Rural Economic Community Development Programs
Rural development is an agency of the U.S. department of Agriculture that guarantees 0 down payment conventional type mortgages. Because of the guaranty lenders require no down payment with this program. Additionally, if the appraised home value exceeds the sales price, some or all of the closing costs can be financed in the loan amount. The borrower must pay 1.75% Guaranty Fee to RD in lieu of monthly mortgage insurance.
While RD loans are very similar to conventional loans, some important distinctions are worth noting:
Income ceilings based on family size and Residence County apply, a borrower is ineligible if these limits are exceeded.
Debt to income ratio underwriting is very strict.
RD will only finance brand new double wide and site built homes, existing manufactured home are not eligible.
Eligible properties must lie outside of city limits or in targeted areas.
As mentioned above, the loan amount can exceed sales price by the amount the appraised value exceeds sales price.
Underwriting on RD loans tends to be fairly stringent regarding income and debt ratios but is fairly accommodative of other qualifying criteria. It is a good program for borrowers that have minimal cash assets with which to close.
North Pacific Financial
11925 SE Dorset Lane
Happy Valley, OR 97086
Cell: (503) 784-0299
Fax: (503) 926-9243
Doing business in the following states:
OR ML #2338
NMLS Branch ML #365143/1850
WA CLA#365143
