Montgomery County Maryland - USDA Rural Development Home Mortgage Loan - No Money Down
If you are thinking about purchasing a house in either the Northern or Western parts of Montgomery County there is a loan program called the USDA Rural Development Mortgage Loan that will allow you to buy a single family house, townhome, or even a condominium in areas such as Barnesville, Beallsville, Boyds, Clarksburg, Northern Damascus, Dickkerson, East Laytonsville, and Poolesville that allows for a zero down payment, zero monthly mortgage insurance, and if the sellers pays the settlement closing costs and/or the property appraises for more than the sales price allows you to finance the closing costs up to the appraised value.
The USDA Rural Development Home Mortgage Loan program is a fantastic loan option designed to assist home ownership in rural communities. Unfortunately, due to the high population density, the majority of Montgomery County, doesn't qualify for the USDA Rural Development No Down Payment Loan program.
However, there are areas that do qualify for the USDA Rural Development Loan which allows home buyers to obtain a house with the following flexible lending ruquirements:
- Required Money Down: Zero
- MIP or MI Monthly Costs: Zero
- Funds Needed For Settlement: Zero (provided the seller is paying the closing costs and/or the appraised value of the house is greater than the sales price which allows the settlement costs to be rolled into the loan amount up to the appraised value)
- Maximum Loan Size: Not Applicable
- Middle Minimum Credit Score: 620
- Land value in relationship to overall property: 30% or less
- Maximum income caps household size
- 1 - 4: $92,600
- household size 5+: $122,250
- if household income exceeds these guidelines certain deductions are allowed to lower the gross income for qualifying purposes. see below for more information
- The property has to conform to "FHA Move-In" Requirements. This means No Fixer Upers
Since the USDA Loan is for moderate income households there are limits on the family household income. These limits, as mentioned above, are $92,600 and $122,250 based on family sizes of one to four and five and above. If the family income exceeds these limits USDA does allow for certain deductions to be considered as an offset to reduce the gross household income. These offsets include such items as documentable child care expenses. To quickly determine whether you are eligible for a USDA Loan when you make above these income amounts reference the USDA Maryland Income Qualification Calculator.
One other important consideration when evaluating the USDA Loan. Often home buyers with limited down payments believe the FHA Loan is their best solution. Consider though that USDA Loans don't require a monthly mortgage insurance premium. With no monthly MIP the USDA Loan has a lower monthly payment, despite the fact that the overall loan size is greater than a comparable FHA loan. So if monthly payment is important think USDA Loan. If you want to purchase more house at the same payment of a FHA loan think USDA Loan. Use this USDA Vs. FHA online mortgage calculator to quickly calculate your cash flow savings achieved through the USDA loan program.
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 this No Money Down Loan Program.