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    Email: Todd.Frank@BankofTexas.com

  • USDA

  • USDA Home Loans Reap Rewards in Rural Areas

    The United States Department of Agriculture (USDA) home loan guarantee promises 100% financing to home buyers with limited financial options in USDA designated rural areas – including eligible small towns, suburbs and exurbs. This is the rare loan where you can finance the whole thing with no need to make a down payment.

    The program does not directly lend money to the home buyer. Instead, it gives a 90% guarantee to the lender in order to encourage an approval. This guarantee helps borrowers with low or moderate household incomes, low credit scores or a thin credit history.

    Eligible borrowers can receive the following benefits from their government-insured loan:

    • 102% financing (loan value plus 2% loan guarantee fee)
    • 30-year fixed rate
    • Affordable interest rates
    • Self-employed income accepted
    • No limit except affordability
    • No mortgage insurance required
    • No reserves required

    USDA Eligibility

    To take advantage of this valuable opportunity, the home buyer must meet eligibility requirements based on income, location, property size and other factors. The income of the borrower can be up to 115% of the area’s median income. The program has no minimum credit score, although the lender might, and the chances of approval get better as the scores get higher.

    The property must be a primary residence in a USDA designated rural area. While this includes traditionally rural areas, it also includes some small towns, suburbs and exurbs in eligible counties.

    To learn more about the USDA home loan guaranty program please contact us and ask how you might be able to use this kind of home loan.

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