USDA offers home loans with no down payment
Loan process begins with 7-day prequalification review
For residents who have dreamt of owning their own home, but didn't have the money for a down payment, that dream may become a reality.
USDA Rural Development is offering home loan financing options to Barry Countians -- with no down payment.
According to Madeleine Watson, Area Technician with the USDA, loan funds are available to assist very-low and low income households in purchasing a home.
"No down payment is usually required," Watson said. "The maximum loan amount is dependent on the applicant's repayment ability based on income and monthly debt obligations, but cannot exceed $216,840. With interest rates currently at 3 percent, the principal and interest payment would be only $598.50 on a $150,000 home, and some households might even qualify for payment assistance, reducing their monthly payment even further."
One stipulation is that the property must be located on a modest site in a rural area (typically found in towns with a population of 35,000 or less), and, except under special circumstances, the living area of the home cannot exceed 2,000 square feet.
A USDA Rural Development employee will inspect the house to see that it qualifies for the program, but the applicant must obtain an inspection from a qualified home inspector.
"If the seller is willing, they can make any required repairs, or, if not, we will order an appraisal as repaired, giving the appraiser the list of repairs that will be completed," Watson said. "The buyer will obtain bids for the repairs, which can be completed after the sale closes, so long as the house appraises at a sufficient value to loan the purchase price plus the amount needed for the repairs."
The interest rate of 3 percent is based on the current market, and is a fixed rate with a 33-year loan term.
The loan process begins with a prequalification review, which takes about three to seven days to complete, then, once an application is submitted, eligibility is typically determined within 30 days. The inspection, appraisal and closing process takes about six weeks.
"The process from start to finish depends in part on how quickly the full application is received and how quickly the applicant gets a house under contract once they are eligible," Watson said.
USDA Rural Development has offices throughout the United States. The Neosho office is a sub-area office of the Springfield area office, which serves the counties of Barry, Barton, Dade, Jasper, Lawrence, McDonald and Newton.
For more information about obtaining a loan, Watson may be reached by phone at 417-451-1007, Ext. 4, or by email at: firstname.lastname@example.org. More information may also be found at http://www.rd.usda.gov/mo.