Howard County, Maryland - USDA Approved Zero Down Home Mortgage Loans
Howard County home buyers will be pleasantly surprised to learn that they can purchase a home with virtually no out-of-pocket cash requirements through the USDA Rural Loan program. This loan program is available throughout the majority of Howard County that are deemed rural based upon population census tract analysis. Eligible USDA Rural Loan areas include Clarksville, Fulton, Glenwood, Jessup, Lisbon, Marriottsville, North Laurel, Mt. Airy, and Savage. Areas not permitted under the USDA Loan program include Columbia, Elkridge, and Simpsonville.
The USDA Loan is a 30 year fixed rate mortgage, that doesn't have a maximum loan amount, and the following borrower benefits:
- $0 Down Payment
- $0 Monthly Mortgage Insurance Premiums
- $0 Cash Required at settlement provided the seller pays the home buyers closings costs and escrows AND/OR the house appraises for more than the purchase price, which enables the borrower to include settlement related fees into the loan up to the appraised value
This loan program is designed with the intent of facilitating home ownership in rural communities for moderate income households. Since the vast majority of Howard County isn't built-up the USDA Loan is a viable loan program that is often overlooked. There are several loan parameters that must be addressed when considering whether the property and home buyer will qualify for the USDA Loan. These parameters include:
- The middle credit score for all borrowers on the loan is a minimum 620
- Maximum household income is capped at $122,250 for a family size of five or more and $92,600 for a family size less than five. If the household income exceeds these amounts reference the Howard County USDA Mortgage Loan Calculator to determine if deductible items can be applied to reduce the gross income for qualification purposes
- The property must not have an in ground pool
- Land value stated on the appraisal report can't exceed 30% of the overall property value
- Reference the USDA Program Guidelines for other loan parameters
Because the USDA loan program doesn't have a monthly mortgage insurance premium when comparing a USDA loan to FHA loan a home buyers are often surprised to find that their monthly mortgage payment is less than a FHA loan payment, despite the fact they are financing a loan amount that is higher. Because there is a monthly mortgage insurance requirement on FHA and not USDA loans, a USDA loan will allow the buyer to obtain a lower monthly mortgage payment or purchase more house for a comparable payment. Reference the USDA Vs FHA Cash Savings Calculator to better understand how the USDA loan with a larger financed mortgage offers a lower monthly payment compared to a FHA loan.
To learn more about the USDA Rural Development Mortgage Loan go to MarylandUSDA.com or call (410) 552-5912 so you can quickly get answers to your mortgage loan questions and determine your eligibility for the USDA No Money Down Loan Program.