Funding for USDA 100% financing ran out a few months ago. But fear not, it’s back!
But before we continue, I must warn you. Please, whatever you do, if you are considering buying a home with no money down, be very very careful. All too often these days I find myself talking to someone who needs to sell a home and owes more on it than it’s worth. Not a good position to find yourself in. Seriously, don’t do this unless you have really thought through how long you will be in the home, your future ability to earn income, etc.
That being said, USDA 100% loans have their place. The best purpose for any no money down loan program is to get renters who are responsible with their finances, and do not have money right now for a down payment, into a home. Renting is just not a good long term solution. There are no tax advantages to renting and the monthly payments do not build equity. Houses are on sale right now, so if your debts are in good order and your income earning potential is solid, and you do not have the money for a traditional down payment, you might want to consider a USDA 100% home loan.
Here are a few things to remember about USDA 100% loans:
- There is a 3.5% USDA fee that can be rolled into the loan amount
- There is no monthly PMI
- USDA loans are only good for a primary residence
- USDA loans are income capped based on the county
- A minimum 620 credit score is required
- Only certain homes qualify for USDA loans, depending on location
Here is a link to the USDA website where you can check an address to see if the home qualifies as a candidate for a USDA loan.
If you think you could benefit from a USDA 100% loan, please contact me to discuss the details. No money down financing in today’s real estate environment can be very risky. You need to fully understand the risks.
