Pecan Lakes 100% Financing
Many people, both single or married and young or old, find it most difficult to save the downpayment and closing cost required to purchase a new home. Well worry and delay no more. At Pecan Lakes a person or persons who meets USDA qualifications for income and credit criteria can finance a new home with $0 Down. No gimmicks, just a strong government housing program designed to develop Rural America with very attractive rates and no downpayment.
In Short
- NO Down Payment Required!
- NO Monthly Mortgage Insurance (PMI)!
- Generous Income Limits!
- Fixed Rates for 30 Years!
The United States Department of Agriculture offers a most attractive finance program through its Rural Housing program. All Pecan Lakes communities qualify for this special finance plan.
Loan Guarantee Program (Section 502)
Under the Guaranteed Loan program, the Housing and Community Facilities Programs guarantees loans made by private sector lenders. (A loan guarantee through HCFP means that, should the individual borrower default on the loan, HCFP will pay the private financier for the loan.) The individual buyer works with the local private lender and makes his or her payments to that lender.
Under the terms of the program, an individual or family may borrow up to 100% of the appraised value of the home, which eliminates the need for a down payment. Since a common barrier to owning a home for many low-income people is the lack of funds to make a down payment, the availability of the loan guarantees from HCFP makes the reality of owning a home available to a much larger percentage of Americans.
USDA Guaranteed Rural Housing Program Points
- 30 year term
- Fixed Interest rate
- 2% Guaranty fee
- Maximum loan amount is 102% of Appraised value
- Includes Guaranty fee
- Loan amount can include price, closing cost, prepaid items
- Buyer can not receive cash back
- Borrowers
- Must be employed and income must be verifiable
- Must be citizen or qualified alien
- Subject to maximum income limits
- Based on gross income
- 1-4 person family - $73,600
- 4-8 person family - $97,150
- Deductions available for children and elderly family members
- Rates can depend on credit scores (i.e. higher score = lower rate)
- 620 or higher FICO credit score = approval
- Can not own any other houses
- Closing costs
- Costs are in direct relation to the interest rates
- Origination fees and discount points - lowest rates
- No origination fees and no discount points - higher rate
- No closing costs - highest rate
- Seller can pay costs, up to 6% of the price
Fixed Rate Buydowns - 2/1 buy downs are available on USDA loans.
Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Eligibility
Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program can be found by county at the web address below: www.rurdev.usda.gov/rhs/sfh/
sfh%20guaranteed%20loan%20income%20limits.htm.Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.
Terms
USDA Loans are for 30 years. The promissory note interest rate is set by the lender. There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.
Standards
Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards.
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