A NEW RECORD! I absolutely love a challenge. But this one will most likely be the standing record for some time. I am one of the few who tout what I believe to be the most phenomenal first time homebuyer program available, the USDA Rural Development Home Loan Program. This program allows a first time homebuyer to purchase a home with 100% financing. And in this case, just 0.72 cents!
I know what you are thinking….this guy is full of crap! There is no way that someone bought a house for just 0.72 cents. Oh, but there is. You see, this first-time homebuyer program allows the borrower to finance 100% of the sales price of the property. In addition, they allow the seller, or another interested party, to credit the buyer up to 6% of the sale price for closing costs, not to exceed the amount of closing costs.
As you will see in this photo, the borrower put down a $1000 escrow deposit at the time of the agreement of sale. The agent, moi, was able to negotiate an acceptable sale price and seller assist to cover the buyer’s closing costs. Therefore, the buyer received all of his escrow deposit back at closing, less .72 cents.
So what is the catch? Well, there are a few, but most borrowers are able to meet the criteria. First, there is a funding fee of 2%. “But you said this was 100% financing. How can that be if they charge you 2% of the mortgage amount?” Glad you asked. The 2% funding fee is financed ON TOP of the mortgage amount, with no need for the home to appraise higher. For instance, let’s say the sale price is $100,000. The funding fee would be $2,000, and the mortgage amount would be $102,000. So this program is actually, 102% financing!!
What are some of the other criteria? Income. Your gross monthly income must be less than 115% of the median income for the county you are looking in, for 1-4 members of the household. The income limits may increase with more members living in the home. Check to see if your income qualifies you for this program by clicking here. In addition, the home that you are looking to purchase must be located in what the USDA refers to as a “rural area”. To see a map of eligible areas, click here.
So what is your first step? The first step to buying a home with no money down would be to contact me to make sure that you fit the minimum criteria for the program. Even if you do not think you can, there may be a workaround to make it happen. From there, you will want to get a FREE pre-approval for financing. Then, we can go shopping!
So what are you waiting for? Just look at some of the homes that could be yours below and let’s get started!