Nashville Mortgage News- LOW to NO Down Options- USDA Loans

Nashville Mortgage News- LOW to NO Down Options in TN- USDA Loans

USDA Loans, or USDA Rural Development loans, are a legitimate 100% financing program, but as the name suggests, they are only for homes in rural-eligible areas.  The vast majority of TN counties are entirely rural-eligible, so any single-family home or approved condo in those counties would qualify.  For those 21 counties which are more “suburban,” you’ll have to check USDA’s website to see what specific areas of those counties are eligible.  You don’t need to be a first time buyer, but you’ll need at least a 620 credit score.  You’ll also have to meet the income requirements (can’t make too much money), and the home price cannot exceed the limit allowed for the county.  Interest rates are very good, but typically just a tad higher than conventional or FHA (after all, it’s a 100% loan!).  USDA loans are always 30 fixed terms.  Two huge benefits are that there is no monthly mortgage insurance  (PMI) and you can get a loan up to 100% of appraisal (rather than sales price), which means you can finance in closing costs if there is room, assuming the seller can’t or won’t.  Also, there is no limit on how much the seller can pay towards the buyer’s closing costs, which comes in handy on the smaller sized loans (sub $75k).  In other words, USDA loans can potentially make it easier on buyers to get in a rural-eligible home with little to nothing out of pocket.  This is an awesome program.

In the coming Nashville Mortgage News article, we’ll be hilighting the FHA program.