Skip to comments.100% USDA Home Loans For Buying A House With Bad Credit With No Money Down
Posted on 07/22/2010 10:22:45 AM PDT by Lorianne
Rural Home Loans For People With Bad Credit And Single Mothers __ The USDA Farm Home Loans program provides low interest fixed monthly mortgage payment terms to help low and moderate income households afford a house of their own to keep the family together. In such difficult economic conditions, such rural home loans from the United States Department of Agriculture, Rural Development Branch, can offer better credit flexibility compared to traditional lenders in the troubled and sluggish housing and lending market.
Do not be too put off by the "rural home loans" name of this program since many semi-rural properties just outside city limits also fall within the USDA farm home loans eligibility and will not seriously affect your transport options and commuting time to work or schools in the city and business district.
Farm Home Loans - Buying A Rural House With Bad Credit
That is a small price to pay in return for 100% mortgage financing and no down payment home loan financing under this USDA rural development farm home loan program. Lack of funds for down payment towards buying a house is the biggest problem faced by many low and middle income families in the country.
USDA Rural Residential 100% Financing
With the new Housing Rescue Bill passed in 2009, seller funded down payment assistance and zero down FHA mortgage lending are banned, leaving many bad credit home buyers that cannot meet the minimum 620 FICO score guidelines and down payment limits without any options.
However, many do not realize that it is still possible to buy a house with no money down via USDA farm loans. You can now avoid home ownership problems by borrowing up to 100% of the latest appraised value of the house you have in mind that falls within the USDA rural housing districts.
USDA Rural Farm and Housing Loan Qualifications The USDA Guaranteed Home Loan has a fairly easy and prompt approval process, and the available federal funds for this rural housing service program are not facing any shortages so far. Compared to FHA house mortgage loans, there are no monthly PMI private mortgage insurance necessary and only a 2% upfront fee is charged which can be financed by the loan as well.
You get a 30 year low interest fixed rate rural mortgage with zero early prepayment penalty. The government underwrites and guarantees all USDA rural home loans made by the private lenders such that they will be reimbursed in the event that any borrower defaults on the repayment. As with the usual FHA arrangement, house buyers work with approved USDA home loan lenders directly while the government plays the role of the guarantor and underwriter. Monthly mortgage repayments are thus made directly to the lender and not the USDA.
How Can I Apply For A USDA Home Loan With Bad Credit And No Down Payment? This USDA housing loans assistance program has quite lenient loan requirements compared to private and even the latest FHA mortgage guidelines. Although you need to demonstrate a stable employment record for the past two years and your income must meet the relevant limit guidelines on the area where you intend to buy a house with USDA farm loans, there is no minimum FICO credit score requirements to be concerned with.
The given USDA rural development loans can be used on buying new houses, existing homes, new construction and home improvement projects. Although the USDA rural development loan rates are very low, note that all repairs, renovations or new constructions must be done by a licensed contractor if you intend to do 100% USDA home loan financing.
Finally, all the upfront fees and USDA closing costs can be financed by the seller, with 100% gifting arranged allowed such that borrowers do not need to come up with any minimum cash contributions. If you are a first time home buyer or have not owned a home over the past three years, the USDA home loans also allow you to use the Housing Rescue Plan HR3221 bill to buy a new home with no money down and still get up to $7500 of tax rebates. This tax credit must be paid back over a 15yr period at $500 a month interest free starting the following year.
USDA Rural Home Loan Rates Based on current USDA rural home loan rates and the median rental costs in the same sub-rural residential area, you can buy a home with appraised value of $175,000 that costs just as much as if you were to pay for rentals. Many families have to use a large portion of their income for rental property and never get to fully own a house of their own due to problems coming up with the down payment.
With 100% USDA home & farm loans, these low income families can now truly buy a home with no down payment and on low mortgage interest rates. The exact USDA home loan rates offered is determined on a case by case basis depending on the total income of the borrower and financial status of the household.
For example, a single mother with 3 dependent children can expect as low as 1% USDA home loans rates under the government subsidized mortgage program. For families with higher income or two working parents, the rates are still very competitive compared to private mortgage loan rates.
Note that applying for farm loans does not mean you will be living like a farmer, giving up on convenient amenities in the city and quiting your office job to start growing apples. Most sub-rural properties that meet the USDA loan eligibility locations are not more than 30 minutes drive from the nearest major cities.
You get to enjoy living in less densely populated areas and the USDA rural development loan will also finance land up to five acres. Before you buy a new manufactured home and land package, their staff will also help you inspect the property in detail for to make sure it is built according to safety specification codes.
Buy A House With No Money Down With 100% USDA Home Financing & Farm Equipment Loans
If you have been denied from other government assisted mortgage loan programs due to poor FICO credit score or lack of funds for the down payment, upfront fees, mortgage closing fees etc, you should seriously consider applying for USDA rural development loans instead of continuing to pay money on rentals as tenants. Many households have already benefited from being able to buy a house with no money down using 100% USDA home loans financing and more families are starting to join the program.
