PHONE: (802) 828-6016
FAX: (802) 828-6090
FINANCING FOR HOUSING LOANS AVAILABLE
WITH NO DOWNPAYMENT
Many "would be" homeowners are held back because of the amount of money needed to enter the home mortgage financing market. Between downpayments, closing costs, pre-paids, points, reserves and countless other costs, the potential buyer is left with the idea that their only option is renting.
Buyers often find themselves in a position where, for the amount of monthly rent they are paying, they could afford a mortgage payment, but can’t obtain such financing because they don’t have a downpayment. Their credit is good, they have steady and dependable sources of income, and often have a small amount of savings, but only enough to cover their closing costs, not a downpayment.
Through the US Department of Agriculture, Rural Development, these potential buyers now have available a source of mortgage financing where no downpayment is required. 30 year, fixed-rate mortgages, guaranteed by the US Government, are available state-wide through local Banks. Applicants who can show repayment for these market rate loans at their local bank are allowed to borrow up to 100% of the purchase price of a home, using USDA/Rural Development as their mortgage guarantor. This means that a Bank can make a "no downpayment loan", and have their risk covered by the US Government.
The guarantee is not a cure for borrowers who have credit history problems, but it goes a long way toward putting families into homes of their own. There are maximum income limits for the program and applicants must meet certain debt-to-income ratios. There are also maximum loan amounts which vary by county. Income limits vary throughout the State . In some areas, income levels are as high as $51,000 to $62,000. The typical buyer using this program has an income in the $28,000 to $37,000 range, has very little outside debt and obtains a loan of $75,000. They had typically been paying a comparable housing cost of $550 per month, plus utilities.
Interested applicants should contact their local Bank or Mortgage Company for more information about the program.