USDA Rural Development Loans The “Leave Me Alone” Loan Program
Another department within the government has also been given the authority to provide financing at 100% of the purchase price – and it is one of the least utilized funding programs in the country!
Although I have been using this program for years, when they hear about it, most borrowers are under the false assumption that they don’t qualify. WRONG! In fact, it’s open to anyone (except for those “$2 million” buyers again!) and similar to the program above, it allows for the Seller or the lender to kick in for all the costs – and finance the property all the way up to 100% of the purchase price.
Okay, what’s the catch?
Well, I call it the “leave me alone” loan, because the property cannot be located in an area where the immediate population exceeds 50,000 people. So as long as you don’t want to be in downtown Detroit or Los Angeles, you’re fine. Actually, interesting thing is this – the government hasn’t updated their maps very recently, so many more areas actually qualify for the program than you might think!
INCOME ELIGIBLITY USDA is intended for moderate income households. The more people in your household, the more income you're allowed to make. Please call our office at 901.672.2413 to find out the income limits for your area.
You don't have to be a first-time homebuyer.
NO down payment is required. You don't even need down payment assistance for USDA, since no down payment is required. This is a true 100% loan.
NO PMI or monthly mortgage insurance. USDA does require a 2% guarantee fee, but most borrowers choose to roll this into their loan. The seller is also allowed to pay it.
Low, fixed rates. Rates are similar, often lower than, rates for FHA.
You don't have to wait until you decide on a property address. Your loan approval is good for 120 days, while you house-hunt.
No extra money in the bank required. You are not required to show you have extra savings in the bank.
Self-employed borrowers are eligible. Just provide two years of your 1040 and your profit & loss statements.
Lenient guidelines for negative credit. Bankruptcy (chapters 7 and 13) and foreclosures are allowed if completed more than 3 years ago. Paid judgments and unpaid collections are allowed if more than 12 months old.