Georgia gets another $30M for home loans http://www.effinghamherald.net/news/article/11046/
USDA Rural Developments direct loan program has many positive features including 100 percent financing and low-interest rates. House payments are based on household income. The program also has built in provisions, for example, so that down the line, if someone loses their job, mortgage payments can be deferred and rolled into the end of the loan. This provision is only available to Rural Development borrowers after the loan has closed and isnt available to families that have homes from other lenders.
Just a guess but I’d say most of our congress people have these loans on their 2nd and 3rd homes.
The same stuff that got us in trouble a few years ago. Apparently learning has NOT occurred!
For a bunch of smart people, govt people sure do keep doing dumb things over and over again.
They used to be easier to obtain....not so much anymore. Guidelines are tighter for both the borrower and the property. In addition, I believe that there may be a certain minimum credit score now required.
Especially when you consider that many people miss their first monthly payment. That alone should tell them something but they won’t listen. We’re going down the same road again and is ain’t lookin good.
Isn’t the major reason we are in a financial crisis now due to Clinton forcing banks to make the same kinds of loans to people who couldn’t afford the mortgages?
I guess they think that making the same mistake again somehow corrects the mistake from the first time?
When I applied for a home construction loan in 1982, I had to have 25% of the loan I was applying for and a job that earned enough to pay for the loan or the banks wouldn’t even talk to me. It should still be that way.
Program practically guarantees the former private farms will NOT be producers of food. Failed farmers will NOT be replaced by other farmers.
Sounds like a food production reduction program.
My niece and her husband have great credit but no downpayment (he is disabled and they live on her income). The applied and qualified for $250,000 loan (USDA) for new home on 5 acres. They worked with the approved contractor and had everything in place for the home to be built for under $250k.
The last step was to get an appraisal and the gubment in all their wisdom got an appraiser from 200 miles away who got comps from the area they were building (1) and two comps from the some of the highest property value areas in the state.
The appraisal came in $45000 higher than they were going to have to pay. The result - they were denied the loan because it came in too high...even though the loan was under the limit.
Someone needs to help me understand why it would be bad for you to make a loan on a property that was worth $45000 more than what you were loaning on?
And these are the people that will be soon running our health care. God help us!
Sounds like a food production reduction program.
It's like a less bloody (thus far) path to Zimbabwe North.
“They used to be easier to obtain....not so much anymore. Guidelines are tighter for both the borrower and the property. In addition, I believe that there may be a certain minimum credit score now required.”
Ah but as it points out at the HUB site with a USDA loan you don’t need a credit score.
I'm pretty sure that the individual banks who deal with USDA rural housing loans can still place their own guidelines on.
“I’m pretty sure that the individual banks who deal with USDA rural housing loans can still place their own guidelines on. “
Why would they need to? The loan is backed by the gov’t.
Plus if a bank agrees to take a USDA loan they have to agree to the USDA terms
nice uh> No or bad credit score? No problem
I’m not an expert on this, but I think even though the loan is backed by the Government, there are buy back provisions to the banks who originated the loans. Creating additional guidelines and requirements may be their way of keeping buy backs to a minimum.
I get what you’re angry at though.
The problem with mortgage loans was really not the fact that subprime loans were available to borrowers. Rather, these loans were packaged and sold on the secondary market as prime products (which included Fannie Mae and Freddie Mac).
Because of Government intervention, subprime loans no longer exist. Instead, all borrowers must go through a nightmare of guidelines and procedures in order to get their loans. Consequentially, most borrowers cannot get mortgages today, which means the housing market will continue to sink.
Article from 2 years ago:
Home Buyers Turn to USDA for Mortgages
Agency Program Backs Loans to Aid Rural Development; No Money Down — Even Now
You may be right but it seems strange that at their web site they can tout the advantages of a USDA loan and then require all the things they said they didn’t require.
I hope you are right and we aren’t still giving loans to people who can’t pay.
I also question why the USDA would be in the home loan business to the extent it is.
between the loans and the money we continue to give to “ black farmers” this is a joke
the USDA gas given more reparations to more black farmers than there are black farmers
If you pay $500/mo for 15 yrs that's $90,000. Am I reading this wrong or do they give you 15 yrs to pay it back, making payments not EVERY month but whenever you can?
Nope, you read it correctly.
So you get a $7500 tax credit that you have to pay back and it costs you $82,500? Good gawd! The only responses I can come up with shouldn’t be put in print....at least not on FR.
Loser Loans to be paid for by the rest of us that are not losers.
“Are you a stupid slut incapable fo keeping her legs closed? Do you hang out at crack houses and dropped out of school to party? If so, visit Uncle Sugar for your new home. We’ll give you one! Don’t worry, you won’t have a mortgage. We’ll get da rich crackas to pay for it!”
ping for later
If these are the same FDA loans that they made back in the 1990’s when my Dad was still building homes that would’ve been over the limit of what they are allowed to be worth. It’s really a crazy arrangement and I would encourage them to try to go another route if they want to build because with these type of loans the home can not gain value and if they do if they would ever sell they would owe the government the money that exceeded what they paid for it.I’ve seen a lot of people really make bacis homes nice thinking they could amke a profit when they sell and buy something nicer but these type of loans do not allow that.