It seems like many are still mourning the demise of the Down Payment Assistance programs. Although there is some voodoo still going on in an attempt to resurrect them, so far it hasn’t happened and the odds don’t look so good. Being that the default rate was 4x higher with the program vs. the buyer putting down just 3% of their own money, it seems this is not a good time to stir that pot.

However, in my area, I have access to what could be a better program. There is NO downpayment required, NO mortgage insurance required and the loan is fixed for 30 years at competitive rates.

Let me introduce you to: The USDA Rural Development Guaranteed Rural Housing Loan!

While this program is not for every buyer due to the requirement that it must be in a rural area, for those that qualify, it is an impressive program.

Let’s define a rural area. The areas include “open country and places with a population of 10,000 or less and – under certain conditions – towns and cities with between 10,000 and 25,000 residents”. There is an automated rural eligibility map here If you are unsure if the property meets the rural guidelines, this is where you can find out.

Here are some of the program highlights:

• No down payment required
• 30 year fixed rate
• 102% financing (100% plus the guarantee fee)
• Can finance closing costs if appraisal above sales price
• No mortgage insurance required
• No cash contribution required from borrower!!!!!!!
• Unrestricted gifts, no need to document source!!!!!!!
• No maximum loan amount
• No reserves required
• Competitive rates (as set by the underwriting lenders)
• No minimum credit scores. Just need to show reasonable willingness to meet obligations as they become due.
• Streamlined credit approval for scores above 620!!!!!

There are a few restrictions such as types of homes and maximum income with these programs. You can check for your state and county income limits here or contact me for assistance. You can send an email to scott@nwiloanguy.com or call me at 219-695-0369 if you are considering financing your new home through USDA (can only refinance through USDA if the loan is currently a USDA loan).

Hope you found this helpful. If you need more information, please feel free to contact me, your approved USDA Rural Development lender of choice for Indiana.

Scott

PS. My goal is to help more buyers get into homes and help sellers market their existing homes so they and the buyers all win at the closing. Even if you have less-than-perfect credit, we can help. We offer FHA loans, USDA loans, VA loans, as well as conventional loans, and investment loans, both individual and commercial.

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