Many homebuyers don’t know that USDA Rural Housing offers a few different home loan programs. The first program is the 502 USDA Guaranteed Rural Home Loan and second is the USDA Direct mortgage. The 502 USDA Guaranteed provides low and moderate Florida income rural residents with better access to affordable housing finance options with no down payment and min out-of-pocket costs. USDA Direct offers loans to very low and low income families and this program is done by the USDA office directly. The more popular 502 Guarantee program is only offered through USDA approved lenders and banks.
Highlights of 100% USDA Mortgage:
- Single Family owner occupied primary residence financing – up to 102% loan to value. The extra 2% is used to financing the USDA Guarantee or funding fee as more commonly know.
- Property must be located in an USDA eligible rural area and borrower cannot have the means (large down payment, savings) for conventional financing.
- 30 year fixed rate term only.
Benefits of a USDA Mortgage:
- USDA loans provide higher loan to value limits than FHA or Conventional loans. USDA is the only loan in FL that offers 100% financing without a down payment needed. However, homeowners can put down money if they choose.
- No saving reserves minimum
- USDA loans provide options to finance ( roll in) closing costs and prepaid items into the loan up to the appraised value of the subject property. Or, the sellers can pay all closing costs up to 6%.
What homebuyers could benefit from the 100% USDA Rural Housing mortgage? The program is geared toward to moderate income households. Many Florida public service workers like teachers, police, firefighters are drawn to the USDA RD program due the $0 down payment required. The USDA program remains especially popular with Florida first time buyers.
Learn more about the most frequently asked USDA questions here. USDA Mortgage Source is Florida’s leading USDA Rural Housing resource. Questions? just submit the short info request form here anytime for fast service. You can also contact us at ph: 800-743-7556 7 days a week.
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