USDA 100% Home Financing
Locate the areas that are approved, Answers to your Questions and Apply for Financing.
As you read through the following information, think about whether this program is right for you. If so, give contact Network Funding, LP Mortgage Bank at 404.814.4634 or 800-772.1193 Press 706 and to speak to a USDA adviser. Our loan approval process is quick and in most cases we can approve you right on the phone.
More information on USDA Loans - Click here
1. Why choose a Rural Development Guarantee loan with Network Funding, LP ?
USDA Rural Development Guarantee (RDG) loans are the only true 100% percent financing loan you will find. Period. We require zero downpayment and no private mortgage insurance (PMI) - two costs associated even with FHA loans.
The USDA RDG loans are set for 30 years at a fixed rate, and there is no limit on the price you pay for the home. The only qualifying factor for the home itself is that it be situated within an approved USDA eligible area and that you can reasonable qualify for the loan with your income and credit. You can apply here
2. Can I Save Money by Using the USDA Rural Development Grant Program?
Yes. Take, for example, a loan for $100,000.00. By taking out a USDA Rural Development loan, the borrower saves $4,290.00 in the first 10 years over what they’d pay out on an FHA loan. Why? For one reason - USDA RD loans don’t have any monthly Mortgage Insurance requirement!
Sure, you pay a USDA Guarantee fee of 2 percent up front when you take out the loan, but that sure beats paying MI each month until you get your Loan to Value ratio down to 80 percent!
Remember, it is difficult to drop MI insurance, and lenders will not drop it from your monthly payment unless you ask them to. (I know, big shock.) Plus, the MI premium has to be calculated into the ratios. This is NOT an issue with the RD loan since MI is not required. You can apply for this program here.
3. Is the USDA Providing the Funds for These Loans?
No. Much like the FHA, the USDA Rural Development Single Family Housing Program functions as a backstop or safety net for mortgage lenders - in effect guaranteeing that they are protected in the event you default on your loan - up to 90 percent of the original loan amount.
For the finance geeks out there - things break out as follows:
- Losses up to but not exceeding 35 percent of the original loan amount are fully reimbursed.
- Any losses exceeding the 35 percent total are reimbursed at 85% of their total.
So, in effect - lenders are only left with the remaining 15 percent of “true exposure” on these loans, which is why you are able to benefit from such a great program!
This guarantee grants lenders a great protection against losses. The quality of this USDA guarantee is what allows lenders to easily sell the loans on the secondary market. As a result, they feel free to lend funds in cases where other nonparticipating lenders may not.
4. What Type of Credit Do I Need in Order to Qualify?
Typically, the good folks over at the USDA financing office like to see minimum credit scores at or very close to 620. Borrowers with credit scores as low as 580 may be approved; however, they may not have any of the following:
- Foreclosure in past 36 months.
- Bankruptcy discharged within 36 months.
- More than one 30 day late on consumer debts in past 12 -24 months.
- Accounts converted to collections within past 12 months.
- Tax liens or delinquent government debts (including student loans).
- Judgments outstanding in past 12 months.
- Outstanding collection accounts.
- Two or more late rent payments in past 12 months.
Note: Lenders are permitted to use a nontraditional credit report or verify your creditworthiness with other sources, such as: utility payment records; rental payments; insurance payments; child care payments; payments to local stores, payments on medical bills, etc. Network Funding, LP looks at theses credit scores and types on a case by case basis. Scores under 660 are subject to a 41% debt to income ratio which does hinder a larger loan amount then say a score over 660. You can apply for a USDA Loan here.
5. Are there Minimum and Maximum Loan Amounts Associated with USDA Rural Development Loans? There is NO minimum loan amount for the USDA Rural Development loan program. Network Funding, LP will only allow financing for a home that is worth $75,000 or more. Typically, borrowers are limited to the appraised value of the home plus the 2 percent Guarantee Fee. The great news here is that you may finance 100 percent of the purchase price of your home (102 percent if you are financing in the 2 percent Guarantee Fee).
Note: The Guarantee Fee is a fee charged by Rural Development. This fee is equal to 2 percent of the final loan amount and may be financed into the loan itself.
6. What Will Be Included in My Monthly Payment?
The monthly payment will include principal, interest and the monthly cost of real estate taxes and insurance. Your lender will provide an estimated payment for you. Click here to use one of our many calculators
7. How Are Closing Costs, Fees, etc. paid on the USDA Rural Development Loan?
These fees and other eligible costs - including some repair/rehab costs - may be rolled into the loan. Again, 100 percent means NO out of pocket expenses at closing!
8. What areas are considered eligible for the USDA Rural Development Loan Program?
Click here to Find out if your county is available for USDA Financing,
Click here for the income limitations for UDSA Loans
Offical site for USDA Loans
Find out within 5 minutes if you are eligible for a USDA Home Loan - Click here
9. Since I am a First time home buyer, can I still receive those $8,000 tax credits with a USDA Loan?
Yes you can!.
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