There are two primary ways to buy a home with zero money down in 2014. The first is to be a military veteran and utilize the VA loan program. The second is to utilize the USDA Rural Housing Program.
The USDA loan program is designed to encourage people to spread out and buy a home out of the more densely populated urban areas. With the name “rural” in the title you might assume that this program only applies to homes way out in the country but that is not true. In many cases, suburbs just on the outskirts out of a city are eligible for the rural housing program. Click here to go to the USDA site and see a map of eligible areas.
Advantages of the USDA Rural Housing Home Purchase Program
- Requires no money down
- The monthly mortgage insurance is much smaller than FHA mortgage insurance
Requirements of the USDA Rural Housing Program
- Home must be in an eligible area
- Combined gross annual income of all household members normally must not exceed about $90,000
- Normally requires relatively good credit with few or no collections or similar blemishes on the credit history
- The USDA requires 2% funding fee up front that is rolled into the loan
In cases where the USDA rural housing program is an option, it is usually a more desirable programs than the FHA or Fannie/Freddie programs. It allows for a 30 year fixed loan with no money down and minimal mortgage insurance. Contact us in the form on our home purchase page for more guidance on getting qualified for a USDA rural housing home purchase loan.