USDA Rural Development Loan Program

Post date: Jan 28, 2013 7:29:34 AM

The Rural Development Loan is is $0.00 down, 100% financed, no monthly MI/MIP and a 640 Minimum Credit Score.  What this means to you as the home buyer is: 

$0.00 Down - No cash required for downpayment 

      1) The only cash you may need is for your Earnest Money (which you provide to your realtor at the time your Purchase Contract is accepted.) 

      2)  Appraisal Fee (Fixed fee of $450.00) collected at the time you have an accepted purchase contract. 

These two items (earnest money + $450) will be refunded to you after closing because they are included in your loan.  So, if you had to pay $100 in Earnest Money and the fixed $450 for the appraisal, after you close on the house, you would receive a check for $550.00.

100% Financed -  All Closing Costs and prepaids can be financed into your loan (subject to satisfactory appraisal for desired loan amount). 

No Monthly MI/MIP - MI stands for Mortgage Insurance.  MIP stands for Mortgage Insurance Premium.  This is an Insurance Policy that is required by the government for any loan program that has a down payment of less than than 20% of the sale price.  If you were going with any other loan program you would be required to pay MIP. Because the USDA Loan Program is guaranteed by the Department of Agriculture there is NO monthly MI/MIP.  

USDA Funding Fee / Annual Fee - USDA does charge a funding fee for their guarantee, this funding fee is 2% of the total loan amount. USDA also charges an annual fee which is included as a part of your monthly payment. This annual fee is 0.3% of the loan amount broken down monthly each year for the life of the loan.

640 Minimum Credit Score - While The United States Department of Agriculture does not have a minimum credit score requirement for USDA Loans, all Investors currently have a 640 minimum credit score requirement. 

If you would like to see if you qualify for this program,

fill out our Pre-approval application.

For more information about this loan program, Click here

(Refer to the "Loan Guarantee Program")

For Eligible areas in California, Click here.

If you have any additional questions, 

don't hesitate to call us at: 949-607-8808 

Toll Free at: 877-410-6663

Fax us at: (909) 247-2709