USDA Loans – No Down Payment
So you want to buy a home but you don’t have the down payment. What can you do? Well, conventional mortgage lenders are requiring a minimum of 20% down and a stellar credit rating. That’s not going to work. Getting that 20% through saving or any other way it just not going to happen.
The best way today to get a mortgage is through a government funded program. These programs include FHA which require a 3.5% down payment, and VA loans that require current or past military service to qualify. These are good programs and can be the answer for some, but others will still be left out.
What About USDA Loans?
A USDA Mortgage is primarily used to help low-income individuals or households purchase homes in rural regions. Money can be used to build, fix, refurbish or relocate a property, or to purchase and prepare sites, including providing water and sewage facilities. Applicants for loans may have an income of up to 115% of the median income for the region. Families must be without ample housing, but be able to afford the mortgage payments, together with taxes and insurance. In addition, applicants must have acceptable credit histories. You must intend to live in the home for a USDA mortgage.
USDA Loans Are Not Just Rural
USDA loans are for rural areas, but you will be astonished by what a rural area can mean. Palm Coast Florida is in the fastest growing counties in Florida over the past 10 years. It is between Ormond Beach and St. Augustine. Properties in Palm Coast and the close by communities of Pierson and Bunnell are eligible. These might not look like agricultural areas, but they’re close to major population centers. In many large cities, there are suburban areas that are eligible. Don’t presume your area is not eligible – check it out.
Are You Eligible for a USDA Home Loan?
To be eligible, you’re going to need income that doesn’t exceed 115% of the median income for the area. You’ll need a decent credit score, probably over 600. You’ll need to need to demonstrate that you can make mortgage payments, therefore your debt can’t be too high.
No Down Payment – No Closing Cost
It may seem to good to be true, but you could be moving into a new home with no cash out of your pocket. USDA loans can be for more than the appraised value of the home. That means your closing costs could be included in the mortgage.
What To Do Now?
You need to contact a USDA home loans specialist to learn more. They’re up to date on present requirements and upcoming changes. They can help you decide if you are eligible and loan amount.