USDA Home Loans

Rural Development Conditional Approvals

admin — Tue, 29 Jun 2010 03:22:43 +0000

There has been good news released about the USDA Guaranteed Loan Program funding situation. Conditional loan commitments are once again being issued for 100% USDA Home Loans subject to “the availability of funds and statutory authority to obligate such funds to support the proposed guarantee, the statutory authority to charge a sufficient guarantee fee (if any is needed, to support the proposed guarantee with available funding), and should the lender pass on to the borrower a loan origination fee that is higher than the guarantee fee that RHS is ultimately authorized to charge on the proposed guaranteed loan, the lender agrees to promptly return the difference to the borrower.”

In simpler terms, this means that lenders have started accepting USDA loan applications again for Section 502 Loans with the new 3.5% guarantee fee. Areas Like Little Rock Real Estate may not qualify but outlining areas will.

USDA Income Requirements

admin — Fri, 12 Feb 2010 12:23:53 +0000

USDA Home Loans are primarily for low income households or for households in rural areas. Most loans are for the purchase of a home home, however there are instances where funds can be used to build, renovate, and repair. Rural Development Loans can also be used to refinance a home as long as the home is currently secured with a Rural Development Loan.

Applicants for a loan may have up 115% of the median income for an area. The easiest way to determine qualifying income for a area is to the USDA website. Families must be able to afford the mortgage payments, along with taxes and insurance. In addition they must have reasonable credit histories.

Loans are for 30 years. There is no prepayment penalty. The lender sets the interest rate. The is no required down payment. The lender must also determine repayment feasibility using ratios of repayment income to PITI and other monthly debt. When searching for Little Rock Real Estate you can look in the outskirts for USDA homes.

Benefits of a Rural Development Loan

admin — Wed, 03 Feb 2010 03:10:41 +0000

The most obvious of all benefits is that no down payment is required. Borrowers who qualify for a USDA Rural Development home loan have the flexibility to pay nothing out of pocket for a down payment. That means a borrower can finance up to 100% of the appraised home value. Or, a borrower can have a gift or grant go toward a down payment with no money out of pocket.

The is no monthly mortgage insurance. Unlike other loan types, a Rural Development home loan does not require the borrower to pay monthly mortgage insurance.

Low 30 year fixed interest rates. Since these loans are backed by the government the lender can offer rates as low as any other loan type.

Credit standards are much more relaxed compared to other loan types. The individual lender may implement their own minimum standards but in general the USDA Home Loans are typically much more forgiving than other loan types when it comes to credit.

There is no maximum purchase amount. Again the lender may implement certain requirement’s that could limit the amount at some point but USDA does not have anything in place.

Fixer Uppers are OK. Believe it or not a borrower can finance in repairs on a Rural Development Mortgage. Its always best to consult with a realtor when searching for such a property though. You can even use a realtor who handels Little Rock Real Estate to help oyu with RD Loans.

Whats is a USDA Home Loan?

admin — Mon, 04 Jan 2010 22:53:04 +0000

A USDA (United States Department of Agriculture) Home Loan more commonly know as a Rural Development Mortgage or RD loan is a loan/mortgage that is guaranteed by USDA. It is one of the true 100% products still available for people. Of course like anything there are restrictions. The biggest two are location, the property has to fall in an area designated by USDA as a qualifying area, and income. For example Little Rock Real Estate does not qualify. Unlike most lending products Rural Development loans have maximum income restrictions. To the right of the screen you will see a video that shows you have to determine both of these things.