In the midst of all the stimulus bailouts, credit crunch, tougher lending guideline and requirements for higher scores, there emerges one bright light; USDA, Rural Zero Down Home Loans. That's right Zero down. No down payment. And the closing costs can be paid by the seller or financed in the loan if the appraisal is high enough so that it is very possible (almost every one) to buy a home with no money out of your pocket!
For all the hassle it takes to get an FHA or Conventional loan today, and they require a down payment, the Rural home loan program is by far the easiest. These loans are for the outlying areas of King, Snohomish, Pierce, Thurston, Skagit and Whatcom Counties (actually all "rural areas of the US). These areas aren't the remote hinterlands, but rather skirting the city limits of the larger towns and cities in the area. This is the first of several conditions to qualifying for one of these home loans.
The second condition is income. Unlike every other loan that wants you to make more money, this is for moderate to low income brackets. This is based on the county median income and for your county. Snohomish County for example a family of four can make up to $88,400 adjusted gross income per year and still qualify (you could actually make more). The incomes currently are tiered by number of people in the house hold from one to eight and the income limits vary by the number of people residing in the house. This is supposed to change soon to a two tier income platform (allowing even more people to qualify). With a simple phone call we can tell you what you can qualify with your income.
There are no restrictions on the price of the home you would consider, as the price will be restricted by what you can qualify for with your income. So the 750,000 McMansion probably won't work.
Another condition is credit scores. The Rural Home loan is much less stringent and everyone gets the same great low rate. The Rural home loan will take the middle score of your three credit reports, Equifax, Experian and Transunion. Essentially it doesn't matter how low one of your scores are as long as two of them are over 620. A lot of people can qualify for a loan with these standards but even better is that they really don't consider the past credit history to be very important. Even bankruptcy, repossessions and foreclosures have little to no impact on qualification. If you are over two years out of bankruptcy then you still have a chance to finance a home. As well as if you have current collections and charge offs, as long as your score is over 620 it really doesn't matter. If it isn't, we can help those that really want to raise their scores.
With the price of homes where they are today, interest rates at record lows and less than perfect credit considered, there couldn't be a better time to buy a home. The Rural loan program is really the home loan for "Joe Six Pack". It is the one home loan that can still give you the chance at the American Dream.
About this Author
Don Davis can be reached at 360-652-9994 or email him at dond at htlnw.com or visit his web site at http://www.HTLNW.com for other contact information.
Don specializes in residential and commercial lending mostly in and around Snohomish County, North King County, Skagit county and generally in the state of Washington.
Don has spoken at numerous workshops and events and written articles regarding credit scoring and related topics and has helped many people substantially raise their individual credit rating.
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