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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Count me as one of the skeptical ones:
“USDA officials have argued that their program is much less prone to speculative buying” doesn’t jibe well with “Credit Score of 580 is needed” for me. Thanks for finding this program, this is the first time I’ve seen it. Great post!
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I am interested in a no money down loan
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On a slightly different note, secured borrowing on property can lead, it seems, lead to finding you have been mis sold mortgages.
I read earlier this year that a lady who borrowed less than 10k with her home as security lost her job, was told that the payment protection insurance could not payout because of implications to do with her partner (the main bread winner).
The solicitor she contacted found traces of severe professional negligence and ended up making a claim against bother the mortgage broker and lender for wrongfully giving her a self cert mortgage.
This is just one example of why credit is so hard to come by these days… Money hungry people!
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Mis sold Mortgage Reply:
July 12th, 2010 at 4:37 pm
@Mis sold Mortgages, you have made a valid point here and reminds me very much of the Mis sold Right to Buy Mortgage scandal that has left the less well-off people in the country feeling ripped off by their mortgage broker and solicitor who saw an opportunity to take up to £15k out of the Government discount applied to ex-council tenants.
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Please include a link to the plan when you post something like this
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Can you elaborate a little on where you found this info? We currently live in Florida, moved here from Ohio in 03 and are contemplating moving back to Ohio again. We’d like to start a small farm in the rural area I’m originally from, but have just been boggled as to how to go about it….I have searched the Farm Credit Bureau websites as well as the USDA in Ohio. The only loan info I came across on the website(USDA) said the program ended in 2005. Any new info would be much appreciated.
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Hello,
Please help us 0%down goverment home loan we don’t have great credit we need all the help we can get.
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