Are you concerned that your dream of owning a home isn’t quite within reach?
One of the most attractive home loan programs available just became more affordable than ever.
A great deal for home buyers in qualifying rural areas just got even better. A government-backed loan program that features low interest rates and no down payments is becoming more affordable than ever. The U.S. Department of Agriculture’s Rural Housing Service (USDA) has slashed fees for its Single-Family Housing Loan Guarantee Program. The reduced fees begin Oct. 1, 2016.
Thanks to the reduced USDA fees, borrowers will pay significantly less for their loans. The fee reductions include the following cuts:
- Upfront guarantee fee ─ reduced to 1 percent of the loan amount
- Mortgage insurance ─ cut from 0.50 percent to 0.35 percent of the unpaid principal balance
According to the USDA, it was able to cut the fees because delinquencies and foreclosures in the program are at “historic lows.”
These reduced fees make the USDA loan one of the most affordable home loans available. The only loan program with lower fees is the VA home loan, which is available exclusively to veterans.
The USDA loan program is especially popular with first-time home buyers because it provides 100 percent financing, meaning no down payment is required. In addition, the loan offers lower monthly mortgage insurance fees than FHA loans.
Due to the zero down payment, many potential home buyers assume that a high credit score is needed to qualify for the USDA loan. However, the program’s strong government backing allows lenders to approve mortgages that wouldn’t qualify for other programs. Applicants with credits scores as low as 640 are eligible for the USDA loan.
If the reduced fees and zero down terms offered by the USDA loan sound like what you’ve been looking for, an Alliance Home Loans expert can help you determine if it’s the right mortgage program for you.
Want to know more about this more-affordable-than-ever loan program? Contact us today.