BENEFITS OF THE USDA RD PROGRAM:

• Provides 100% loan-to-value financing for existing homes or new construction based on the appraised value.
• Low, Government Insured Rates.
•  Available to low and moderate-income households.
• No requirement to be a "first-time" home buyer.
• Less up-front cash-to-close requirements for this program than for conventionally insured or FHA loans.
• Up to 6% Seller concessions for one-time closing costs and prepaids.
• No monthly mortgage insurance required. One-time guarantee fee, payable to Rural Development (RD) at closing, which may be financed above the appraised value, as follows:
  • Purchases -3.50% of loan amount
  • Refinances - 1.00% of loan amount (only loans that are currently Rural Development loans can be refinanced with this program). 
• Fully amortized 30-year fixed-rate loans.
• No penalty for early pre-payment of loan.
• 2/1 Temporary Buydown available.
• No maximum loan limit. Loan limits are dictated by the applicant's income with respect to program eligibility and loan repayment ability.
• No monthly Mortgage Insurance (MI) 
  
• Maximum loan amount is the appraised value plus a one time guarantee fee of 3.5% (up to 103.5% loan to value)
  
• No cash contribution or cash reserves required of the applicant (no down payment required).

The process.The process of buying a home may seem complicated when you've never done it before and even if this is not your first time you might think it will be even more complicated when you get involved with a government agency. Well, buying a home with an USDA RD loan is really no different than buying a home with any other loan except it is easier to qualify, does not require any down payment and you don't have to have perfect credit.

Figure out how much you can afford - get prequalified.

What you can afford depends on your income, credit rating, current monthly expenses, loan amount and the interest rate. You should remember that prequalification (an informal estimate of how much you might borrow) is just to give you a preliminary idea of what you can afford, and to identify any major problems that you will want to fix. It's not a guarantee that you will be approved for a loan but you will want to get pre-qualified to avoid any surprises.With just a few minutes of your time, one of our USDA RD loan specialists can determine that amount for you. Call or email us...we are here to help. 

Shop for a home.

You may already have a general idea of where you'd like to live based on where you're living now, where you grew up, where you have friends or family or where you work. One of our USDA RD specialists can help determine what addresses or areas qualify for USDA RD financing. A local real estate agent can then help you find homes in that area. If you're not sure, or you need help in comparing the homes you see, a real estate agent is your best resource. If you are not working with an agent and would like us to help you find one that works with buyers, we would be happy to help.

Make an offer.

Discuss the process with your real estate agent. If the seller does not accept your offer and makes a counter offer (rejects all or part of your offer), you may need to bargain until you both agree to the terms of the sale.

Buying a home is one of the most important purchases you will make in your life, so protect yourself by making sure that the home you want to buy is in good condition. If you have any doubts about the homes soundness, you may want to get a home inspection. This is an evaluation of a home's condition by a trained expert. During a home inspection, a qualified inspector takes an in-depth and fair look at the property you plan to buy. The inspector will:

• Evaluate the physical condition: the structure, construction and mechanical systems
• Find and list items that should be repaired or replaced
• Estimate the remaining useful life of major systems (such as electrical, plumbing, heating, air conditioning), equipment, structure and finishes

The home inspector does not estimate the value of the house.

After the inspection is complete, you will receive a written report of the home inspector's findings, usually within five to seven days.

Home inspections are not appraisals. A property appraisal provides an estimate of a property's market value. Lenders require appraisals on properties before loan approval because they do not want to loan more than the property is worth. Appraisals benefit lenders; home inspections benefit buyers. The cost of the inspection is generally paid for by the buyer. USDA requires lenders to obtain appraisals of properties that are backing USDA insured loans. Appraisals are generally paid for by the buyer but may be negotiated as part of the Seller's concessions.

Applying for your USDA RD loan.

One of our USDA RD loan officer specialists will help you complete a loan application and have you sign a several forms authorizing us to verify (check on) your employment, income and savings. Using that information, we can then begin the loan approval process. We will also order the appraisal to substantiate the value of the property. 

Sign the Closing Documents.

You're finally ready to go to "settlement" or "closing";now that wasn't so bad was it? One of our USDA loan specialists will be available to assist you with questions you might have along with the title company's or attorney's closing agent, but be sure to read everything before you sign. Remember, it is ultimately you that will be responsible for repayment of the loan! 

That's it...enjoy your new home.