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What Is The USDA Rural Development’s Single Family Housing Guaranteed Loan Program? Is It Right For You?
HomeTown Lenders, Inc. Is A Top Producing Nationwide & Arkansas USDA Purchase Loans Lender
We have helped many families and individuals in Arkansas, Alabama, California, Florida, Indiana, Illinois, Kentucky, Louisiana, Maryland, Michigan, Missouri, Mississippi, New Mexico, South Carolina, Tennessee, Texas, and Virginia achieve their dream of home ownership through high quality Nationwide and Jackson MS USDA Purchase Loans serviced through the Home Town Lenders Inc. – Ridgeland, MS Branch.
The USDA Rural Development’s Single Family Housing Guaranteed Loan Program is designed to help borrowers purchase homes in rural areas. USDA Home Purchase Loans are an excellent benefit for first time home buyers as well as growing families looking to obtain the American dream of home ownership. Borrowers that qualify can purchase a home with no money down, which makes buying a home extremely affordable. In addition, USDA purchase loans also offer very flexible underwriting guidelines, the ability to finance in closing costs and a competitive a 30 year fixed rate option.
Contact our Nationwide USDA Home Purchase Mortgage Loan Officers to get prequalified and start your mortgage loan process.
Why is a USDA Home Purchase Loan A Great Deal?
The USDA still offers 100% financing that makes it the one of the most attractive purchase loans still out in the market, thanks to its overall low cost as well as flexible underwriting process that allows for compensating factors.
All USDA loans are run through an automated underwriting system called GUS (Government Underwriting System) in order to get an approval. In the event your file does not get a full approval through the GUS system, it’s possible for your loan to be manually underwritten by a person who can take certain things into consideration.
For example a high credit score, low debt to income ratio, or even assets can help offset negative factors on your application. A USDA lender may even consider other types of payment history like rent or utilities when making a decision on an approval. This common sense type of manual underwriting can make the difference when it comes time to get approved for your USDA loan. In addition to this, by not having a down payment requirement and being able to finance your closing costs you will literally save thousands at closing.
What About The USDA Funding Fee?
The USDA funding fee is collected by lenders at closing and is financed into the loan which helps offset the cost to fund the USDA program. There is also monthly mortgage insurance on all USDA home purchases.
Your monthly mortgage insurance will be .40% and 2.0% for the funding fee
What Are the Advantages of A USDA Purchase?
- 100% financing
- Credit scores down to 620
- Up to 102% loan to value
- Manually underwritten loan OK
- Easy to use gifts for closing costs
- Allows for 6% seller paid closing costs
What are The Requirements For A VA Purchase
- Minimum credit score
- Geographic eligibility
- Primary residence only
- Income limit maximum
- Debt to income ratio cap
- Single Family Residence
Frequently Asked USDA Purchase Questions
- Copy of driver’s license
- Copy of social security card
- Two most recent paystubs
- Two years W2’s or Tax Returns
- Fully executed sales contract
- Contact information for insurance agent
You can finance some of the closings costs into your new USDA loan. The program also allows for gift funds from family members or friends.
Currently the USDA only offers a 30 year fixed mortgage.
member’s retirement, separation or discharge from active-duty military.
The USAD Purchase funding fee is 2% and can be financed into the new loan if you choose.
Yes, As long as you negotiate the sales contract to include a seller contribution the USDA Purchase Program allows for certain costs to be paid by the seller at closing.
Yes, an appraisal will be required for your new USDA home purchase completed by an independent appraiser.
Currently the USDA Purchase Program is only allowed for primary residential property.
In order for entitlement to be restored, the prior VA loan must be paid in full and the property disposed of. If you no longer own the property, please state as such on your application form 26-1880 and resubmit. Do note that you can obtain a restoration of entitlement without disposing of the property when the loan is paid in full on a one time basis.
Ask your lender to verify all the qualifying factors for you. By simply applying for a USDA home purchase the lender can determine if you qualify or not.