In case some of you haven't been informed, 100% is alive and well in the financing side of the Mortgage World. Let not the rumors of their demise mislead you. VA (for those who have served our country) and USDA (Rural Development 502 Guaranteed Housing Loan Program) are becoming more and more important for certain borrowers and areas. I shall concentrate on the latter, giving you a snap shot of the advantages of seeking a USDA Loan.
- First off, there is no down payment required. Indeed, I'm master of the obvious:)
- There is NO Mortgage Insurance. Unlike FHA & Conventional Loans, this product doesn't require Mortgage Insurance of any kind!
- No Cash Reserves Required. What that means is that you don't have to have money in the bank or in any sort of retirement account after closing. That written, I'm personally a big fan of reserves. Why? Hey, once you buy a home and something goes wrong (inevitably, it will) the financial responsibility of fixing it lies with you.
- No pre-payment penalty. Actually, the majority of loans in this atmosphere don't have a pre-payment penalty. So, if you hit it big at the casino or win the lottery, feel free to pay your house off in full without incurring any penalty whatsoever. Then again, if you win that type of money, you may want to keep the mortgage for purposes of a tax write-off:) Of note, I'm not an accountant. And I don't play one on television. I majored in it when I first went to College, but quickly opted for psychology... as accounting bored the snot out of my nostrils.
- No First Time Homebuyer Requirement. There are no special classes to take or education to go through prior to closing. I do though, strongly recommend doing your due diligence (your Mortgage Guy or Gal should help you with this) and educating yourself to not only become a homeowner, but a smart homeowner.
- New and Existing Homes OK!
- No Seller Contribution Limit. The Seller can literally pay ALL of your closing costs.
- 100% gifted closing costs is acceptable. If you have a kind and financially capable relative, they can flip the bill for all your closing costs.
- It is a fully amortized 30-year fixed rate loan. It isn't some complicated Interest-Only, Pick a payment, pied-piper pecking Peter type of loan. It's pretty simple. Each monthly payment you make pays down your interest & your principle balance.
- Loan amount can include closing costs and repairs up to 102% of the appraised value.
Folks, this can be a great product for a lot of people in applicable areas throughout our Nation. It's still not known about by a lot of people... and individuals in the Real Estate Industry. This is just a brief overview. With any further questions, contact yours truly, Jason Sardi@ jsardi@ihmci.com or give me a ring Toll Free at 1-866-262-8720. Have a wonderful weekend and remember, if you have financing questions and are in doubt... give that Sardi character a shout:) If I don't know the answer, I'll find it out.
So much of PA is rural that I would think this would be a great product for so many people here. Let's move and get our own cow! Seriously, excellent information as always.
Thanks for the details on this Jason. Many know about VA but USDA does not have as much visibility.
Jason,
You talked me into being optimistic about USDA...sounds great...!!! Thanks, Fran
Jason - Great features here of the USDA product. Gary is right in that USDA does not get much visibility nor is it talked about as an option. I did not know it existed at all if it was not for you and Belonger blogging about it. Great info ! ~ Chris
Well said Jason!
Now repeat! Repeat, repeat, repeat, repeat!
Enjoy Easter and start all over early Monday!
Get the word out!
Bill
Jason, I love the USDA Rural Housing loan. For years they were the loan of choice in Poinciana. They are just now starting to make a comeback.
Jason, I love, love, love the USDA loans. The only two area's in our county not qualified are the Cities of Ann Arbor and Ypsilanti. But, that leaves the most of them. Our lender is not famliar with them so hope to do more. Great post!!
Jason- Some of the areas surrounding Louisville qualify for USDA Rural Housing loans. I've not worked with a buyer who used it, but it seems like a good program. Don't they also set the interest rate based on income?
I don't think any of the areas that I cover qualify. I'd love to see your pic blown up. I looked it up before and could have sworn that I couldn't find an area I cover but I could be wrong :P
My Jennifer - You know how I feel about cows, there are better ways to get Milk:) Thank you sweetie!
Gary - That it does not. I see that changing; some folks have been doing this since day one. The funds weren't always available. I hear that 17+ Billion has been injected into the system between ordinary allowment and the stimulus. If that is true, the chances of running out of money in 2009 are dim.
Fran - Proof is in the proverbial pudding, my friend. I hope and trust that the product is solid. It already has longevity and looks decent on paper.
Thanks Chris. It should be repeated that I'm not a huge fan of 100% financing. Yet, there's always a market for it and typically a sense to it. USDA makes some sense.
