The USDA Home Loan Offers 100 No Money Down Financing

Dated: 10/28/2017

Views: 200

Oklahoma Rural Development Home Loans

The good news for home buyers in Oklahoma is that they have a great financing option available to them. The USDA Home Loan offers 100% no money down financing. Buyers can buy a home without having to come up with a down payment. Unless a buyer is a veteran there is no other 100% loan available. There are also many other benefits to the Rural Home Loan.

One of the many features that buyers are attracted to is the monthly mortgage insurance. USDA actually calls it a guarantee fee but it essentially functions the same way as MI. The fee USDA Loan program is partly funded from these fees. They have different fees which area the upfront and the annual fee. The upfront is 2.75%. While that may sound like a big number the thing to remember is that is actually added to the loan amount and is paid out over 30 years. The annual fee is .50% and is paid out monthly in the homeowner’s payment. This actually has a larger impact on the monthly payment. The good news is that the annual fee is still substantially less than other loans with mortgage insurance. For example the FHA loan uses a factor of .85%. This is a difference in a substantial amount of money each month.
Oklahoma USDA Home Loans with 100% FinancingThe credit standards of the Oklahoma USDA Home Loan is another point that attracts home buyers to the loan product. USDA Loans do not have a minimum credit score however most USDA Lenders have a score that they require. It is common to see lenders have their score requirements at 620+. Besides lower credits there are other favorable credit standards. The USDA Loan allows borrowers to only be 2 years removed from bankruptcy and 3 years from foreclosure. While there are trade line requirement’s borrowers can use alternative trade lines such as utility bills.
Another important feature of the Oklahoma USDA Loan is the seller paid closing costs. Home sellers can pay up to 6% of the sales price towards the buyers closing costs. For example on a transactions where the sales price is $150,000 the seller can up to $9,000 towards the buyers closing costs. In most all cases this is more than enough to cover all costs associated with the loan. With this buyers can literally get into a home with no money out of pocket with the USDA Loan. They have no down payment and can have all closing costs paid.

USDA Home Loan Eligibility Requirements

USDA Home Loan eligibility will be determined by your financial history, and the property you're choosing to buy. First, the property in question must be in a USDA defined rural area. USDA defined rural areas can change from state to state, but are typically defined as any property located in a rural area, open country, or an area with less than 25,000 residents. This means that even if a property is located on the outskirts of a major city, in some small suburban community, it may still be defined as USDA eligible. For more information on a USDA eligible property in your area, please contact your PRMI representative.

Secondly, your financial and credit history will be evaluated. You need to have an above average credit history with a minimum credit score of 620, and no outstanding debt payments in collections, and no foreclosures or bankruptcies in the past 3 years. You must have steady and reliable income and be able to prove that you can afford monthly mortgage payments, as well as any other bills and previous debts you may have incurred. You must be a U.S. citizen, and be within in the income limitations for that designated area.

USDA Home Loan Advantages:

  • No Down payment is required.

  • Flexible credit guidelines. (Minimum credit score 620)

  • Bankruptcy ok after 3 years

  • Foreclosure ok after 3 years

  • No maximum purchase price limit.

  • Closing costs can be financed in.

  • Competitive fixed 30-year rates.

  • Low monthly mortgage insurance

  • Can be used to purchase existing homes, new construction, or foreclosures

photo 
Barbara Leatherwood
REALTOR, eXp Realty OKC LLC888-560-3964 ext130 | 405-301-7824 | barbara.leatherwood@exprealty.com | www.YukonHomesGuide.com | www.OklahomaCityOkHomesHub.com | 101 Park Ave suite 1300A Oklahoma City, Ok 73101

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