Rural Development or RD loans are great zero down payment loans
Income Limits and Geographical Restrictions Apply
— Check a specific address to see if it is eligible for an RD loan.
— No Sales Price or Loan Limits to worry about; loan limits are based on USDA income and repayment ability
— No down payment is required which means buyers need less upfront cash!
–Seller can pay all closing costs and prepaid expenses associated with a purchase but this needs to be negotiated into the contract and is limited to the lesser of actual expenses or 6% (whichever is less)
Qualifying for a Rural Development loan
— Minimum of 620 credit score required by Bookend Lending Corp for RD loans
–All borrowers are required to have a credit score
— File runs through GUS (RD’s “Guaranteed Underwriting System”) to determine if it is an “ACCEPT” or “REFER”
— Files with an “ACCEPT” finding generally are allowed to have a higher percentage of their income for housing.
–Files with a “REFER” finding are generally required to provide 12 months’ cancelled rent checks and possibly even additional references for things like utilities, car insurance and/or cell phone.
— Available for 1- unit (single family) owner occupied properties
— Not limited to first time home buyers but you cannot own any other real estate
–OK for condos that are either FHA approved condos, VA approved condos, or condos that are acceptable to Fannie Mae or Freddie Mac.
— upfront participation fee is just over 1% and monthly fee is collected too (loan amount X .35% / 12)
–RD can be combined with NH Housing Finance Authority using their “flex” option