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.
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 |