3 Ways To Use Rural Development Loans To Build Homes In The Country

Many folks wonder how they can use Rural Development Loans to construct country homes. You can get funds to buy property on which to construct a place. You can receive dollars with which to build a new structure. Folks who have moderate incomes can buy existing rural dwellings.

If you find a plot of land on which you’d like to build a house, you can get money from the government to help you do so. Some people are able to afford bricks, boards, shingles, and other supplies with which to make a place. The government can give you the cash you need for the land to put it on.

People who do not want to buy property for their places can still construct them with Rural Development loans. Individuals who are very poor can build homes with federal funds. You can get enough money to craft a structure if you can provide some its labor.

The vast majority of individuals who get federal cash obtain existing structures in small communities, often in isolated spots. If your income is roughly comparable to that of your future neighbors, you could get a new home. You will be able to purchase a modest place of your own if your current living spot is unsuitable for you.

Lots of people are curious about how to construct country homes with Rural Development loans or more commonly known as USDA Loans. You can obtain one to purchase land for a home. You can get dollars for a brand new building. Individuals who have modest incomes may purchase existing isolated structures.

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Why Term Length Is Vital For Rural Development Loans

It is important to understand term lengths for Rural Development Loans. These contracts tend to have slightly longer repayment times than typical bank deals do. When you have lots of years in which to pay back your debt, each of your monthly sums will be very small.

Rural Development loans have very long terms. The average length of these contracts ranges from 33 to 38 years. A similar fixed rate mortgage from a typical bank would likely have a term of 30 years.

It is vital to comprehend the reason why the government gives you a long time to return its money. If you have a short contract, your principal payments will be high. As an example, if your home is worth $100,000 and you have a 15 year contract, your monthly sums might be $800. Conversely, an owner who has a 30 year deal on that same abode would only pay $400. If your repayment time is 33 years or longer, your sums will be even cheaper.

The government has designed Rural Development loans to be very long with the needs of its applicants in mind. Most of the people who get federal funds have very low incomes. Many of them could not afford high mortgage payments.

It is essential to comprehend term lengths for Rural Development Loans. These deals normally have longer repayment times than common bank deals do. When you have a long time to give back your money, all of your periodic sums will be tiny.

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The 3 Steps Homeless Folks Must Take To Get Rural Development Loans

If you do not have a place to call home, you can obtain one with money from the government. You already meet the first requirement by not having a stable shelter of your own. People who want Rural Development loans must also have steady incomes and decent credit scores.

Many homeless individuals do not know that there are federal housing dollars readily available to them. If you want to live in a country home, the government can help you obtain one. There are stringent guidelines for federal housing contracts. By not controlling your own space, you already meet one of them.

The second rule you should abide by is that you need to have a steady income. This does not necessarily mean that you must get a job. If you can arrange to receive regular sums of cash from any source, you will be able to satisfy the regular paycheck requirement for a federal loan.

The third guideline all applicants for Rural Development loans must meet is that they need good credit scores. Once you secure a regular income, you should get a credit card as soon as possible. When you charge small purchases and pay for them soon after, you will start to increase your monetary health.

If you have nowhere to dwell, you may get cash for a home from the government. The first guideline all applicants for Rural Development loans must meet is that they cannot possess stable structures. Folks who want federal housing cash must also get regular paychecks and maintain good financial histories.

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The Seven Advantages of the Rural Development Loan Program

The Rural Development Loan program may be one of the home buying communities best kept secrets. Despite the fact that this program requires no money down and offers fixed interest rates, many home buyers are simply not aware of their existence. Or, they are skeptical based on experience with past programs that offered similar “too good to be true advantages.”

The truth, however, is that the Rural Development loan program is unlike many of the past mortgage offers that contributed to the fall of the housing industry. Instead, this no money down program offers some real advantages designed to help both home buyers while building the nation. These advantages include:

  • Backed by the United States Government: The loans are backed and approved by the United Stated Department of Agriculture (USDA).
  • Building Communities: The loan program is designed to make home buying more affordable in the nation’s smaller communities .
  • No Money Down: The Rural Development Loan program is one of the last true no money down options left on the market.
  • Fixed Interest Rates: Your monthly mortgage payments will remain the same from month to month.
  • No Maximum Loan Amount: Finance the entire loan, up to 100% of the appraised value of the house.
  • Flexible Credit Guidelines: A history of bad credit does not automatically disqualify you from eligibility.
  • New and Existing Homes Qualify: Take out a Rural Development Loan regardless of whether the home is new or used.
In short, affordable, quality loans designed to help Americans realize the dream of home ownership, this is what the USDA Rural Development Loan program offers. If you are interested in learning more, contact the experts from the USDA Loan Agency.
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How Important is Credit Rating When Applying for a USDA Rural Development Loan?

