What is a Rural Development Mortgage?
Rural Development or also known as USDA Mortgage is a conventional mortgage that offers 100% financing. It can be used for the purchase of a new or existing single-family dwelling. Home must be owner occupied. Mortgage insurance is prohibited. No down payment required. 30 year loan term, fixed interest rate. USDA has a one time 2.0% guarantee fee, which is financed into the mortgage. USDA does not limit seller/builder contributions, however if in excess of 6% they will require an appraisal review. Eligible Areas: USDA loans can be made in rural areas, which in clued open country and communities up to 10,000 population, plus communities that are not a part of a Metropolitan Statistical Area with populations up to 20,000. To find out if a property is eligible you can visit http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do Applicant Qualifications: Minimum 620 credit score. USDA mortgages have household income requirements and cannot exceed the moderate-income level. Contact a local lender to find out the counties median income. For Example: Tulsa County 1 person = income cannot exceed $40,300 2 person = $46,100 3 person = $51,800 4 person = $57.600 5 person= $62,200
Property Characteristics: Property must be contiguous to and have direct access to a hard surfaced or all-weather road; gravel is ok. The site value cannot exceed 30% of value. Generally 10 acres is the maximum acreage allowed. If property has an in-ground swimming pool a waiver is required from Rural Development and the swimming pool cannot be included in value of the property.
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