Rural Development Loans in Nashville TN
While homes in the city limits of Nashville and the surrounding cities such as Murfreesboro, Franklin, Hendersonville, Brentwood, Spring Hill, Columbia and Gallatin are actually in the USDA Rural Development area, there are many areas that are just outside of and still near the metropolitan area that are eligible for Rural Development Financing.
The Rural Development program will allow you to purchase your new home with having to come up with a large down payment, in fact the hallmark of this program is that NO down payment is needed.
Nashville area homebuyers can take advantage of this opportunity even if their credit history is spotty. Whether you have some previous late payments or even more severe credit problems such as bankruptcy or foreclosures, you can still purchase much sooner the RD program than you can with conventional loan programs.
Another area where the Rural Development home loan is unique is that it allows the homebuyer to include the closing costs into the loan amount. The caveat to this benefit, is that the home must appraise for enough to cover the closing costs.
For example, if you are buying a $150,000 home and the home appraises for $153,000 you can include up to $3000 in the loan amount and have a base loan amount of $153,000 and thus reduce the amount of money you have to bring to closing.
The limitations of the Rural Development loan are unique as well. There are two unique guidelines that are not present with other loan programs. The RD loan is not for those that make too much money and those that are buying in highly populated areas.
Like other loan programs Rural Development loans consider how much money you make to calculate how much home you can afford to buy. However, unlike other loan programs this one limits the amount of money you can make. Those that make too much money are not eligible for a Rural Development loan. The limit is based on family size, and does consider the income of everyone in the home, even if they are not on the loan. For families with 1-4 people the limit in the Nashville area are $77,000 and $101,900 families with 5-9 members.
Besides the income limits, the RD program has geographic restrictions. It is designed to be used to help purchase homes that are outside of heavily populated areas. The USDA has decided what areas around Nashville that are eligible. You can review the map below, the areas shaded in yellow are the ineligible areas or CLICK HERE to check a specific for eligibility.
Give us a call today with any questions you may have about the RD program. We can answer any questions you may have and help you get Pre Approved for the purchase of your new home.