You may have heard that 100% home financing is no longer available except to veterans. For the most part, this is true. However, as a Realtor working with lenders and builders in many areas around Houston, I discovered a secret.  Well, it’s not really a secret…but a lot of people don’t know about it. Here it is: In certain areas and under certain circumstances, buyers can qualify for the USDA loan program which does not require a down payment or monthly mortgage insurance.

The United States Department of Agriculture developed this program to make home ownership possible for low and moderate income rural Americans. Under the USDA’s Loan Guarantee program, the USDA guarantees loans made by private sector lenders. An individual or family may borrow up to 100% of the appraised value of the home. Additionally, there is no monthly mortgage insurance required, a savings of $40 to $60 per month. Instead of monthly mortgage insurance, borrowers pay an up-front fee at closing, usually 2%, which may be rolled into the loan. The loans have a 30-year term and a fixed interest rate.

There are restrictions, however. The home must be in a rural area that is determined to be eligible, and the income of the borrower or borrowers must fall at or below the pre-determined limit for the area. Different areas have different income restrictions, so it is best to check with your lender to determine eligibility.

The borrowers must be credit-eligible, meaning their credit score must qualify for the loan. There are other qualifying factors that help determine if a USDA loan is right for you. You should check with your lender to find out if you are eligible for this program.

There are many areas around Houston that qualify for the USDA loan.  You can find an eligibility map on the USDA website: http://www.ers.usda.gov/data/loanlookup/.  Neighborhoods in the Pearland/Manvel/Rosharon area which are eligible for USDA loans include Southfork, Rodeo Palms and Sterling Lakes.

No one can predict how long this program will be available, so contact your lender today for more information. And then, let Realtor Rose King find a home for you in a USDA eligible area!

Rose King
United Texas Realtors
713-562-5888
Rose@RoseKingRealtor.com