You have all heard me speak of the United States Department of Agriculture ( USDA ) Rural Development Home Loan. In short, the Rural Development USDA Loan offers 100% financing if the property you select to call home is located in an eligible area. Yes, this is a 100% loan to value (a.k.a. 100% LTV) government guaranteed home loan that is designed to help families into homes – you do not need to be a first time home buyer to qualify.
Some of the USDA major benefits TODAY are:
-) 100% mortgage LTV based on the appraised value
-) There is no down payment required
-) There is no minimum Buyer contribution
-) There are no reserves required
-) up to 6% Seller concessions
-) a low 30 year fixed rate
-) NO MORTGAGE INSURANCE REQUIRED
Now the USDA Mortgage or the Rural Development Home Loan is changing come October 1st! All the major benefits mentioned above will remain with the exception mortgage insurance…yes, the USDA is getting mortgage insurance!
Currently the mortgage insurance with a USDA Mortgage or a RD Home Loan is replaced by the 3.5% funding fee. Now effective October 1, 2011, the funding fee is being reduced to 2%with an additional annual fee of 0.2% of the principal balance.
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