USDA Mortgage for First Time Homebuyers No Money Down See If you Prequalify!
USDA stands for United States Department of Agriculture. This is a great mortgage program for first time homebuyers. It is very important to stress that you will need to find out now if the house you are interested in is within the usda program parameters. This usda program is limited to rural areas with some exceptions in certain states. There is also a maximum income requirement which varies per county and state. There are many advantages to getting a USDA Home Loan or USDA mortgage such as 100% financing. This means no down payment requirement. USDA also accepts grant assistance or seller assistance for closing costs. This means a seller is able to pay for your closing fees if they are willing to and some Counties offer grants to First Time Home Buyers (FTHB) to help with the closing fees. Many homebuyers that use USDA to obtain their mortgage settle on purchases with little to no money down. There is a 3.5% guaranty fee that is added to the loan amount. For example, if the purchase price of the home you are interested in is $100,000 the usda will add 3.5% to that amount making your mortgage loan amount $103,500. One big advantage with the usda that other loan options do not offer is that there are no reserve requirements. USDA is also less stringent with the credit history of the borrower and will also use knowledge and judgement to approve a file as oppose to the normal protocol of an underwriting file and using a desktop mortgage underwrtiting software system to approve and deny files. Also less scrutiny is used when reviewing a borrower’s employment history and ability to save history. Although, when issues regarding credit and employment history occur, much documentation is required to offset the past issue and prove a capability to repay the loan. Compensating factors (other means to pay back the loan) are usually required to lean judgement toward an approval. Although this may be frustrating at times, it is one of the best and easiest ways to get a mortgage if you have a limited income and are looking at usda eligible properties. Every lender does not offer USDA loans so you may want to do your research (see below for a link to the USDA website). There you will find many resources and requirements that may fit your current conditions. There are 2 types of USDA Home loans you can apply for each having different income limitations. One is guaranteed and the other is direct. A guaranteed loan is when the lender of the bank takes your application and processes the loan until it gets to closing. This type is for higher income limitations which makes it acceptable to the bank. The direct loan is processed directly at the office of the USDA. USDA takes the application and processes the loan straight to the end. This type is for lower income limitations. You can find out more at their website and by calling USDA. There are phone numbers for each state of a borrower's location. The contact page is listed on the website
Click here to check usda property and income eligibility:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp
