In the lending world, there is often a fear of private roads when in fact, not all private roads are treated the same. Each of the traditional loan guidelines have varying guidelines which I’ve outlined below. FHA defines access to … Continue reading →
Help low- and very low-income applicants who do not qualify for the Section 502 Guaranteed Loan Program by advising them about the Section 502 Direct Loan Program.
While your tireless efforts have resulted in numerous homeownership opportunities through the Section 502 Guaranteed Loan Program, there are times when you cannot assist low- and very low-income applicants through the guaranteed program. When these applicants generally demonstrate a willingness and ability to pay their debt obligations but lack sufficient repayment ability for a guaranteed loan, you can still lend a helpful hand by advising them about the Section 502 Direct Loan Program, which is a subsidized mortgage program that can enhance an applicant’s purchasing power.
Direct loans are made directly by USDA, Rural Development and are available to households whose adjusted income does not exceed 80 percent of the area median. Eligible applicants can obtain modest and affordable housing by taking advantage of the direct program:
No down payment requirement.
Fixed promissory note interest rate that considers the Treasury benchmark interest rate. (The rate in effect for March of 2015 is 3.00 percent.)
Payment assistance that reduces the borrower’s mortgage payments to an effective interest rate as low as one percent.
Standard loan term of 33 years.
We ask that you encourage these applicants to contact their local Rural Development office using the link below to learn more about the direct program and obtain an application for assistance.
In the event that you have a USDA loan in your pipeline or are writing up an offer using USDA for your financing type, please take note of the critical dates that may impact on-time closings in the USDA updates … Continue reading →
While most people think of the US Department of Agriculture as a Federal agency that works with farmers or stamps meat, there is a home loan program under the umbrella of the USDA otherwise known as Single Family Housing Guaranteed Loan Program.
The main objective of this mortgage program is to provide affordable zero down financing for moderate income families in “rural” areas or areas of low population density.
Key notes of this program:
There are defined income limits by household size
The purchase price limit is the conforming loan limit in your area
There is no down payment required although you may put money down if you so choose
You can negotiate for the Seller to pay all of your closing costs
There is both an upfront guaranty fee paid to USDA as well as a monthly guarantee fee which is much lower than a mortgage insurance premium would be
The home itself may be single family, an approved condo, townhome or new construction
The home and property may not be “income producing” or be deemed to have that potential which brings about a whole host of other criteria
No barns or significant outbuildings
Not in a flood zone
No manufactured homes
Not on a historic register
1 power meter only
If your household income meets the requirements and the home is located in an eligible area, this is one of the best mortgage programs available today! Great 30-year fixed interest rates and it is not limited to first time homebuyers!
Give me a call today to identify whether you may qualify for this great program!
The single family housing guaranteed loan program referenced as “USDA”, has certain property restrictions that are often a surprise to the average Borrower planning on financing their home with a USDA loan. With a fundamental objective to “finance a residence … Continue reading →