FHA (and VA) loan programs have been received a lot of attention lately due to the credit crisis and the practical elimination of subprime lending.
Recently, there has been more buzz regarding FHA as a result of the passing of H.R. 3221, The Housing and Economic Recovery Act of 2008. Aside from the plans to help prevent more foreclosures for existing homeowners, a large part of the attention has been caused by the elimination of seller-funded downpayment assistance. Many potential homebuyers and real estate professionals are worried to see what the fallout will be. It is possible that there will be a further drop in home sales as many potential homebuyers will find that saving for their downpayment is prohibitive.
One alternative is the use of another lesser known government loan program offered by the U.S. Department of Agriculture that has no downpayment requirement, the USDA Guaranteed Rural Housing program. True to its name, the USDA program was created to help potential homeowners in rural areas; however, it can be used in the outskirts of some of Arizona’s major metropolitan areas where many of the most affordable homes are currently located.
The following are USDA Guaranteed Rural Housing Highlights:
- 102% Financing based on appraised value, if appraised value exceeds sales price, borrower can finance closing costs and repairs
- 30 Year fixed term
- No monthly mortgage insurance, 1-time guarantee fee of 2% that you finance into the loan.
- No downpayment requirement.
- No minimum cash contribution requirement
- No asset requirements.
- Borrowing of unsecured funds for closing allowed (with minimum credit score requirement).
- No First Time Homebuyer restrictions.
- No maximum on seller concessions and 100% gifting is allowed – You can purchase a home with no money of your own into the transaction.
- No minimum credit score requirements.
- Non-traditional credit is acceptable is no credit is available.
- Previous housing payment is not required.
- Declining markets do not affect LTV.
USDA Property Eligibility and Income:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Contact me with questions and for more information.
Steve Lines
Direct: 480-344-3662
slines@bestfhalender.com
Throughout my lending career, I have been known for my knowledge, experience, honesty and integrity. I hold my mortgage and accounting experience in high regard. I have been involved in the real estate finance industry since 1996 when I took my first job as a loan office.
