The USDA Rural Development is committed to spurring economic development in Rural America. The United States Department of Agriculture is currently granting millions of dollars in rural housing loans, allowing buyers to obtain an affordable opportunity to stake a claim to a Picture Perfect Home!

There are income restrictions for borrowers and by the name of the program, homes that might be eligible for this program must be located in an approved rural area. 

One of the main features of this loan is that no money down is required, which make this a 100% financing loan.  While there is a guarantee fee, much like Private Mortgage Insurance [PMI], this fee can be included into the loan.  This means that there will be no Monthly PMI insurance required, helping the buyer to obtain a lower payment.

While this loan program is a no money down loan, one of the features of this loan is that a there is no minimum credit score required, only that prudent underwriting and common sense be used in approving a buyer’s loan.  Currently, many of the low down payment loans may require a buyer to have “reserves,” typically two months of the house payment [PITI] remaining in an asset account at the time of closing.  The USDA Rural loan does not require this factor for loan approval. In addition, a Seller can contribute towards the closing costs and pre-paids, allowing a buyer to have minimal money invested.

A new home loan for low to moderate-income borrowers now is available at Peoples Bank Home Lending.  Now a borrower can purchase a 1 or 2 unit property as their primary residence.  While the buyer does not have to be a first time homebuyer, they cannot own another home at the time of closing! 

A second mortgage can be used for closing costs, a down payment, or for purchasing an up front PMI, if that option is chosen.  While this program has been created for the home buyer to obtain a ‘no-money’ down loan, many times this program can help provide better terms for buyers who had planned on providing their own down payment. 

This program has been created using a National Homebuyers Fund, which Peoples Bank is certified to use in obtaining the 2nd mortgage.  The first mortgage is a Conventional 30 Yr loan. 

To find out what you can afford for a home, to show you what loan options are available for you and to determine if you can qualify for these specialty programs, please feel free to call me at (913) 234-8670.  To be extremely accurate with the options available to you, I highly recommend to each of my clients that they apply for a home loan.  The easiest way to do so is to apply on line at my personal web portal.

To do so, click on the “APPLYWITHJIM” banner to the right of this section to be directed to my personal web portal, www.applywithjim.com . (You know that you are at the correct site because you will get to see my picture)  From that web portal, you will click the “apply online now” button and be redirected to our bank's secure web site, actually my page on my bank's secure web site

• Beginning October 1st, 2008, FHA will no longer allow for the use of a Down Payment Assistance Program for the down payment.  This Down Payment Assistance Program came from a third party Non Profit Organization, and was terminated in the recent action of the United State Congress, in House Resolution 3221.  Keep tuned to this site as some Congressmen and Lobbyists are working to re-instate this program, probably for home buyers with higher credit scores.

• Beginning January 1st, 2009, the minimum “INVESTMENT” in the purchase of a home with an FHA mortgage will increase from 3% to 3.5%.  In addition, the minimum down payment will increase from 2.5% to 3.5%.

• Delayed – The use of credit scores to determine the Upfront Mortgage Insurance Premium and the Monthly Insurance premium has been delayed for implementation until October 1st 2009. 
  
  The current factors for a purchase FHA loan are 1.75% Upfront MIP and .55 monthly MIP.  The Upfront MIP can be rolled into the loan and financed or the Seller can pay for it as part of the closing costs!