Wednesday, January 8, 2014

Do You Know Someone Who Wishes They Could Buy A Home, But Cant Afford To? Now People With Low Income Can Purchase With $0.00 Down.

Now People With Low Income Can Purchase With $0.00 Down.


Have you heard of USDA? Its not a grade of beef. It’s the home loan product that will help you or your friends purchase a home with $0.00 down only if they DID NOT serve in the military. There is a twist, typically you have to serve in the Armed Forces, like myself in order to obtain 100% financing, now you just need to find a home in a rural area and not make too much money.

Requirements are set by the county and state, there is not one rule that applies to all of California. The way to find out if you qualify is EZ, call (855) 955-SOEZ or click here and I can help you find out if the product is right for you and provide you.

Details

There are two types of USDA products, Direct and Guaranteed.

Direct

Purpose: Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

Eligibility: Applicants for direct loans from HCFP must have very low or low incomes. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to review area income limits for this program. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically 24 percent of an applicant's income. However, payment subsidy is available to applicants to enhance repayment ability. Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories.

Terms: Loans are for up to 33 years (38 for those with incomes below 60 percent of AMI and who cannot afford 33-year terms). The term is 30 years for manufactured homes. The promissory note interest rate is set by HCFP based on the Government’s cost of money. However, that interest rate is modified by payment assistance subsidy.

Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.

Online Application: APPLICATION FOR RURAL ASSISTANCE 

For more information about this program, or to file an application, contact the local Rural Development office in your area.

Guaranteed

Purpose: Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

Eligibility: Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program are here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.  In addition, applicants must have reasonable credit histories.

Terms: Loans are for 30 years.  The promissory note interest rate is set by the lender. There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.

Standards: Under the Section 502 program, housing must be modest in size, design, and cost.   Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.  Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.

Online Application: APPLICATION FOR RURAL ASSISTANCE 

For more information about this program, or to file an application, contact the local Rural Development office in your area.

By Michael Hansen