USDA Rural Development $0 Down Home Loan Program

 Many people call this program the first time homebuyer's program. This is due to not having a up front down payment requirement.  The first time homebuyer often doesn't have available cash reserves to pay the down payment required for many other loan programs. 

 USDA Rural Development Mortgage Highlights

1. What if you could buy a home with no money down? 
2. What if you could finance your closing costs up to 101% of the appraisal value?
3. What if you could have a 30 yr fixed rate loan with no prepayment fees?
4. What if you could come to closing with either no money or minimum money out-of-pocket? 
5. What if the Seller can pay up to 6% of the purchase price towards your closing costs? 
6. What if you could work with one of the top USDA lenders in Ohio for USDA? 

 When buying a home with the USDA Rural Development loan program, the home must meet certain basic requirements.  

• Central heating system with vents to all rooms 
• Roof must have at least 2 yrs estimated life expectancy 
• All chipping or peeling paint must be repaired 
• Electrical and plumbing systems must be functional 
• All electrical switches, outlets, and junction boxes must have covers. 
• No holes in walls or ceilings
• All floors must have floor coverings. No exposed sub-floors.
• If no public water - Water test and well inspection required
• Septic system inspection (If applicable) – Only if appraiser requested
• Termite inspection – Only if appraiser requested      

Myth - You can’t have previously owned a home or currently own a home.
Fact – If you have outgrown your current home or have a job transfer over 60 miles from your currently owned home, you can qualify for a new RD loan.

Myth – You can’t have more than 20% down in liquid assets.
Fact – There is no limit on liquid assets now.

Myth – You can’t have more than 5 acres.
Fact – Properties can have up to 20 acres now.

Myth – There can’t be any pole buildings or sheds on the property.
Fact – Properties can have both pole buildings and sheds.

Myth - You can’t have any past or present negative credit.
Fact – Minimum credit scores of 620 can be considered. You can be 3 years out of Chapter 7 Bankruptcy or immediate consideration out of Chapter 13 bankruptcy if all repayments are complete.

Before you rule out the $0 down payment RD program give the mortgage experts a call at Concorde Mortgage Company. Our many years of lending experience with the RD program can help you sort through all of the myths about this program.
 

620 to 639 Credit Scores – Manual Underwriting

• No late payments – Previous 12 Months
• No Accounts in Collections (except Medical )
• Strict Ratio Requirements – 29 /41 – (Housing Expense/Total Debt)
• Must have adequate reserves for PITI payments
  

640 Plus Credit Score
   

• 1 yr employment history – no employment gaps over 30 days
  New employment – Must be past any probationary period and have (1) month of  Paystubs
• 34/45 Ratios (Housing Expense/Total Debt) Maximum – If everything else is good
• Federal CAIVERS report – Must be clear of any Federal Debt Defaults – Any previous RD loan default, even if past 10 yrs, will not qualify for a new RD loan.
• Collection Accounts – Payment may be required – Depends on other account factors
• Bankruptcy – Must be (3) yrs from date of BK discharge
• Foreclosure – Must be (3) yrs from property transfer date from borrower to other party.
• Open Liens/Judgments – Must be paid unless payment plan is in place. Must have proof of 12 months of payments.
• Charge-offs – Must show $ 0 Balance.   

Based on number of people living in home.
              1-4                        5+
         $ 103,500            $136,600