The USDA loan program is offering, and has been for years, home loans at incredible terms even following the housing collapse, under the edict of rural lending (farm loans) given the challenges faced in finding a mortgage loan or deriving high income in sparsely populated areas. The surprise is – many of the zip codes enjoying the benefits of the USDA rural development program are in relatively typical suburbs of major cities.
Incredible Benefits of the USDA Rural Loan Program
- The only actual NO Money Down Loan you can get anymore
- NO PMI
- No Loan Amount Limits
- No Assets needed to qualify
How does the USDA Farm Loan Program Work?
- All mortgages are conventional 30-year fixed rate mortgages
- Both new and existing home purchases are eligible
- Credit Score of 580 is needed (see the ONLY way to get a Free Credit Score)
- The income limits for the Guaranteed Loan Program vary by state
Here’s the amazing bonus opportunity – if you’re eligible for the home buyer tax credit, you can actually MAKE money on your home purchase, right? If you keep your transaction costs down and pick up say, a $6,500 tax credit, this can actually be a money maker right from the start! Think about it – 0% down, a few grand in moving/closing fees matched with several thousand back on a tax credit. It’s a pretty incredible deal.
While the program is supposed to be geared toward low income families, some of the state limits I found during a cursory search showed pretty high limits, especially for a large family.
While some will inevitably question whether this loan program is another bubble waiting to burst due to the preponderance of no down payment loans going into default now, USDA officials have argued that their program is much less prone to speculative buying and their underwriting criteria are much more strict than the Wall-Street model of buying and selling loans from anyone willing to sign on the dotted line regardless of assets, income or liabilities.
Does this sound too good to be true? Normally, when it does, it is. However, in this case, if your family qualifies, it’s the real deal. Thousands of Americans are qualifying and the government’s endorsing it, so if you’re lucky enough to qualify, you might as well take advantage of the USDA Farm Loan Program.
If you don’t qualify, you can always check out a 40 year loan for a lower monthly payment than a 30 year conventional or check the refi/mortgage info page for more on how to find the best mortgage rate, avoiding the lender traps and how to perform your own NPV to confirm you’re going with the best deal.
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