How To Buy A Home With 100% Financing
Removing the #1 obstacle to home ownership… the down payment.
“Originally designed to help rural Americans realize the dream of homeownership, these mortgages can also be used to finance a wide array of properties from single-family homes to multifamily properties and even businesses…
A USDA loan can be used to purchase, refinance, renovate, repair or even relocate a home. What many don’t realize is that these guaranteed loans offer 100 percent financing to income-qualified individuals, making them as close as you can get to a subprime loan, only with a safe, low fixed interest rate and payments! Be aware, however, that the USDA only guarantees 90 percent of the loan.” -Realestate.com
Why USDA Home Loans Should Be Your First Choice
#1.) 100% Financing makes this loan one of the most popular available.
#2.) It is possible that closing costs can be “rolled into” the loan amount, or even allow grants or gift funds. Something most other programs will not allow borrowers to do.
#3.) The lender may consider “non-traditional” credit and you do not have to have amazing credit to get approved. (At least 620-640)
#4.) Low credit because of “lack” of credit history may be overlooked with “non-traditional” credit history.
#5.) Not limited to first time home buyers.
USDA Loan Requirements & Specifics
USDA loans are offered by the — wait for it — USDA to encourage and boost home ownership in rural areas. Defined loosely, the USDA defines rural as areas/towns that have a population of 20,000 or less.
Home must be in an approved rural area
These are strictly 30-year fixed-rate loans
Income eligibility is capped at 115 percent of your median area income. To check your eligibility, use the income eligibility calculator at the USDA website.
You must be able to qualify with maximum debt-to-income ratios of 29/41. To determine if you qualify, add the loan principle, taxes, insurance and interest and divide the sum by your gross monthly income. If this calculates to 29 percent or lower, you qualify. Additionally, your total debt, divided by your gross monthly income must be equal to or less than 41 percent.
You must be at least two years out of a bankruptcy discharge and be “credit worthy.”
You cannot own another home within commuting distance of the home you wish to purchase.
Eligible repairs and improvements may be included in the loan.
Not limited to first time homebuyers.
USDA may also be a great option for military veterans who have burnt their VA loan eligibility options, and it will be a lot safer taking out an institutional loan than gambling on sometimes shady seller financing.
For a list of approved USDA lenders in the Florida Panhandle area (Destin, Fort Walton, South Walton, Crestivew, Niceville, PCB, etc.) please contact me directly,
via email or phone (850-687-5300)
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