Basics of Massachusetts USDA Guaranteed Home Loans
USDA purchase loans do not require a down payment, offer cheaper mortgage rates, and 100% financing. A USDA Guaranteed Home Loan is a home loan that is insured against default by the government. This helps lenders in being more open to lending to lower income families who may not be able to meet the requirements of other conventional mortgages.
The USDA Home Loan was created to help low to moderate income families in obtaining a home, sometimes even with no down payment.
In order to qualify for a USDA Guaranteed Home Loan there are several qualifications that a borrower must meet.
USDA loan guarantees are offered on a variety of government sponsored mortgage programs and enables mortgage lenders to provide USDA home loans to borrowers who aren’t able to get approved.
Reasons to Consider a USDA Purchase:
- Very competitive fixed interest rates.
- Zero money down allowing financing up to 100% of your home’s value.
- Affordable loan terms at 30 years.
USDA loans offer a competitive fixed rate. In fact, the USDA home loan program does not offer adjustable rate mortgages of any kind. So your monthly mortgage payments will never increase with a USDA home loan. The only fee associated with the USDA rural housing program is a small one-time funding fee. USDA housing loans allow you to put money towards paying off your mortgage each month rather than towards fees.
Massachusetts USDA Guaranteed Home Purchase Loans
The USDA home loan program allows responsible homeowners to refinance into a guaranteed loan. Both streamlined and non-streamlined refinance options are available through the USDA loan program.
For non-streamlined refinance, the existing loan’s principal and interest, as well as closing costs and lender fees may be included in the new loan.
In addition, an appraisal will be required for all non-streamlined loans. Streamlined loans offer the convenience of no appraisal, but require a home inspection to ensure that the property meets all HUD requirements.
This type of refinance must also be manually underwritten. The existing loan’s principal balance is refinanced, and any accrued interest, closing costs and lender fees cannot be included. Furthermore, this refinance option is only available for USDA Guaranteed Loans, not direct loans.
Massachusetts USDA Purchase Loan Quick Reference:
Great Interest Rates:
USDA loans are made even more affordable through very competitive fixed interest rates, ensuring your payments will not increase every month.
Zero Money Down:
A USDA loan is one of the few programs offered that allows you to finance 100% of your home’s value. That means no down payment of any kind!
Finance Your Closing Costs:
A USDA loan allows you to finance in your closing costs up to the appraised value. The USDA loan is one of the only mortgages on the market with his benefit.
Affordable Loan Terms:
USDA home loans also offer affordable 30 year terms.
The Guaranteed Loan Program, managed by the Housing and Community Facilities Programs (HCFP), provides a loan guarantee to a mortgage lender on loans that meet USDA loan guidelines. An individual looking to get approved for a USDA loan would work with a lender that is approved to offer these loans would make his or her payments to that lender after closing.
USDA Rural Development Loan Program Benefits
There is no down payment required for a USDA home loan and 100% of the home’s appraised value, plus the time funding fee can be financed through the USDA rural housing home loan. Meaning, you do not have to pay anything out of pocket when financing with a USDA home loan.
First Time Home Buyer Benefit
If you have not owned a home in 3 years prior to purchasing your new home, you may be able to qualify for a tax — a dollar-for-dollar return on your taxes! The government is now allowing this tax credit to be used to cover any closing costs as well.
Single Family Housing Loans and Grants
Single Family Housing Programs provide homeownership opportunities to low-and-moderate-income rural Americans through several loans and grant guarantee programs. The programs also make funding available to individuals to finance vital improvements necessary to make their homes decent, safe, and sanitary.
USDA Home Loan Requirements
For those that live in a qualifying suburban town (generally with a population less than 20,000), a USDA home loan may be your perfect loan option if purchasing a home. The government created the USDA loan program to encourage growth in our nation’s small communities, and today it remains the last real no money down loan in existence.
In order to qualify for a USDA rural home loan, you must meet the program’s requirements. The home MUST be in designated USDA rural area, and the borrower must not exceed the income limit set for that area.
Credit Score
No minimum credit score to qualify for a USDA rural development loan, but you must be able to show willingness and ability to keep up with show willingness and capability to repay mortgage obligations. A credit check indicating no more than one late payment in the past twelve months is generally accepted as indicating a willingness to repay. You must be able to verify income for the last two years. Keep in mind, some lenders may require a FICO credit score of at least a 620
Standard Debt-to-Income (DTI)
The standard Debt-to-Income ratios are usually 29/41 for USDA Home Purchase Loans. These ratios may be able to exceed with compensation factors. To be considered eligible for a USDA loan, your monthly housing costs (mortgage principal and interest, property taxes and insurance) must meet the specified percentage of your gross monthly income (29% ratio). You must also have enough income to pay your housing costs, along with any monthly debt (41% ratio).
Eligible Property Types
Keeping in mind, Even though Massachusetts USDA Mortgage guidelines require for owner-occupied (OO), condos, planned-unit developments, manufactured homes, and single-family residences are usually allowed.
Massachusetts USDA Guaranteed Home Purchase Loans
