One of the little known benefits of buying real estate outside of major metorpolian areas is the fact that due to the "rural" location of these areas, homes in these locations qualify for the USDA-Rural Development Zero Down Payment Home Loan That means that under the guidelines of this state-backed mortgage program, the borrower is not required to make a down payment nor are they required to have a monthly private mortgage insurance premium.
On a $250,000 home, the savings is two-fold: First, borrowers saves $8,750 in respect to the required FHA down payment (3.5%) and two, borrowers save $183/month in MMI (monthly mortgage insurance). These two savings make this program a "big win" for first time homebuyers helping them qualify for more home for less money.
There are however three main pre-requisites for qualifying for this program:
(1) Borrowers must qualify under the maximum household income cap;
(2) The home must be located in a USDA eligible region; and
(3) The borrower(s) must have over a 620 Credit Score
(1) The borrower must not exceed the annual household income requirements (example. a family of 1-4 must not exceed a household income greater than $74,050 annually.) I recommend a 3-4 minute phone call to discuss your ‘total household income' under USDA guidelines.
(2) Second, the borrower must purchase a home in a USDA-RD approved region. - CLICK HERE to verify a USDA eligible address. I always recommend that my clients work with a Real estate agent that understands the USDA Rural Development Program. From helping you find and locate a USDA RD eligible home, to understanding the funding and closing process, it is key that your agent understand this program.
(3) USDA Credit Score Guidelines. The USDA program is about as "flexible" as any loan program available today. In some cases, borrowers may even qualify with collections, a recent bankruptcy,
If you are interested, I offer all of my clients a Free No Obligation Mortgage Credit Analysisto address a clear game-plan for establishing A+ credit and detailing the home buying process.
As always, if you have any questions, please feel free to contact me directly at 866 435 6553 or visit me online at www.mcdonaldmortgage.com
Bill McDonald 866 435 6553
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