You would be surprised what’s considered “rural” under the USDA Rural Housing Loan Program. If you reside within the state of latest Hampshire, you presumably sleep in a town that’s deemed “rural”.
Nearly half the towns in Essex County, Massachusetts are considered “rural.” And Middlesex County, Massachusetts also has 20 qualifying towns. This provides the house buyer an enormous number of homes to think about. And for Realtors, this is often a program that they have to know and utilize through their mortgage banker of choice.
The advantage of this program is far quite 100% financing. That term is an irony when handling the USDA Rural Program, especially within the housing climate we are in today with large numbers of bank-owned foreclosed properties hitting the market. Let me explain.
With banks attempting to quickly sell their foreclosed properties, it’s an excellent opportunity to urge the house of your choice at below market price. Especially for the first-time buyer, with the stimulus decrease and record low rates, the celebs are truly aligned to capture the deal of a lifetime. So why that is this Rural Housing Program so great….well here’s why. The “100% financing” aspect of it doesn’t mean 100% of the acquisition price; it actually means 100% of the appraised value. Further, guidelines say that you simply can borrow up to 102% of the appraised value, which might include the two guarantee fee paid to the USDA.
So, price vs. appraised value. This is often the key. For instance you’ve found the right home and it’s during a “rural” town. The property is bank-owned and is being sold for $245,000. Though the appraised value is higher, at $260,000. It is a beautiful home, but needs a replacement septic, costing $7000. Listen up now, this is often the really great feature of this program.
You are not limited to a loan amount of $245,000 like under other 100% financing programs. You’ll actually get a loan amount of $265,200 (102% of the appraised value). That $20,200 difference from price can include the septic repair, All Closing Costs, appraisal fees, inspection fees, water tests, and most anything associated with you purchasing that home.
So this program truly allows you to urge into a home with no money out of pocket. Keep your savings within the bank to supply security during this shaky economic time. Other beneficial features of this program are not any Monthly MI, expanded qualifying ratios and versatile credit guidelines, not limited to first-time home buyers, and low 30 year Fixed rates.