for a client using the USDA Rural Development loan program as his financing. He is a first time home buyer, moderate income and buying his home in a USDA accepted area. I have written a few blogs on this topic and quite honestly, CAN NOT imagine agents NOT knowing if this program is available in their area and if not in the immediate area, in the surrounding areas.

I am blessed to have a dynamic lender who knows this program inside and out. Every agent needs a lender like that on hand. NOT ALL LENDERS are qualified to handle government loans such as FHA, USDA and your local programs, nor do they know about them..

This program works great for the moderate income buyer, first time home buyer and those rebuilding after loss. With 100% financing, most Buyers get nearly all of their earnest money back at closing and no down payment is necessary at the table. An experienced Agent will know to ask for 3.0-3.5% in Seller Concessions and that covers most all the closing fees for your Buyer. The Listing Agent should expect the Seller Concessions if they are accepting government loans for their listing. As for the Buyer, their only expenses generally are their inspection fee (paid outside of closing most of the time) and appraisal fee which many times still gets covered in the Seller Concessions. To a BUYER this is great news. To an AGENT - it is even better because it opens the door to many potential Buyers.

I meet people all the time who think they can not buy a home because they do not have the 20% conventional down payment. That is old school these days. But with these special programs, you can turn these everyday, trying to rebuild people into home Buyers. We as agents need to stay informed about special financing programs, its not just the lender who needs to know them. Most always we have the first contact with the potential home Buyer.

I am not saying we need to know the dynamics of the loan as that is the lenders job, but enough information to encourage potential Buyers to seek the lender for further information.

The other great part to these programs is they are more forgiving to a Buyer with a "less than stellar" credit rating. For instance, if you have had a short sale, after 2 years USDA will lend you money to purchase another home if you have rebuilt your credit. This is great news given the short sale market and the Sellers coming out of them. They will loan after 3 years on a foreclosure and 2 years after a bankruptcy. They do require a credit score of 620.

THIS IS A HUGE TOOL for the agent in a USDA terriortial market. While the lender clearly handles the actual loan, I still educate my Buyers with what programs they are candidates for and let the lender put the bow on it !! I don't quote terms, or any of the details of the loan, but I do say - there is hope in a hopeless situation - lets give it a try.

Nothing finer in life than helping someone buy a home when they thought they couldn't. Your knowledge of special financing programs that are available will be responsible for that !! This loan program is NOT limited to first time home Buyers, but anyone that can qualify. There are certain income restrictions for each area that your lender will know but it is still a very flexible program. EDUCATE YOURSELF IN YOUR LENDERS PROGRAMS.. If they are limited in what they offer, find an additional lender who does these.

If you have a referral for a client to the front range area of Colorado, please send them my way. I would be honored to pay a referral fee and work with your client.