What is a USDA Loan ? 100 % Financing Usda Loans better known as Section 502 Loans. These loans are primarily used to assist low income families purchase homes in rural areas. Some Families may even qualify for payment subsidy to help them get use to making payments. However not all lenders are willing to do these loans. The mission of USDA Rural Development’s Single Family Housing Guaranteed Loan Program is to assist low to moderate income rural homebuyers achieve their dream of homeownership!
Applicants must purchase a home within the eligible rural areas, and have a household income that does not exceed the established limits where the home is located. Additional Guaranteed Loan Features include but are not limited to:
100% financing, no down payment is required. The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included.
Guarantee Fee applies: may be rolled into the loan amount.
Flexible credit guidelines. Non-traditional credit histories may be accepted.
Fixed 30 year interest rates apply. Lenders and applicants agree upon interest rate.
Qualifying ratios are 29% for housing costs and 41% for total debt. Lenders may request an exception to exceed these ratios when strong compensating factors are identified.
No maximum purchase price. Qualifying ratios and the applicant’s stable and dependable income will determine home affordability.
Eligible property types include existing homes, new construction, modular homes, Planned Unit Developments (PUD’s), eligible condominiums and new manufactured homes.
Eligible closing costs and lender fees may be included in the loan or paid by the applicant.
Gift/Grant Funds/Mortgage Credit Certificates (MCC’s)/Seller Concessions are allowed.
Eligible repairs and improvements may be included in the loan.
Not limited to first time homebuyers