Thinking about applying for a USDA Rural Development Loan, but worried that you may not qualify? Then a little insight into the eligibility requirements that the loan underwriter looks at may help to change your mind. Because these loans are designed to build the nation’s smaller communities while making home buying possible for people who could otherwise not afford it, the criteria may not be as strict as you first suspect.

Credit Rating:  Obviously credit rating plays an important element in determining your ability to meet your payments on time. However, a subpar credit rating does not automatically disqualify you from a USDA Loan.  When the underwriter examines your credit report, what they are looking for is a history of paying your bills on time. So even if you have a less than stellar credit rating, you may still qualify as long as you have reestablished a history making payments on time over the last twelve months.

Credit scores to be aware of include:

  • 720 or higher: Having a credit rating of 720 or higher is considered excellent
  • 620-720: Most lenders are looking for borrowers with a credit rating of 620 or higher
  • Less than 620: Remember, a subpar credit rating may not automatically disqualify you from eligibility. The experts at the USDA Loan Agency have worked with a number of home buyers to get them qualified.

Credit History: While the USDA Loan Program was designed to help home buyers with a limited credit history, some lenders may expect you to have established some credit history before they will offer a loan.

When examining your credit history, the lender will often look at:

  • Number of credit lines:  Having established a minimum of three previous credit lines can help improve your chances of qualifying
  •  Age of credit lines: Lines of credit that have been established and have remained in good standing for twelve months are considered ideal.
Remember, lack of credit history does not automatically disqualify you. Many homebuyers with only a minimal credit history can still qualify. So for this reason, you should never assume that you are not USDA Loan eligible. To learn more about Rural Development Loans, contact the experts from the USDA Loan Agency
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USDA Rural Development Loans and the Agricultural Dilemma

One of the biggest hurdles for the USDA Rural Development Loan Program to overcome is the misnomer that these loans have something to do with farming. The problem being that prospective home buyers see the word “USDA” attached to the program, and they immediately begin to make a connection between the program and agriculture.

Unfortunately, once that connection is made, the next logical assumption is that these loans are only for buyers looking to purchase farmland.

Of course nothing could be further from the truth.  The USDA Rural Development loan program has nothing to do with farmland – Instead, these loans are designed to help strengthen and grow the nation’s smaller communities.

The Problem with Emphasizing the Word “Rural”

An obvious answer to this dilemma is to make an attempt to place extra emphasis on the word “rural.” The logic being that by making homebuyers aware that these loans are available in rural communities – and not just for farmland – it will increase awareness about the program and encourage more people to consider them as a viable option.

Unfortunately this new approach is not without its own drawbacks. By placing the emphasis on “Rural,” homebuyers are likely to overlook a number of houses that qualify. Homes that lie just outside of major metropolitan areas are sometimes considered to be rural, but because of their close proximity to the city, they are often not given a second thought.

The good news is that the USDA Loan Agency has come up with a solution to help stem some of this confusion. Our “USDA Home Eligibility Finder” is designed to be a simple way for homebuyers to search for all the eligible homes in their surrounding area. All you have to do is fill in the zip, price range and radius, and the map will prepopulate the options for that area.

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Tips for the First Time Home Buyer: How to Determine if You are Ready to Buy

For the first time home buyer, the process of finding and buying a home can become overwhelming. With a continually evolving economy, mortgage and interest rates that are in flux, and bankers who have become misers when it comes to approving loan applications, the enormity of the task is comparable to climbing Mount Everest.

But as with any journey, it’s not impossible if you take it one step at a time. And at the USDA Loan Agency we are here to help you as you take your first steps toward realizing the dream of homeownership. Use the list below to determine when you should think about buying a home.

  • Take inventory of the homes for sale in your area:  The goal is to set a price range. By looking at the available homes in your area, you’ll know what the average home is going for. Websites like Zillow.com are great tools for this. At the USDA Loan Agency, we also offer a USDA Home Search Tool, which identifies homes for sale in rural areas.
  • Check your finances: Once you determine the average prices of homes in your area, it’s time to decide whether or not you can afford one of those homes. At USDA Loans, we offer a Mortgage Payment Calculator, which can be used to determine what your monthly payments will be.
  • How’s your credit: While loan option, such as the Rural Development Home Loan program, do not require you to have a perfect credit score, your credit does need to be in good standing. And, you’ll need to spend some time making sure that all your payments are up to date.
  • Talk to a realtor: Start talking to realtors in your area to get a better gauge of the real estate climate. This can help you determine if prices are at their lowest, or if it may be better to wait for them to continue to fall.
Remember, with options like the USDA Home Loan program available, the dream of homeownership can become a reality for everyone. But you never want to rush into your decision. By taking the time to determine when to buy a home, you are able to ensure that you are making a sound financial choice.
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Another Success: With a USDA Loan You are More than Just a Credit Score

One of the most exciting things about the USDA Loan program is that a less than perfect credit score does not have to stand in the way of your dream of home ownership. Maybe one of the biggest examples of this is a success story shared with us by one of our senior loan officers, Benjamin Bangs. Read on to learn how Benjamin was able to help someone with a less than stellar credit rating get into the house of his dreams.

