941.758.0600 office 248.770.7066 mobile/text
The USDA Guaranteed Rural Home Loan provides low and moderate income rural residents with better access to affordable housing finance options with little or no down payment or out-of-pocket costs. The borrower’s adjusted gross income may not exceed 115% of the HUD median income limit and the property must be$80,000 a year. However, there are many areas that you may not consider rural, but are eligible for these loans. You can check for a particular area at: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
There are parameters to be eligible for these loans:
• Borrower must be unable to obtain the necessary conventional credit without the RD Guarantee Conventional credit is referred to loans not guaranteed or insured by the Federal Housing Administration (FHA), the Veterans Administration (VA), or the Rural Housing Service (RHS).
A Conventional loan is defined by the USDA as one where:
4. the conventional mortgage loan term was for a 30-year fixed rate loan term without a condition to obtain private mortgage insurance (PMI).
Note: Liquid assets for conventional credit down payment purposes typically consisted of cash or cash equivalents. Cash or cash equivalents included funds in the borrower’s checking or savings accounts, or investments in stocks, bonds, mutual funds, certificates of deposit, and money market funds, unless they were encumbered (pledged as collateral) or otherwise inaccessible without substantial penalty. Cash equivalents typically did not include
funds in Individual Retirement Accounts, 401(k) accounts, Keogh accounts, or other retirement accounts that were restricted and may not be accessed without incurring substantial monetary penalties.
• Land Trust, except Illinois
• More than four (4) borrowers per transaction
• Non-occupant co-borrowers
• Any individual listed on HUD’s Limited Denial of Participation (LDP) list athttps://www5.hud.gov/ecpcis/main/ECPCIS_List.jsp or the General Services Administration’s(GSA) Excluded Party List https://www.epls.gov/
There is a transaction fee, like a FHA Mortgage Insurance Premium, that is charged at closing of 2% of the mortgage amount. The yearly fee, however, is very low. Itis only .3% of the mortgage amount annually. That is only $25 a month per$100,000 of mortgage amount.The mortgage amount is allowed up to 100% of the current appraised value, so if the property appraises higher than the purchase price all of the closing costs and funds for escrow accounts can be financed. The mortgage amount cannot exceed the appraised value except to include the 2% transaction fee. We often can include the closing costs and escrow funds into the interest rate so that you can purchase a home with almost no out of pocket expenses. The maximum loan amount is $417,000 so it allows for many types of homes.