Good Credit but No Down Payment? There’s a Loan for That!

If you want to know how much your house will sell for in South Florida, Broward County go to Home Value or call Irene Medina.Realtor at 954-439-4851. 

So, Warren Buffet spends more on dinner than you will be making in a month, and you have never required the assistance of a financial investment banker, but you’ve got good credit and you long to possess your own property. How about if we told you that there is a mortgage loan program out there for individuals exactly like you and (this is the best part) it will require absolutely no advance payment?

Regardless what you might have recently been hearing on television about lenders tightening their belts and mortgage requirements becoming more stringent, the USDA has a zero-down loan for folks who do not make gobs of funds.

Origin of the USDA Mortgage

In 1944, the Department of Agriculture got reorganized and the USDA Rural Development program was developed. It go about providing, on top of other things, rural housing loans which fell outside the legislation of the farm programs managed by the Farmers Home Administration (FmHA).

Now, the Rural Development company produces direct loans, loan guarantees (exactly like the FHA-guaranteed loan) and grants to low-to-moderate earning households. The loans are used to rehabilitation, build and purchase properties in remote locations.

Homes Qualified To Apply For the USDA Home Loan

The operative phrase for this mortgage is “rural development,” meaning that the property has to be situated within a rural area.

Here are a few further requirements:

The house should be modest towards the location in size, design and price.

The property should not have a swimming area.

The cost of the home should be at or below the mortgage restrictions for the area.

The property should suit specific criteria established according to the USDA’s Housing and Community Facilities Program.

USDA Property Loan Summary

Extracting the USDA’s remote improvement system is a little confusing given that sector uses a numbering system to identify different loans offered.

If you’re searching to buy a property, the USDA program offers two suggestions: a loan guarantee or a direct loan. This is the confusing part: They both fall under the label of the “Section 502 Loan Program.” your earnings will decide which loan is best for you.

Both of the programs are designed for low-income individuals, with the exception of the guaranteed loan offers more flexible income restrictions. Both loans are designed for homes located in rural areas (those having a population of no more than 20,000). In the event that you possess a property within 50 miles around the one you would like to purchase, you are ineligible for the services.

The Guaranteed Finance Loan

The loan guarantee program, formally known as the Section 502 Guaranteed Loan, is much like the FHA or VA loan in which the borrower obtains a home loan coming from a loan provider and then the federal government ensures its repayment.

USDA eligibility requirements for the guaranteed loan include:

Income up to 115 percent of the area’s median income.

Proof that the applicant have enough money to make the monthly payments.

Acceptable credit history.

Remember, this is what the USDA would like to see; the lending company may have tighter requirements. You will need to also agree to work with a loan provider that’s authorized for single-family housing guaranteed loans.

The Direct Mortgage Loan

The USDA program also provides a direct loan, known as a 502 loan. Rather than the consumer obtaining a loan coming from a loan provider, the U.S. government makes the loan directly.

Eligibility requirements for the Direct Loan:

This loan is restricted to those with low to very low earnings. People that have very low earnings must make no more than 50 percent of the location average revenue. To be considered as an applicant with low income, you must make between 50 and 80 percent of the local median income.

Like the guaranteed loan, you must be able to confirm that you could afford the per month home loan repayments, consisting of taxes and insurance.

All candidates must first apply and become turned down to get a conventional loan.

Borrowers must have a “reasonable” credit rating.

Only U.S. residents and lawfully admitted immigrants are qualified.

The beauty of the direct loan, aside from the idea that you don’t need an advance payment, is the fact that the USDA handles the closing, so prices are held to a minimum.

Loan terms are for 33 years (very low-income borrowers may be able to stretch the term to 38 years) and the monthly interest is determined by the lender.

For Your FREE Home Value go to: Home Value

If you need to Short Sale your home, please go to www.FlShortSaleServices.com  for information on short sales and to calculate if you have Equity  in your home now or still need to short sale. We have a proven track record of approved short sales and deficiency waivers.

If you are a buyer looking to buy a home, we pride ourselves in making sure we listen to what your dream home consists of. It is all about you and your future home. We put you first! To search the MLS go to www.TheMedinaRealEstateGroup.com

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Irene Medina / Realtor This email address is being protected from spambots. You need JavaScript enabled to view it. / 954-439-4851 The Medina Real Estate Group www.TheMedinaRealEstateGroup.com

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