No Money Down Financing: The USDA RD Loan

Despite the contraction of the secondary market, the USDA Rural Development  Loan still has 100% financing available for qualified applicants with moderate income in qualified areas.  The USDA RD Loan is a great program for rural and even some not-so-rural areas that qualify for the USDA program.  Even New Jersey still has many areas that qualify for the RD Loan.

There are property location restrictions for the USDA 100% financing program.   The first step is to determine if the area you are looking to purchase qualifies for an RD Loan. Check the USDA website’s eligibility map listed here:property eligibility .   Keep in mind, both the property (based on location) and the borrower(based on income) need to qualify to be eligible for consideration for this loan program.

The other qualification restriction is income based.  The income limits for the 100% Section 502 Guaranteed Rural Housing Program are here:  Property Eligibility According to the chart, a family of 2’s maximum possible annual income in Somerset County, NJ would be $71,900 for the Section 502 Guaranteed Rural Housing Program.  Income restrictions in other areas may vary, check the site for your particular location.

There is a one time financed fee similar to the VA funding fee for this program, and there are credit qualifications-620 minimum fico- and property qualifications as well.  Once you have determined your income and area qualify, consult with a loan officer well versed in USDA loans. 

All in all, this is a great program for 100% financing for those with moderate income in qualified areas.
 
Michael Byrne