Rural Development USDA Loans Available in Northwest Arkansas. Now with New Lower Upfront fees and Annual Fees starting October 1, 2016
Starting October 1, 2016 the new upfront MI fee is only 1.0% down from 2.75%. This loan program offers borrowers zero down payment for mortgage loans. Call us for information about property eligibility and income eligibility. If you are looking for information on the Rural Development USDA Loans you are in the right place. This special loan program can be referred to by a few different names. The loan product is called the USDA Loan or can also be referred to as the Guaranteed Home Loan. The main benefit of this loan is the ability for a borrower to acquire 100% financing. The only other option for 100% financing are VA Mortgages which is only available to qualified Veterans, so if you are not a veteran the RD loan is the only other 100% option out there.
What is a USDA Mortgage, and what makes this loan program better than other loan programs that offer a minimal down payment? USDA loans are fixed rate mortgages with 30 year amortizations, that provide for a consistant payment over the life of the loan, this gives the borrower security. USDA loans have a small monthly MI payment (.4% of the loan total). Mortgage insurance payments add additional cost to the borrower in making monthly payments; therefore, we must note the monthly insurance rate is .35% compared to .85% for FHA loan, this gives the RD loan a huge advantage. The borrower that wants to Refinance the USDA loan will only allow those borrowers who are in a current USDA mortgage to be refinanced.
Are there any downsides to this mortgage? None financially, but these loans need to qualify by location (this can be found the the USDA website or you are welcome to call us for assistance), and there are income limits. For example a family of four cannot have a household income of more than $74,500 annually in Arkansas. Most towns that qualify are on the outskirts of larger cities and with less than 30,000 residents.
USDA Loan Program Bullet Points
- 100% Financing
- Credit Scores above 640 qualify
- Credit Scores between 600 & 640 are considered on a case by case basis
- 1.00% UPMI (New as of 10/1/2016 huge savings)
- .35% Annual MI ($35 monthly on a $100,000 loan)
- Household Income Max for a family of four $74,500
- The property’s location must fall within a qualifying location