Many of you have heard about USDA Rural Development Guaranteed Home Loans, and how borrowers are able to qualify for 102% financing without putting any money down. What many borrowers, mortgage and real estate agent may not know, or fully understand is how easy it is to qualify and fund a USDA guaranteed loan. In some instances USDA guaranteed loan can be qualified and closed in as little as two and a half weeks!
Unfortunately, the word “Rural” usually brings to mind a farm or barn, or some out-of-the-way backwoods place. This is not at all the case with USDA Guaranteed Rural Development Home Loans. While properties that are in the countryside may qualify for USDA financing, the real advantage of this loan program is that it can be used to finance virtually any single family residence in a qualifying area…and just about every county in
Here are some highlights of the program
Below are some answers to frequently asked questions that I receive. While I focus my lending to
What is a USDA Guaranteed Home Loan?
- A USDA Guarantee Home Loan is a government insured loan, which is issued and serviced by a lender. The loan is for rural areas, which is typically communities where the population is 25,000 people or less. You would be surprised at how many communities qualify. Rural does not mean out in the middle of nowhere. To see if a property you are interested in or listing qualifies, click here.
Are USDA Guaranteed loans only for low-income borrowers?
- No, USDA Guaranteed loans are for Moderate Income borrowers. In most counties in California, as an example, a 1-4 person family can earn up to $70,750.00 per year, in some counties it is even higher, so the answer is that USDA Guaranteed loans are not only for those with lower incomes, but it is intended to be used by moderate income borrowers. For the exact income limit in your area, click here or email me, and I will let you know what that limit is.
Are there restrictions as to where I can purchase a home using a USDA Guaranteed loan?
- Yes, but there are a ton of available cities and communities that qualify for USDA Guaranteed financing. Typically the population needs to be 25,000 people or fewer to qualify, but that is not always the case. Cities such as
Do I have to be a first time homebuyer to qualify for a USDA Guaranteed loan?
- No, you do not have to be a first time homebuyer to qualify for a USDA Guaranteed loan.
What is the down payment for with a USDA Guaranteed loan?
- There is no down payment. USDA Guaranteed loans offer 102% financing. 100% of the purchase price can be financed, as well as, the 2% Guarantee Fee (Mortgage Insurance) that USDA charges all borrowers. I should mention that USDA allows for 102% financing of the appraised value…which is a great tool when trying to finance closing costs. Ask me how!
Can the property have an in-ground pool?
- Yes, but the value of the pool cannot be financed. To make things simple, let’s say that the purchase contract for the home is $100K, the appraisal comes in at $105K and the pool is valued at $5K. In this example, you can still finance 100% of the purchase price without the pool becoming a factor in financing. Or, sometimes, particularly with bank owned properties, the pool is given no value, so it does not factor into the equation.
I have heard that USDA Guaranteed loans are difficult to qualify for and close, is this true?
- Not in the least. USDA Guaranteed loans are one of the easiest loans to qualify for and they are relatively easy to close. A majority of my business focuses on USDA Guaranteed financing, and I have become an expert at qualifying and closing these loans. It is a great loan, and is a lot less cumbersome than VA or FHA loans. If someone has the option to qualify for USDA Guaranteed financing, they should definitely look at that option first.
If you are looking to finance the purchase of a home, USDA Guaranteed Loans are a
fantastic option. Feel free to visit my website for more information – www.ivhomeloans.com
Regards,
George
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