Do you know someone who has a job and works hard, but their income isn't high enough to afford a well maintained home in an area desireable to them? If so, the USDA Rural Devolopment DIRECT Loan Program may be the perfect loan program for them. This is a 100% financing (NO DOWNPAYMENT), no Mortgage Insurance, government subsized loan program! I've seen this program dramatically change the lives of families for the better by helping them purchase a nicer home, than would have been possible using traditional financing programs, with an affordable payment.
Unlike the Rural Development Guaranteed Program, buyers apply directly to their local USDA Rural Development Office for the Direct Loan Program and the funding comes directly from that agency as well.
This program is for low and very low income buyers, usually below 80% of the median income in the county where the home they purchase is located. CLICK HERE to view single family housing Direct Loan Income Limits.
Under the Direct Loan program, individuals or families receive direct financial assistance directly from the Housing and Community Facilities Programs in the form of a home loan at an affordable interest rate. The payment is subsidized based on the buyer's adjusted gross income and number of household members. Payments can be reduced to a level that would be equal to a Principal and Interest payment at 1% interest rate, plus property taxes and home owners insurance. These loans have no Mortgage Insurance. Up to the full subsidy amount can be recovered at closing by the USDA Rural Development program though.
Once a buyer submits their application to their local USDA Rural Development office, it will take approximately 30 days to find out if they have been approved. Unfortunately, funding isn't always available for these loans, so sometimes buyers have to wait until funding is available. Once funding becomes available you have to move quickly to find a home that is located in an eligible area for this program. In my experience, closing usually takes 45 days once funding is available and a contract is submitted.
I've helped several families purchase a home through this program...if you have any questions or would like my help just let me know.