Florida Teacher Housing Loan

Mortgage and Lending with USDA / FHA Mortgage Source

Florida teachers can still purchase home with $0 down payment thanks to the 100% USDA RD home loan.  The USDA loan has many advantages for all FL public service workers like teachers, police and firefighters. The best part is there is no first time buyers class, long wait or special approval needed.  You can be pre approved and looking at homes all in the same day!   Most of Central Florida is eligible for the USDA 502 Guarantee program – all of Lake and Sumter County, along with most of Volusia and Seminole County.  Here are some of the bullet points of the USDA Rural Development program in Florida - 

  • 100% financing, no down payment
  • No special classes or schooling needed.
  • Your repayment ability is based on the following ratios: Principle, Interest, Taxes, and Insurance(PITI) divided by gross monthly income must be equal to or less than 29 percent
  • Total debt divided by gross monthly income must be equal to, or less than, 41 percent
  • 502 USDA Guaranteed loans can be made on either new or existing homes
  • Existing single family homes must be structurally sound, functionally adequate, (move in condition)
  • There are no loan amount limits – you qualifying amount is based on your debt to income
  • Loans may be for up to 100 percent (102 percent if the guarantee fee is included in the loan) of appraised value or for the acquisition cost, whichever is less
  • Mortgages are Government backed by USDA, low 30-year fixed rates.
  • Mortgage may include funds for closing costs, the guarantee fee, escrow account and other prepaid items, if the appraised value is higher than sales price.
  • Sellers may contribute to the buyer’s closing costs – up to 6%
  • Home buyers make application with participating lenders
  • Buyers must personally occupy the dwelling as a primary home.

Additional details to the USDA loan:

Very Low Monthly Mortgage Insurance  - PMI:

The USDA loan has relatively low mortgage insurance requirements, particularly when compared with the FHA loans.  USDA charges 2% of the loan amount as an upfront premium at closing (that may be financed) and a .40% annual fee (monthly fee) on the remaining balance.   This results in much lower mortgage insurance compared to other loan programs like conventional and especially FHA loans that charge 1.35% monthly.  Even if you are a teacher, firefighter or law enforcement buyer that has the 3.5% down payment required for a FHA loan, you should still look close at the USDA loan due to the reduced mortgage insurance costs. In the end your monthly payment will be about $100 less on average

No Loan Limits with USDA Rural Housing:

The USDA loan does not have loan limits as is the case with other loan programs.  The loan amount is limited only by the applicant’s income and other qualifications like debt to income ratios.  Families in  moderate income bracket with strong qualifications often can obtain a USDA loan for a higher amount than they would with other government and conforming conventional loans.

No Large Cash Reserve Needed with USDA Rural Development:

Let’s face it, most public service workers like teachers, police officers and firefighter don’t exactly have a ton of cash saved up for a housing down payment. The good news with the 100% USDA loan is there is no requirement for cash savings  This means more opportunity to purchase a home for families who have limited cash.  Of course the more cash reserves or liquid financial assets a family has, the stronger the USDA application, but a lack of assets alone will not make your ineligible.

Seller Contribution For USDA Closing Costs Is Permitted:

In addition to being 100% financing, USDA will permit the home seller to pay all the buyers closing costs and pre paid reserves for taxes, insurance.  Or the buyer can choose to roll in all closing costs with a higher supported appraisal.  The end result is very little out of pocket expense from the home buyer. In most cases the buyer only pays for the appraisal.

No Title Waiting Requirement:

Certain mortgage loans like FHA have a “flip” rule that prevents a family from buying a home from a seller or investor who has held title for less than 90 days. This is called title seasoning and USDA Rural Housing loan does not have a seasoning requirement. This gives families the full range homes on the market including “flip” type homes that have been renovated by investors.  Any single family residence is eligible as long as the home is located in a USDA eligible map location.  USDA RD mortgage can be used in a large selection of suburbs, towns, and rural areas, and all property types are allowed:  Single-family homes, townhomes, condos.  Existing mobile homes are not allowed. The Florida USDA eligibility map can be found here.

If you have questions about the different mortgage options available Lake, Sumter, Volusia and Seminole county – please contact us at 904-302-6060 or visitwww.UsdaMortgageSource.com 



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