Wednesday, April 13, 2011

Is there still 100% financing available to buy a home?

By Toni Ryan, First Priortity Financial

The answer is yes!  The Department of Agriculture, known as the USDA, has home loan programs for the purchase and development in rural areas.  Much of the property in Placer County, from Loomis east to the state line qualifies for this type of financing.
 Rural housing Direct Development Loans are directly funded by the government. This loan program is commonly referred to as Section 502 Loans. This is 100% financing and although the program comes with a 3.5% funding fee, this can be added to the base of the loan amount so no down payment is required.  There is no monthly mortgage insurance premium added to the payment which keeps the monthly cost lower than FHA financing. The term is usually 30 years. Rates are comparable to conventional financing and loans are approved with the borrowers' percentage of total debt to income of 42%.  The house payment consisting of principle, interest, taxes and insurance should be no more than 31% of the borrowers' total income.
 Funds can also be used to build, repair, renovate or relocate a home or to purchase and prepare sites, including providing water and sewage facilities. Homes must be of modest size, cost and design and meet national building codes.  Manufactured housing must be on permanent foundations.
 It is important to note that there are income limits to this program because it is designed to help low income families attain home ownership.  Mortgage payments are based upon the family's adjusted gross income.  The maximum for a family of four in Placer County is $84,100 and the minimum credit score needed to qualify is 640. 
 Use this valuable program to attain your dream of home ownership. For more information, check out:

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