Monday, April 29, 2019 / by Mallory Herzog
It can be tough to save up a large down payment, especially for first time home buyers and retirees on fixed incomes. What can a buyer do who can qualify for a mortgage, but doesn't have the funds for closing? Talk to your lender about a USDA loan. These loans are issued through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture. This loan offers 100% financing to the buyer with ZERO money down. Allowing the seller to contribute up to 6% of the purchase price towards closing costs and pre paid items.
Are you thinking what we are? That means you can buy a house for LESS than it costs to move into a new rental. There is a catch, the USDA Loans are only approved in certain geographical locations. Usually more rural areas qualify, to check out your area click here for the interactive map. Type in an address to search your local area. If your address is in an approved location you will see an image like the one below.
There are a few qualifications for this specific loan type. Applicants must meet the income restrictions for the County the buyer is interested in. Each county has a maximum Income requirement which varies state to state. The home must also be owner occupied, as investment properties do not qualify for this type of loan. Applicants with credit scores of 640 or higher receive streamlined processing. Below that, you must meet more stringent underwriting standards. You can also qualify with a nontraditional credit history.
In South West Florida this area encompasses Venice, Englewood, Deep Creek and parts of Punta Gorda! These are a few of the most sought after communities in the area. Since 2016, as a part of its Rural Development program, the USDA helped some 127,000 families buy and upgrade their homes. The program is designed to “improve the economy and quality of life in rural America.”
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Call us today for more information 941-621-8600