For eligible areas, the USDA loan program allows potential home buyers to purchase homes with no down payment, and in some cases allows them to finance their closing costs into their loan. This government-backed program has allowed thousands of families to realize the dream of home ownership with less up front money than other loan programs.
The USDA program is one of the few 100% financing programs available in today’s tighter lending environment. Some of the highlights of the program include:
- 100% financing – no down payment required.
- No loan limits, sales price limits, or seller contribution limits
- A one time 2% loan guarantee fee which is added to the loan, and a low monthly gurantee fee which is less expensive that mortgage insurance required on other loans.
- Closing costs can be financed if the appraisal is higher than the sales price.
- You don’t have to be a first time home buyer.
- There are no cash reserve requirements.
There are area restrictions, income restrictions and specific guidelines to the USDA loan program. To determine if your area is eligible, click the “eligible areas” tab on this blog. For more specific benefits and restrictions, click on the “FAQ” tab. To determine eligible income, it is best you speak with a USDA lender because there are specific ways the USDA figures your allowable income for the program.
Baxter Scruggs is a mortgage banker offering USDA loans in California, NMLS #156370. He can be reached at firstname.lastname@example.org, or at 760-497-7705, or toll-free at 877-347-0004, ext. 226. Licensed by the California Department of Business Oversight under the California Residential Mortgage Lending Act. The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Terms and conditions apply, all loans subject to underwriter approval. Subject to change without notice. Guild Mortgage Company NMLS #3274