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USDA loan

Found a house for 59,000 and it is eligible for USDA loan. I have read it is 100% financing. Can closing costs and etc be rolled into loan? Also, the house needs to be remodled, can costs of that be rolled into loan? Can we end up not having to pay anything and still move into the home?
  • July 20 2014 - Gaston
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Answers (2)

Technically the USDA will allow for Purchase/Rehabs but I haven't found any Lender or Bank that will allow it. As a Guaranteed Lender, we can allow the borrower to finance any lender required repairs, closing costs, etc, into the loan subject to the appraisal as long as those repairs are completed prior to closing. So for example if the property needs $3,000.00 in repairs and the seller has agreed to pay for them and pay the borrower's closing costs of $4,000.00 out of the sale proceeds, as long as the appraisal comes in then this is permitted. The USDA will also allow you to finance up to 100% of the appraised value then stack on your 2% USDA Loan Guarantee Fee on top of that. So for those borrowers who can get a good deal out there, even if the seller does not agree to cover your closing cost or repairs, if the appraisal comes in higher than the sales price, then that can be added to the mix. Hope this helps. Let me know if you have additional questions.
  • July 21 2014
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You can potentially include 2% of the closing costs into the loan provided the home appraises for that amount or more above your agreed purchase price.  If the home needs remodeling, those costs would not be eligible for including in the mortgage. 

  • July 21 2014
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