USDA, well known for grading beef, also insures home loans. The mortgage program is known as the USDA Rural Development Guaranteed Loan.
So what makes the USDA mortgage special? For starters, it is a true 100% (no down payment) mortgage. Whats the catch? No catch, but below is a list of some of the important things to note with a USDA mortgage:
- 100% Financing. Actually, you can finance your closing costs if the home appraises for more than you are purchasing it for.
- The property you are purchasing must be in an eligible area (see below for list of Ohio counties that are entirely eligible). You can view a map of the United States, and zoom in to see what areas are eligible here USDA Eligibility Map (click Single Family Housing underneath the Property Eligibility Heading, then Accept on the disclaimer). Make sure you give the map enough time to load though.
- The total household income (including everyone, not just those on the mortgage) must be under the income limits used by USDA (OHIO INCOME LIMITS HERE)
- Refinance – must have a USDA loan in order to refinance with a USDA loan
- Purchases are now subject to a 2% Funding Fee (treated the same was as FHA’s Up Front Mortgage Insurance Premium), and Monthly Mortgage Insurance of 0.30%
- Refinances are subject to a 1.5% Funding Fee and Monthly Mortgage Insurance of 0.30%
- Loan Process – same as other mortgages, but must also go to the local USDA office for approval.
All in all, the USDA Rural Development Guaranteed Loan is a great option for home buyers that don’t have 20% to put down.
More info can be found on USDA’s Eligibility Website found here: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
List of Ohio Counties that contain few or no ineligible areas (most of the entire county is Eligible for USDA Rural Development Loan)
Adams County
Auglaize County
Belmont County
Brown County
Carroll County
Champaign County
Clinton County
Columbiana County
Coshocton County
Crawford County
Darke County
Defiance County
Fayette County
Fulton County
Gallia County
Geauga County
Guernsey County
Hardin County
Harrison County
Henry County
Highland County
Hocking County
Holmes County
Huron County
Jackson County
Knox County
Logan County
Madison County
Meigs County
Mercer County
Monroe County
Morgan County
Morrow County
Noble County
Ottawa County
Paulding County
Perry County
Pike County
Preble County
Putnam County
Sandusky County
Seneca County
Shelby County
Van Wert County
Vinton County
Williams County
Wyandot County
