The Mortgage Man

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Archive for Affordable Housing

The Best 100% Loan Program Available

USDA Rural Housing loans offer one of the best loan products available today.

USDA Rural Development

With a title like that, you are probably on the edge of your seat to hear more. The USDA has a Rural Housing loan that is arguably the best no money down mortgage on the market today. Not long ago, the options available to you for no money down mortgages were long and varied, but times have changed. The one time power house of this category was Fannie Mae’s “My Community Loan”. It provided a great opportunity for first time buyers that allowed for a no money down mortgage with great terms. Since Fannie Mae has tightened up the reigns, the My Community Loan suffered in the cutbacks, and is no longer a viable option (particularly if your home is designated in a “declining market”).

Rural Housing is not a new loan program, but it has stepped up as one of the best options available in today’s ever tightening market. This loan is designed for purchase transactions and allows for up to 100% financing of the Appraised Value. This is significant because for those of you who are unfamiliar with the mortgage process, all other loan programs allow the loan to value ratio to be determined by the lower of either purchase price or appraised value. This means that if you are buying a house for $100,000 and it appraises for $120,000, your loan amount and down payment are based off of the lower purchase price.

With the rural housing loan, you can use that appraised value to your advantage by financing the full purchase price along with all of your closing costs, allowing for a true no money down transaction. This is unique, and is the only loan program available today that allows you to use the appraised value this way.

For clarification, the name might make you assume that this loan is only available in the deepest darkest backwoods farming areas where no one lives, or wants to. This again is not the case. It is obviously not a loan designed for highly populated urban areas. But, it is available in most areas of the country. In my primary area of the Florida Panhandle for instance, almost 80% of the area is eligible for this loan program.

Call me today to find out if this is the right loan for you. Or, ask your mortgage professional if he (or she) offers this product.