Guest Blogger, Stephen Hochhalter, of Sound Mortgage
USDA Loosens Income Limits on No-PMI Loans
Zero-down programs are few and far between these days, but one stalwart just got an upgrade!
USDA Guaranteed Rural Development loans offer 100% financing with no monthly Private Mortgage Insurance. Seriously, did you hear me? I said NO monthly PMI. While there are some geographic limitations on this program, if you have your eye on a piece of property that would qualify, you need to take notice.
Although income restrictions for this program are determined based on the number of people living in a household, these limits were loosened beginning April 20. As a result, more buyers may now qualify and be able to afford higher value homes under this program.
Previously, the income limitations were based on the exact number of people living in the home. For example, the limit for two people was different from the limit for one person; the limit for three people was different from the limit for two people, etc.
As of April 20, however, the household income limitations are grouped into two categories: 1-4 Person Households and 5-8 Person Households. This is great news!
It means that higher income earners with fewer people in the household may be more likely to qualify.
In non high-cost counties, where 1-4 people reside in a home, the income limit will now be $70,750. In homes where 5-8 people reside, the limit is $93,400. While these figures serve as a guide, there are certain formulas to arrive at these numbers where people can earn more and still qualify.
Now just because you see the word "rural" in the program name, it doesn't mean we're talking farmland here. No, you don't have to raise cattle or chickens to qualify. Rural generally is defined as areas that are not densely populated and have fewer neighborhoods – but you might be surprised at how many neighborhoods qualify. To check if a property qualifies, email me or click the link below.
Is my property eligible for USDA Guaranteed Rural Housing financing?
I'm very excited about what this can represent to your business. More buyers will have the ability to buy a home without a down payment. Also, when it comes to USDA Rural Housing loans, the seller can pay closing costs up to 6%. When you combine these benefits with the available tax credit of up to $8,000 for first time home buyers, helping more people get into the home of their dreams is suddenly a lot easier.
If you have questions about this update, give Wendy or myself a call. We can show you how waiting for the lowest price could really cost you more in the long run.
Sincerely,
Stephen Hochhalter
425.228.5300
Sound Mortgage
