It's no secret that it has been more and more difficult to get a loan these days. Several years ago, it was very common for home buyers to get 100% Financing. They would do this by either getting a loan with 100% financing, or it would be split up into 2 loans called an 80/20 loan. The 80 meant that the 1st loan was 80% of the balance, and the 20 was the remaining 20%. As guidelines have tightened up the No Money Down loans have all but disappeared.
One loan program that is not talked about much is through the US Department of Agriculture or USDA. The USDA Loan allows families or individuals who don't have a lot of money to put down, qualify for a home loan. This program is designed to help families with lower income qualify for a home. You can use this program to buy an existing home or build a new one. Most home buyers buy existing properties with this loan.
The USDA Loan offers many unique advantages over traditional loans:
- No monthly mortgage insurance (or PMI - Private Mortgage Insurance)
- No assets or reserves required (In Most Cases)
- 100% financing or No Money Down
- The Seller may be able to pay some or all of your closing costs.
Since the USDA Loan is generally aimed at low or very low income buyers, there are income limits you must meet before getting a USDA Mortgage. Buyers can earn at up to 80% of the median income of the area you are buying in. This figure can vary from state to state. It's necessary to check the requirements in your location before applying for a USDA loan to ensure that you do meet the guidelines.
Most USDA Rural Loans are made for 30 years although longer terms might be allowed. The interest rate for these loans is typical in line with the current market rate of other traditional loans. Although loans will only be made in Rural Development approved areas, you might be surprised what areas actually qualify. The bottom line is that it doesn't mean that you have to purchase a farm in order to qualify for a USDA mortgage.
USDA loans can be a big help to lower income buyers interested in getting into the real estate market.
By offering 102% financing, the USDA Rural Development Loan takes some of the financial strain off of marginally qualified buyers looking to purchase their first home.
If you feel that you might qualify for a USDA Loan please visit http://www.USDALoanPrograms.com
For access to one of the last remaining No Money Down USDA Loans, go to http://www.USDALoanPrograms.com
Article Source: http://EzineArticles.com/?expert=Jason_Aaron_Jerzewski
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