Info on a USDA loan…?
by Mortgage Rates on Thursday, December 2nd, 2010 | 2 Comments
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for tons of info http://www.jeremydrobeck.com/rd
USDA Rural Development loans are by far the best loan program out their. What you heard about your Aunt is not true. Why doesn’t everyone get an RD loan? Because not everyone qualifies, but those that do, assuming the lender offers the program absolutely take out these kind of loans.
zero down
no PMI
Great Rates
Their are income limits
There are area restrictions. http://www.jeremydrobeck.com/rdproperty
There are 2 types of USDA loans, the Direct and the Guaranteed. Your aunt likely had the Direct loan. USDA Direct loans (or section 502) are for very low income buyers and are subsidized; meaning that the USDA actually covers a portion of the mortgage payment each month and you pay it back when you sell or refi. Which is why your aunt would have owed some of her equity back. The Direct loan can only be received from a USDA office.
The Guaranteed loan is different. Banks, brokers and credit unions can offer this product. It’s lent on their money and just “guaranteed” by the USDA. The USDA does have final underwriting approval on these loans. They are for low-moderate income families and are only available in rural – semi-rural areas (generally under 20k people). There are income and geographic restrictions. Here is a link to tell you if you are eligible:
http://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=state&NavKey=income@11
This is a fantastic loan product if you qualify. The benefits include:
*100% financing
*Will finance up to Appraised value – so if it appraises higher than sales price you can finance repairs, appliances, closing costs, or more
*No monthly mortgage insurance
*No subsidy to pay back
*Low fixed rates on 30 year terms (comparable to FHA rates)
*Easier credit qualifications – no seasoning on bankruptcies and no minimum credit score requirement
Good luck!