More Options Than You May Think
There are more options than you might think when you are ready to finance a home. In addition to traditional bank loans, there are federal programs that may fit your needs.
USDA Rural Development 502 Guaranteed Loan Program
This program is available for both first time home buyers and non-first time home buyers. You may borrow up to 102% of the appraised value of the home. Mortgage insurance is not required and qualifications depend on annual income and size of family. The loan will be repaid in monthly payments over a 30 year term. Fixed interest rates are available. For income qualifications and current interest rates, refer to USDA Rural Development's website at www.rurdev.usda.gov.
USDA Rural Development 502 Direct Program
This program is also available for both first time home buyers and non-first time home buyers. You may also borrow up to 102% of the appraised value of the home. Mortgage insurance is not required, but income limits are more restrictive and also depend on family size. Subsidized interest rates are available based on need. The subsidized rates are subject to recapture if home is sold. The loan term is up to 33 years. For more details, refer to USDA Rural Development's website at www.rurdev.usda.gov.
HUD finances up to 93% of appraised value of the home. It requires mortgage insurance, which runs a minimum of $50 per month or more depending on the amount of down payment. A 20% down payment is required to avoid the mortgage insurance requirement. The loan term is 30 years. Visit your local bank for more details.
Veteran’s Administration Loans
The terms are similar to Rural Development guidelines. The buyer must be a U.S. veteran to qualify. Visit your local bank or the Veterans Administration for more details.
Conventional bank financing usually requires at least a 20% down payment or mortgage insurance. It carries a 30 term. This is available and used if the home buyer does not qualify for the other options. Visit your local bank for more details.