USDA – The ‘Sleeping Giant’ of No-Down-Payment Mortgages

By Mike Koebel, guest author

When you hear the term USDA in connection with a mortgage, you may automatically think that this is for a farm (or other rural/agricultural) loan. 

Actually, since 1949 the USDA (U.S. Department of Agriculture) guarantees loans under certain conditions for the purchase of a primary residence – and they guarantee them with -0- down-payment, and sometimes even include closing costs in the mortgage amount.

There are a couple of “catches” though – the home must be within certain geographic areas and the income of the borrower(s) must be within certain limits.  However, in Manatee County, the geographic area includes a large part of our county – essentially anything north of the Manatee River or east of the Braden River.  For more specifics, you can look up a property address by going to:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

The income limitation is also relatively generous - $75,200 for a family of 1-4, and $99,250 for families of 5 or more.  Also, that limitation allows for the deduction of daycare expenses and a $480 deduction per child.  Again, for more specifics, you can check the income limitation by going to:

http://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do      

Other qualifying requirements are very similar to FHA, and again a major difference is that currently there is no annual mortgage insurance cost.  You may have heard that at certain times of the year, USDA funding is exhausted and no new USDA loans can be closed/funded.  This year is an exception, in that the Obama administration has recently increased the USDA funding for 2011 and currently the agency has $11 billion to use between now and 9/30/11.

With today’s interest rates being at all-time lows, and with property prices being lower, there is no better time to take advantage of this “sleeping giant”.

Here's a link to a map of Manatee County areas that qualify for USDA loans:  USDA LOAN MAP

RIS Media article on USDA Loans

If you're thinking about buying a home, but have been on the fence about whether now is the right time for you and your family to make that move, consider USDA financing.  

Happy home hunting!

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More about guest author, Mike Koebel:

“Mortgage Mike,” of Home Lending Source, has more than 25 years experience helping his clients achieve their financial goals & dreams.  Mike has assisted nearly 2000 clients, resulting in funding $250 million in mortgages with a customer satisfaction rating of 95%+.

To learn more about USDA and other types of mortgage options: www.ReverseMortgageMike.com