Wednesday, August 3, 2011

Rural Buyers Can Get No-Down Payment Loans

Total Mortgage Services, a national mortgage lender, is offering rural home buyers 100 percent financing or closing cost assistance.

Through its new Guaranteed Rural Housing Loan Program, insured by the U.S. Department of Agriculture, the lender will offer low- and moderate-income residents living in rural areas (usually defined by a population of 10,000 or less or, in some cases, 20,000 or less) several affordable housing finance options:
  • No down payment required.
  • Closing costs can come from any source, including gifts.
  • Competitive 30-year fixed rates.
  • No monthly mortgage insurance premiums.
Borrowers can obtain a loan to purchase a new or existing home that is located in a designated rural area.

“The USDA home loan program is one of the most compelling mortgage products in today’s challenging mortgage marketplace and offers real solutions for rural borrowers, especially those in need of 100 percent financing or with lower credit scores," John Walsh, president of Total Mortgage, said in a statement.

To read more about eligibility requirements, visit the U.S. Department of Agriculture Rural Development Web site.

By REALTOR® Magazine Online

1 comment:

Manhattan Beach Agent said...

The trend to lower down payments in the last couple decades has certainly increased real estate demand, but it comes at the cost of increased systemic risks.

I'm not so sure that offering 100% financing ends up being good for buyers, or lenders, in the long run (unless lenders can securitize and sell off loan). My gut tells me that these kinds of loans provide incentive to people to over-step their financial bounds.