USDA HOME LOANS UPDATED

The following srticle was contributed by Jasmine Reese...

Updates to the USDA Loan Program

Every year, the USDA Guaranteed Home Loan Program seems to undergo updates, making it a more realistic and borrower friendly program. Although many still do not take advantage of it, that could quickly change in the upcoming years.

The program has the lowest foreclosure rate of any of the conventional mortgage programs - even lower than the extremely popular Federal Housing Administration home loan.

Recent Changes

As of October 1st, the USDA now requires a fee of 0.3 percent of the unpaid principal balance of the loan. In addition, the funding fee decreased from 3.5% to 2%. These fees help the program to limit its reliance on taxpayer support. It should also further lessen the foreclosure rates, ensuring the program's ability to help more families buy a home in rural or suburban communities around the country.

Benefits

For such small changes, the loan boasts comparable benefits to the VA home loan program:

• Zero Dollars Down.
• No Cap on the Loan Amount.
• 100% Financing (or 102% with the guarantee fee).
• Credit Rating of 640 does not require a credit explanation.
• Sellers can contribute to closing costs.
• Flexible Mortgage Plans
• Renovation, Repairs and Upgrades Financed.
• Gift funds do not need a documented source.

With 800 offices nationwide, the USDA provides informational seminars on the loan and helpful tips on home buying.

Eligibility

Borrowers can take out a USDA home loan on new or existing homes in eligille areas only. Every zip code (from 34101 to 34120) in Naples, Florida is eligible. Borrowers can only work with USDA approved lenders. The potential homeowners must use the home for living, not money producing. The USDA offers business loans for ones interested in opening up a place of business in a rural area. Other requirements include:

• The applicant cannot have a foreclosure on record within the past three years.
• The applicant must also not have an upcoming bankrupcy discharge within a three-year time frame. 
• No 30-day late payments on credit bills within the past year.
• No accounts in collections within the past year.
• No tax liens.
• No missed or late rent payments within the past year.

Jasmine Reese writes content about USDA home loans and rural living for USDA loans.com, a company devoted to the development of rural and suburban areas.