Similar to a VA loan’s characteristics, without the credentials. If you don’t mind living a little off the beaten path, a USDA property may be the answer. These loans are government backed and for rural properties, in areas that have been targeted for growth. Some significant advantages to these loans:
- 0% down payment
- No PMI
- Lower FICO scores are OK
Where to Find Section 502, USDA Properties
Contact Realtors in less developed areas of the state you wish to live in, and ask for a Realtor who knows the area, that can show you USDA properties. You can also utilize this USDA Eligibility Site, where you can enter a specific address for determination or just search the map to review general eligible areas.
What does this program do?
The Section 502 Guaranteed Loan Program assists approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may purchase, build, rehabilitate, improve or relocate a dwelling in an eligible rural area with 100% financing. The program provides a 90% loan note guarantee to approved lenders in order to reduce the risk of extending 100% loans to eligible rural home buyers – so no money down for those who qualify!
Who may apply for this program?
- Meet income-eligibility (cannot exceed 115% of median household income)
- Agree to personally occupy the dwelling as their primary residence
- Be a U.S. Citizen, U.S. non-citizen national or Qualified Alien
Why does Rural Development do this?
This program helps lenders work with low- and moderate-income households living in rural areas to make homeownership a reality. Providing affordable home ownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.