1960's = 5.25%
June 1971, about 7.53%
June 1981, about 16.70%June 1990, about 10.16%
June 1998, about 6.99%
June 2000, about 8.29%
June 2005, about 5.58%
June 2009, about 5.52%
June 2010, about 4.75%
May 2013 about 3.54%
Want to buy a rural home?
Want Zero Down Payment? Then this mortgage loan is for you!
The US Department of Agriculture administers a means
tested mortgage loan guarantee program called the USDA Rural
development loan, or Rural Housing loan. This USDA Home Loan is
designed to provide low cost housing for those wanting to live in
rural areas, and is primarily for first time home buyers, although
you do not need to be a first time home buyer to use this program.
Prospective home buyers can apply with a MN or WI area USDA Home
Loan Lender like us, who will process, underwrite, and close your
You DO NOT need to go through a local
This is not a “farm” mortgage,
but a mortgage that is designed to support housing in rural
communities. Not all “rural” areas are in the middle of a cornfield.
Many areas of Minnesota and Wisconsin qualify. We can help you
determine if your area is eligible
Zero down payment - You can
finance 100% of the purchase price
Seller paid closing costs - You
can roll costs into the loan
Very cheap mortgage
insurance compared to other mortgage loans options
Homes more affordable, and
more people qualify because of low PMI
Good credit or better required
- Doesn't need to be perfect, but bad credit not OK.
Income Limits: The USDA loan in
MN, and WI does have income limits to qualify. The loan is a "means tested"
program, which states that you can't make too much money. There are allowable
income adjustments for minor children (family size), child care expenses,
and elderly family members. Most moderate to middle income families WILL
qualify. You can easily check income limits for your family size, state, and
county on the
USDA Loan income eligibility web site.
Rural Areas Only: Basically,
a rural area for the USDA loan is anything outside a major metropolitan
area. This may be closer to the big city than you think, so be sure to check
property eligibility map to make sure the area you with to buy a home
fits USDA guidelines.
Type of Home: The home must be on
a publicly maintained road, or in a development with private roads. It must be
a single family home (no duplexes), must be owner occupied (no investment
homes), and may not produce income. No business can operate on the
property. A hobby farm is OK, but agricultural land that is getting
farm income (from renting), or will be farmed is not OK.
Closing Costs: All mortgage loans
have closing costs.
Lender fees, appraisal, credit report, title company, state taxes, and more.
These need to be paid for by someone. The best way is for the buyer to pay
cash. But as most first time home buyers have limited funds, you are also allowed with
a USDA loan roll the closing costs into the loan with "seller paid closing
costs", or by slightly increasing the loans interest rate. Under those two
options, you are still paying for the closing costs, but you are essentially
paying over time, versus cash out of pocket today. How cool is that?
Unacceptable Items: If you have
any of the following items, you automatically do not qualify for the USDA
loan in MN or WI. You may qualify for other loans (like an
FHA loan), so be sure to
contact us for more information
on other loan options:
Poor Credit (middle credit score BELOW 640)
Delinquent Government Debt (back taxes, student loans)
More than 2 late mortgage or rent payments in the past 12
Any credit account turned into a collection account in the
past 12 months
Unpaid Tax Liens (must be paid off to buy)
Foreclosure less than 3-years old
Bankruptcy Chapter 7 less than 3-years old
Bankruptcy Chapter 13 less than 1-year old
You have more than 20% of the purchase price in the bank
(this does NOT include retirement accounts like a 401k)
DON'T QUALIFY FOR USDA? There are other loan possibilities. DON'T ASSUME you
can't qualify for something else. Call (651) 552-3681 to discuss
your personal situation. For example, with an
FHA loan, a
bankruptcy only needs to be two-years old, and we can offer loans
with a credit score of 620. We also offer
down payment assistance
loans, that require only as little as $1,000 of your own money.
If you are active military or a Veteran, a
VA Home Loan only
requires two-years past a foreclosure or a bankruptcy.
We hope this information is helpful. We
would be proud to help your home buying dreams come true with a zero down
payment USDA rural development loan.
today, have an answer tomorrow.
Tweets by Joe Metzler, Senior Loan Officer. Tweets are Joe's, not the