Florida still has many locations considered rural and therefore eligible for 100 percent USDA home financing. Don’t let the word “rural” scare you, as many locations right on the outskirts of Jacksonville, Tampa, Orlando, Tallahassee, Lakeland, Ocala, and Gainesville, are still approved locations. The United States Department of Agriculture & Rural Housing (USDA Rural Housing) offers 100% financing through approved lenders and banks in these approved locations. The program is fantastic for first time home buyers since it requires no money down and has very competitive 30 year fix interest rates. In addition to 100% financing, the USDA program costs less overall in regards to reduced mortgage insurance costs, over 50% when compared to the more popular FHA loan.
The USDA program has been around for many years with the goal of providing flexible mortgage options for those purchasing homes in rural or semi-rural areas of Fla.
Basic USDA Loan Benefits Below:
- 100% financing – The Federal government insures or backs USDA loans, and allows 100% financing as a way to help develop and expand rural locations in Florida. The USDA mortgage also allows for the seller of the home to pay the buyers closing costs, up to 6%. With that home buyers can generally close on a home with little to NO money out of pocket.
- Loan approval is simple – Getting qualified and approved for a USDA loan in Florida quick and easy. Often times the entire pre-approval process can be done in minutes. There are no special requirements for first-time buyers class or education that is needed to apply. Buyers just need to ensure they have reasonable credit and income below the max limit set for your County. Contact us to discuss below income limits in more detail.
- No savings requirement – Home buyers are not required to have a certain amount of savings to be approved. Most conventional loans and FHA loans require down payments and savings reserves for buyers to get approved, but not the USDA program. Buyers can also receive gift funds if they choose to put money down.
- Safe fixed interest rate– One of the great advantages of the USDA loan is the fixed 30-year interest rate. Compared to other traditional loans where the interest rates can vary, the interest rate remains the same for the entire life of the loan. No prepayment penalty or adjustable rate terms. This is good because the homeowners can plan out their fixed monthly expenses more easily.
- Eligible Property Types – The home to be purchased is not required to have any special USDA designation. Any single family home located within the USDA approved map is eligible. Please note, the home must meet basic HUD requirements in regards to overall livability and condition. Basically, the home must be in overall decent repair. The home cannot be a project rebuild, mobile or manufactured home. No vacant land or lot loans permitted.
Additional Information Home Buyers Should Know:
It’s usually the small things that can negatively impact your credit. If you think your credit needs some work, check it out in advance before you make an application. Keep in mind, your interest rate is tied to your credit score. Buyers with the highest credit scores generally receive the lowest interest rate which can save thousands over the long term.
As of 2016, a credit score of 620 or better is needed for the 100% USDA loan. If you came out of a bankruptcy or foreclosure, or other financial hardship you would need to have maintained a perfect credit since (3-4 years) regardless of how high your current credit score may be. Remember, a 620 credit score do not guarantee loan approval.
Solid review of buyers debt must be done by lenders to ensure the buyer can meet the obligation. Mortgage companies generally don’t want to see buyers total debt load that’s higher than 41 percent for a USDA mortgage approval. Buyers will also need two years of consistent employment with large gaps in employment. Note: employment is not required to be 2 years with the same employer, just in the same line of work.
Home buyers that want to learn more can call ph: 800-743-7556 or just fill out the short info request form on this page.