USDA home loans
Rural development home loans offered through the U.S. Department of Agriculture (USDA) are making property purchases more affordable for new and repeat residential home buyers.
The program, backed by the federal government, is designed to help families looking to own a home in qualifying small communities or rural areas outside the city limits with a population of less than 20,000.
Dave Corwin, USDA housing program director for Pennsylvania, said the most significant factors for loan eligibility are location and total household income.
Rural home loans accommodate low-to-moderate income levels based on family size that varies by state and county.
鈥淭his is one of two of the best types of loans for this area, the VA home loan is the other,鈥� said Jim Corcoran, real estate agent at SWC Properties in Uniontown.
Although the city exceeds the USDA蘑菇视频 eligible population guidelines, Corcoran said properties in smaller communities such as Masontown and Leckrone can qualify.
The two types of loans available through USDA are a Rural Development Guaranteed Housing Loan and Direct Housing Loan.
Corwin noted about 80 percent of REALTORS庐 are unaware of the direct loan program, geared to help low income households.
鈥淟ast year 50 percent of our money went back to (Washington) D.C., which was about $3 million that could have come here,鈥� said Corwin.
A Guaranteed Loan program is the most common with higher income limits and 100 percent financing for move-in ready home purchases.
鈥淚f you fit the criteria you can borrow above the sales price up to the appraised value and have money to do (small) necessary repairs,鈥� said Corwin.
To qualify, loan applicants can have an income of up to 115 percent of the median household income for the area where they are looking to purchase.
All gross household income must be counted toward the total annual income.
However, items like child care, medical expenses and dependents can possibly be deducted.
Direct Housing Loans, which are less common, are only available for low and very low income households that are below 50 percent of the area median income.
Last year, Corwin said the USDA approved 5,150 rural home loans totaling $686 million with Pennsylvania ranking fifth in the nation.
鈥淲e (USDA) have money sitting here we鈥檙e waiting to spend,鈥� said Corwin.
In Fayette and Washington counties, Corwin said the income median for a guaranteed home loan for one to four people living in a household is $74,900 and $98,850 for five to eight people.
In Greene County, the income median is $74,750 for one to four people and $98,650 for five to eight people living in a household.
For a direct loan, the income median for Fayette and Washington counties is $38,900 for an individual and $55,600 for a four person household.
In Greene County, the median income for a direct loan is $33,100 for an individual and $47,300 for a four person household.
For those that qualify, Corcoran said USDA home loans are more beneficial compared to other types of loans because they require little, if any, down payment. 鈥淭hey also have 100 percent PMI (private mortgage insurance), which is great for first time home buyers.鈥�
Corwin said guaranteed home loans are set at 30 years at a fixed interest rate and require an up front funding fee of 2 percent, similar to a closing fee, that will increase to 2.75 percent in October.
The fee is funneled back into the program.
Corwin said USDA mortgage rates are the lowest among FHA mortgage rates, and conventional loan mortgage rates.
For more information contact USDA at 717-237-2186 or by email at pagrh@pa.usda.gov.