Yes, that is true! In fact, you are also able to roll in your closing costs as well. Below is a list of frequently asked questions:
TEXAS USDA FAQ - QUESTIONS AND ANSWERSWhy haven’t I heard much about USDA rural development loans?For the last few years there have been other mortgage programs that were popular and offered zero down payment and easy qualification. There was less use for the USDA program during those times. Now mortgage lending programs are much tighter and USDA RD is one of the few remaining programs with 100% financing and very favorable terms.How much money will I need to close?Every transaction is different. You will usually need to pay $300 to $400 for an appraisal before closing. You can ask the seller to pay all other closing costs as long as that is not more than 6% of the selling price. You may also roll your closing costs into your USDA loan.Will the seller usually agree to pay my closing costs?This is very common. It depends on the real estate market in your area and how motivated the seller is. Note that the appraisal will need to be equal or greater than the selling price for the closing cost seller contribution to work.How large of a mortgage do I qualify for?Usually the monthly payment should not be more than 29% of your gross monthly income. How good does my credit need to be?If your credit score is above 620 you will have a very good chance of qualifying. You may still qualify with a lower score if your credit is reasonably good. You should not have more than 1 payment that was 30 days late in the last year. What if I have NO credit in the credit bureaus?You may still be ably to qualify using references for things like utility payments, rental history, monthly auto insurance, and other payment records.Is private mortgage insurance required?No, there is a one time 2% USDA guarantee fee. In most cases you will be able to add this to your loan if you don’t want to pay the fee upfront.How does this program compare to a FHA mortgage?In most cases the USDA mortgage will be better than FHA if you qualify. USDA is 0% down and FHA is 3% or more down. Also FHA charges an extra ½ % fee added to your payment and USDA doesn’t. The rate is usually similar or better with USDA.What if I don’t qualify for a Texas USDA rural development mortgage?It's best to consult with a loan specialist about your loan options. In most cases USDA is a great way to acquire your new home with no money out of your pocket.
How long does it usually take to close a rural mortgage?This can vary, three weeks is typical.If I am ready to get started, what is the first step?Visit USDA Rural housing development loans to start the process.
The Texas USDA Rural Development home loan program was designed to provide affordable housing for residents in rural areas. In many cases this is the best mortgage for buyers in rural areas. Here are some of the USDA RD program features:
Recently the mortgage industry has tightened rules so that even borrowers with stellar credit need a good down payment. The USDA program and the VA program are the two main programs that allow 100% financing.
Here are some of the key requirements to qualify for the Texas USDA mortgage program:
Tony Cussimanio is a mortgage banker/broker in Austin Texas and can provide you details on USDA, VA & FHA loans.
He can be reached by phone at: 512-680-9906 or email at: tonyc@austin.rr.com
Visit our Texas mortgage down payment assistance site - Down Payment Assistance Austin
This is a great program that many people don't know about! Texas residents can get more information at Texas USDA Rural Development home loan site.
To locate property eligibility visit the following link.
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
In 2007 HUD tried to eliminate the use of DPA. Organizationssuch as Ameridream and Nehemiah with some congressional and grassroots help managed to stop HUD then. HoweverPresident Bush signed into law legislation (H.R. 3321) that contained a provision to eliminate charitable down payment assistance which becomes effective October 1, 2008.One day later, following the President’s signing H.R. 3321, Congress introduced bipartisan legislation H.R.6694 which would reauthorize and reform charitable DPA. H.R. 6694 has until September 30th, 2008 to be signed or the ban on DPA becomes permanent.
What difference does DPA make? Approximately 40% of all FHA purchases use DPA. Since the 2007 court victory against HUD, 40,000 homebuyers became homeowners. That’s 40,000 more homes that sold since the end of 2007. In other words 40,000 fewer homes are sitting on the market waiting to be sold. According to Nehemiah Corporation of America, As a result of DPA being eliminated on October 1st 2008, “50,000 hard-working, credit-worthy families will be denied the American dream of homeownership in that month alone.”
There are other DPA programs still available to buyers. However, all "seller assisted programs" are suspended October 1st. More information on USDA and non-seller DPA programs can be found at www.texashousingassistance.org
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