Bill - Happy Easter to you, Sir!
Bryant - You're familiar and I'm aware. For the past few months, I've been reading up on "Farm Lending" like a madman. It is a knowledge based product, end of story.
Missy - Full frontal nudity disclosure here. I can do loans in your area:)
Erik - Good question, and I'm pretty sure of the answer. Interest Rates on USDA Loans are akin to Conventional & Government Financing (one in the same, these days). They look at your debt. They look at your income. Regardless of the interest rate (which will be based upon other models), it based upon the market, not income. To answer your question, I don't believe so.
Krista - Just give me the address, I'll tell you if it qualifies. And access to the site is damn easy:)
This is one of the better programs out there for those that don't fit the first time buyer mold. Thanks for bringing it back to the forefront for discussion. It seems to get buried among the current mess and people think there are no options for them.
Great post my friend. HAPPY EASTER!!!!!
Jason, It's been some time since doing a USDA loan, correct me if I'm wrong there are income limits so the well to do are not likely candidates?
Carol - Shame on me and others for not recognizing and understanding this program years ago. The majority of my business from day one was conventional stuff; I rarely traveled out of the confines of such (sub-prime & commercial paper here and there). I heard of it time and again but didn't really dive into like I should have. That has long since changed.
Sharon - Happy Easter to you as well!
Steve - You are correct. There are limits for income that vary county to county. The well to do in their particular areas are probably not likely candidates.
Jason,
I don't hear much about the USDA here but I think it could be a good opportunity especially with you being able to offer it in FL.
Hope you guys have a good Easter as well,
I reblogged this on my outside blog, so hopefully readers will see this! This is an excellent product and most of Schuylkill County does qualify.
Jason, I have a sale right now where my first-time buyers are getting a 100% USDA Rural loan. Most of my area qualifies as well! I had no idea until my local lender offered it to these buyers. Great info!
This is all great stuff J. Just so good. I have two people in my office who live on U.S.D.A. loans for all of these reasons. I love the zero down element.
Yes, yes...I agree but have you read this post?
Should ActiveRain Ban Profanity?
...and you're just going to sit there? Sorry, I am laughing too hard because I am going arounf provoking as many people I know to comment on this absurdity!
Jason- I have been doing these loans for years. This program is actually one of my favorites. There is a limit for seller concessions of 6%, and there is a funding fee (basically MIP) of 2.04% but it is finance-able and there is no monthly mortgage insurance. This program ROCKS!
Neal - It's also a good product to market listings, if they are in applicable areas.
Thanks Erica and you are so right about Schuylkill County!
Diane - I thought your area may be a good match as well, but wasn't sure. Kudos to your local lender.
Bettag - Me too. I'm guessing a lot of my 2009 business may come from this very product.
Russell - But of course, I already commented;)
Michael - Then you are one of the few here in Pa that I know of who have done these for years. Good for you, my friend. Maybe I'll have to bend your ear a time or two down the road.
I'm hurt...
you didn't post it in the USDA RD group!:-)
Kidding aside, this is a great post on the virtues of a great loan product. Nice work getting the word out Jason.
Gerry Suarez, Jr.
Your FHA Loan Pro!
Jason, I have to admit I have NEVER heard of this. 28 years in this business and still learning. Thanks!
Hi Jason -- this is truly a great product -- and becaue of our Urban Growth Boundary -- there are lots of fairly close to the city properties that qualify for the program.
Sardi - a great comprehensive glance at usda rural development. We have a lot of opportunity around here for these loans, in the surrounding counties.
Gerry - My bad, man. I totally forgot. I owe you one:)
Greg - "28 years in this business and still learning." Is that not the beauty of this business?
Alexsandra - That's a good point and something a lot of folks don't consider and/or know.
Saunders - Thanks, my friend. If your lenders there aren't offering these, make sure they get on the ball and know what they are doing.
I am suprised there are not more people taking advantage of the USDA loan. It seems like it gets much less press than the FHA loan.
Bill - Me too. FHA may be the "soup du jour" these days, but I think the USDA Loan is the "diamond in the rough."
I have one home that this loan works for and I've been advertising the heck out of it! I'm glad to see it is availble near you as well as it really is a great loan. Thank you for the nudge the other day with the post, I'm still not sure it was the wisest post I've ever posted, but as you know I can't be dishonest if someone asks! Thanks again my friend.
This is great information. Many parts of Bucks county qualify for this type of loan.