”When the client first came to us, he had a less than perfect credit score, hovering right around 580. Fortunately, with the right guidance, we were able to offer him the expertise and tools to raise his credit score. In fact, by paying down some balances, paying off a few collection notices, and removing some inaccurate information from his credit report, he was able to raise his score to a respectable 620 – which is a very good number to be at when applying for a USDA Home Loan.

Another detractor was my client’s job history. He had recently switched jobs, and now was making significantly more than at his past job. Unfortunately, the underwriter was overlooking this income increase when it came time to approve the loan.

Even so, I knew that it was a “make-sense” decision to give him credit for his this new job, despite his previous lower job earnings. I remember going back and forth with the underwriter on the USDA Loan in regards to his income calculations – as the underwriter wanted to calculate his income at a much lower amount.  After about 100 emails and numerous phone conversations, I finally got the favorable response from the underwriter I was looking for (and possibly carpal tunnel syndrome from all the emails).

We closed my client’s loan about 2 weeks later.  I will always remember the picture he sent me of him and his family in front of their new house.  They were all smiling ear to ear.  That joy and satisfaction I got from receiving that picture is the reason that I am a loan officer at The USDA Loan Agency.”

The USDA Loan Agency is here to offer you the same level of service. Our certified USDA Loan agents will work with you and answer all your questions. Contact us today to get started!

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Rural Can Be Misleading: But These Loans are Not Just for Farming

The biggest hurdle the Rural Development Loan Program faces is the misnomer that they have something to do with agriculture. While it is true that these loans are backed by the United States Department of Agriculture, in reality that’s pretty much where any ties to agriculture come to end.

Instead, Rural Development Loans, (also known as USDA Loans) were created to help make the dream of home ownership a reality for everyone. And for people who have less than perfect credit scores or who have previously had trouble qualifying for a loan, this is exactly what the program is doing.

Even so, there a number of people who are unaware that they even qualify. Or, they assume that the property that they are thinking about buying does not qualify. They think that because these loans have something to do with Rural Development, the property must be located out in no man’s land.

But in truth, there are many great properties located near major metropolitan areas that qualify. For a property to be eligible, it must be located outside the city limits and a have population of less than 20,000. So while a home in the city might not qualify, a home on the outskirts might qualify.

This is where the USDA Loan Agency can help. We do not want you to miss out on your dream of homeownership, so please use our USDA Home Eligibility Finder to look for homes in your area.

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Another Success: Bankruptcy Not an Obstacle for this Customer

From Bankruptcy to home ownership in 24 months with a USDA Home loan

Next up in our  real life customer success series, we show you how one of our customers, just a little over 24 months following a chapter 7 bankruptcy, was able to move into their dream home – once again, all thanks to the USDA Home Loan program. Read on to learn how our senior loan officer, Katie Stover, had the opportunity to work with this customer in fulfilling their dream.

“When it comes to helping our customers in these tough economic times, you need the ability to think outside the box. Prospective home buyers have been hit hard in recent years, and as a loan officer in the mortgage industry, you want to help them overcome any past mistakes, so that their future is bright.

My client, “Jason Jefferson” is a great example of the lengths that we are willing to go in order to ensure that this comes true, regardless of how long that may take. When Jason came to us, he had filed for a Chapter 7 bankruptcy in his past. He also had a foreclosure included in that bankruptcy due to an Adjustable Rate Mortgage on his prior home.  The good news is that he did have a stable job and had started to rebuild his credit – which is why I felt he was a credible borrower and worth fighting for.

When I first pulled his credit it was slightly lower than is normally ideal for a USDA Home Loan. This was mainly due to his Chapter 7 Bankruptcy only being discharged 24 months prior. As a senior loan officer, I knew that we needed his score to be 640. I thoroughly reviewed his credit and found a few areas we could focus on to get his score up quickly. For instance, Jason was waiting on a tax refund and he used that tax refund to pay down two credit cards so that we could do a rapid re-score on his credit. After the re-score, his score jumped up to 650, which allowed me to submit his USDA Loan application for approval.

Of course all of this did not happen overnight. The re-score process took almost four weeks as we had to wait for the taxes to come in so he could pay his accounts down – and the whole thing took place two years after the bankruptcy had been discharged.  But in the end, Jason was able to qualify for the home of his dreams.”

The USDA Loan Agency is here to offer you the same level of service. Our certified USDA Loan agents will work with you and answer all your questions. Contact us today to get started!

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