December 11, 2017

No Down Payment Options May Be Available For Your Next Home Purchase

 

Currently in tough economic times, people are searching for home loans with a minimum down payment.  In 2008 many home buyers chose to finance their home with a Government program FHA (3% down payment).  Now many people are unable to afford homes closer to major cities, so looking to buy in rural areas may have its perk!!

USDA home loans are directly funded by the government like FHA home loans.  These home loans are available for households with low to very low income.  On a positive note, borrowers may obtain Zero Down Payment financing to purchase a new home.  To qualify, the property must be located in specific rural areas, there is a maximum loan amount per county, and as a borrower you have income limitations.  

To learn more about the opportunity of the USDA loan to see if you are eligible, the following links are provided.  

 

Approved Rural Areas Link – which can determine if a property you are interested in falls in the approved rural area.

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp&NavKey=property@11

 

Income Link – To compare your income with the current income limits per area.  

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=pageLoad&urlToLoad=http://www.rurdev.usda.gov/rhs/sfh/sfh_direct_loan_income_limits.htm&NavKey=incomelimit@11

 

At the bottom there is an image that breaks down the loan limitation per county.  

 

Here are some basic guidelines, as a mortgage professional; I can answer any questions you have regarding the basic guidelines below:

  

102% LTV!

Manual Underwriting

Owner-Occupied only

Seller can pay Funding Fee (2% of loan amount) and all closing costs and prepaids

Funding Fee may be financed

Closing costs / Prepaids may be financed up 102% of the appraised value (even if value exceeds price)

Property must be located in a USDA Eligible Area

Borrower income cannot exceed 120% of HUD Medican Income for subject property area

NO Mortgage Insurance

Purchase and Rate/Term Refinances only – NO CASH OUT

Refinance loans allowed only if underlying mortgage is also a USDA loan

Gifts / Grants are allowed

Standard 29 / 41 ratios can be exceeded case-by-case with good compensating factors

Home Ownership Counseling required for first time home buyers

Brand-New Manufactured Homes are allowed. Dealers must be approved by USDA

SFR, PUD and CONDO properties are allowed. Condos must be FHA/VA approved

Full Appraisal required

Subject property may not be income producing (no farms)

Borrowers may not already own an adequate home

Site value should not exceed 30% of total value

Cost of repairs / improvements can be built into the loan using a ‘subject-to’ appraised value

 
 
   

 
 

 

Washington State USDA Loan Limits
County or Equivalent Loan Limit
Adams $194,200
Asotin $198,500
Benton $208,905
Chelan County $245,550
Clallam $225,150
Clark County $284,000
Columbia $198,500
Cowlitz County $200,160
Douglas County $209,400
Ferr $200,160
Franklin $202,700
Garfield $200,160
Grant County $196,600
Grays Harbor $200,160
Island County $289,750
Jefferson $332,500
King County $362,790
Kitsap $302,100
Kittitas $230,500
Klickitat $200,160
Lewis County $200,160
Lincoln $196,000
Mason $235,600
Okanogan County $200,160
Pacific County $200,160
Pend Oreille $200,160
Pierce County $329,900
San Juan County $362,790
Skagit County $283,983
Skamania County $273,600
Snohomish County $333,900
Spokane $202,350
Stevens $196,300
Thurston County $274,550
Wahkiakum County $200,160
Walla Walla $200,160
Whatcom $285,000
Whitman $200,160
Yakima County $200,160



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