Did You Know There Are Home Loans Available That Do Not Require a Down Payment?
Say Hello to the Zero Down USDA Home Loan.
You read that right, the United States Department of Agriculture is willing to guarantee your mortgage to offer a Zero Down USDA Home Loan to consumers.
But what’s the catch?
There is a catch… Well, sort of. You need to qualify based on not only your income, but also where the property is located. USDA has been helpful enough to provide a map as well as a calculator to determine if you’re eligible for the program.
Once you’ve determined you’re eligibility you’re off to the races. You’ll be maxed at a 29% front end debt-to-income ratio, meaning your housing payments (Principal, Interest, Taxes, Insurance, Applicable HOA) must not exceed 29% of your monthly income before taxes. This is lower than other traditional programs like Conventional, FHA, and VA home loans but offers a much better mortgage insurance rate.
Mortgage insurance rates for USDA home loans is around 0.35%. That’s a steep discount relative to FHA at 0.85% for a similar low-down program or 0.70-1.00% for conventional. Not only is the mortgage insurance cheap but the funding fee required is also cheap.
USDA’s funding fee is only 1.00%. That’s a steal relative to other funding fee/up-front mortgage insurance programs like FHA (1.75%) or VA (2.15%). In addition to a lower funding fee, it can be financed into the purchase price! That’s right! You can effectively buy a home at 101% loan-to-value.
The good news doesn’t stop there. If you’re one of the lucky few whose home purchase appraises higher than the Purchase and Sales contract states, you can potentially tap the extra equity to help pay closing costs! Cha-Ching! Talk about savings!
This deal isn’t just for high credit individuals either. We have USDA home loan applicants as low as 620 being approved for mortgages in Washington State.
For a full mortgage consultation on how you can get access to a Zero Down USDA Home Loan, contact a Licensed Mortgage Loan Officer today!
This posting should be considered informational and not an solicitation for a credit transaction. Consumers should consult a licensed/registered loan officer for credit terms that apply.