100% Financing with USDA Loan, FHA Loan, And VA Loan

Mortgage and Lending with Atlantic Home Loans 12937

In Rhode Island, there are essentially three mortgage programs where you can purchase a home with 100% financing through either RI Housing,  Veteran's Administration (VA), and the US Department of Agriculture (USDA).   The following is a brief description of each program and general restrictions.

Rhode Island Housing - RI Housing is a non-profit organization offering mortgages for first-time homebuyers directly and through participating lenders (defined as not owning a home for the previous three years).  Loans are structured with a first and second mortgage for up to 100% of the purchase price and requires an upfront funding fee, which is financed into the loan, and monthly mortgage insurance.  RI Housing may offer additional assistance for closing costs and repairs, which is based upon income limits and property location.  RI Housing also offers renovation financing for properties in need of repair.  RI Housing will finance 1-4 unit properties and condominiums and you must occupy the home as your primary residence.

Veteran's Administration - You must be a qualified veteran, or active duty military and obtain a certificate of eligibility . VA will finance 100% of your purchase price and doesn't require you to pay monthly private mortgage insurance (PMI), however, VA does charge a funding fee which can be 1.25% - 3.3% of your loan amount.  This funding fee is typically financed into the loan, and may be waived for qualified disabled veterans.   You must occupy the home as your primary residence, and you may purchase 1-4 unit properties.  Maximum loan amounts are based upon property location; you may be required to make a down payment for higher property values (generally over $424,000).

USDA - The department of agriculture offers 100% financing in limited geographic areas and on single family properties and condominiums only.  USDA loans have an upfront guarantee fee equal to 1% of the loan amount and also requires mortgage insurance equal to .35% of th loan amount, paid monthly.  USDA is typically more restrictive due to  income limits and property eligibility based upon property location and condition.  

The following are just a few examples of restrictions

  • Generally be 2,000 square feet or less
  • Not have market value in excess of the applicable area loan limit
  • Not have in-ground swimming pools
  • Not be designed for income producing activities (no multi-family properties)

All three of these programs require the typical lender and legal closing fees, these fees will vary based upon the loan amount and property location.  A buyer may negotiate to have the seller pay these fees, and if successful, you can purchase a home with no out of pocket expense!  It's important to work with an experienced mortgage loan officer and Realtor who will ensure you are shopping in your budgeted price range.  Visit me at www.atlantichomeloans.com/gdevine  or email me at gdevine@goahl.com 


Comments (3)

Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

These are all good programs George DeVine . A good agent will seek out these programs for those clients whom many agents will just pass over because they do not have the funds for a down payment.

Feb 26, 2017 08:12 AM
Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

Good points George DeVine . We also economic stimulus for a short time longer here in the Phoenix Arizona metro area with free grants that can be used for down payment and/or buyer closing costs. These grant programs plus the VA and USDA loans are all great opportunities for buyers in our Sunny Scottsdale market as well as yours. Thanks for sharing 

Feb 26, 2017 08:16 AM
Diana White-Pettis
Bennett Realty Solutions - Upper Marlboro, MD
GRI, CDPE, CNE, WHC Upper Marlboro Homes for Sale


These are great programs for buyers who have no down payment funds. I have been blogging about grant and loan programs we have here in Maryland to assist with down payment and/or closing costs (similar to the ones Jeffrey talked about in Phoenix).  All are good ways to help first time homebuyers get into the homes of their dreams.  Thanks for sharing what Rhode Island is doing as well.


Feb 26, 2017 03:33 PM

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