USDA Rural Housing Loans Are Still Available
With the changes in the mortgage industry over the last several years, basically all but one 100% financing loan program have been eliminated. The current rate on the USDA loan is around 5.25% with NO monthly mortgage insurance.
This gives a lower payment than the FHA loan with 3.5% down at the same loan amount and interest rate.
Listed below are some of the basic highlights and guidelines of the program:
- 30 Year Fixed Rate (Comparable to Conventional 30 year)
- No Monthly Mortgage Insurance
- Not subject to Declining Market guidelines
- No Minimum Cash Contribution from Borrower
- Gift Funds Allowed (if needed)
- One Time Guarantee Fee of 2% (May be Financed)
- Maximum Loan to Value – 102% of Appraised Value
- 2% Guarantee Fee financed
- Closing Costs can be Financed up to 100% of appraised value!!!
- Seller Concessions up to 6%
- No Reserve Requirement
- Minimum Credit Score typically 620
- Debt to Income Ratio’s of 31/43(housing/total debt)
- Exceptions encouraged with compensating factors
- Eligible Geographic Locations
- City of Buckeye
- Pinal County (except for Apache Junction)
- Maximum Income Restrictions (Per Household)
- 1-4 Person – $75,750
- 5-8 Person – $100,000
- Primary Residence Only (Cannot own any other properties in the State of AZ)
- Escrow Holdbacks – Not Allowed
USDA has published some anticipated guideline changes in the future, so now would be the time to take advantage of the program before the new guidelines take effect.
I will continue to follow up and make updates as new changes to the program are released!