You Can Buy a New Home without any Down Payment – Complements of USDA

That’s correct! In today’s tough housing market, you can still buy homes with no money out of your pocket. Last week one of our customers purchased a completely new 4 bedroom, 3 bathroom home (similar like the one in this image) directly from a builder and received $500 cash back at closing.

Ohio Home purchased with USDA Loan

You may wonder “how this is possible?”, if you hear in every newscast that banks are not lending?

This specific Columbus loan was guaranteed by the US Department of Agriculture (USDA), and it’s probably the best no-money down program in the market today. Here is how it works.

It is designed for buyers who want to live in a rural community. Rural in this context does not mean in the “boonies”. Actually, most counties just outside of any metro area qualify. For instance, the home buyers I mentioned above purchased a home in a new subdivision just outside of Columbus, in Licking County. Columbus loans insured by USDA would not be available in Franklin County (that’s the county encompassed by the City of Columbus), but all surrounding counties qualify. This particular home is just 14 miles from downtown Columbus, that’s less than a 30 min drive by car.

There are many benefits of USDA loans, such as:

No down payment required, you can finance up to 100% of the appraised value
No mortgage insurance payment required, unlike FHA loans
No maximum purchase limit
Repairs can be included in the loan amount
Flexible credit guidelines – which means they don’t just go by the credit score

This program is designed for owner occupants. You have to move into the home and can’t use it as a rental. There are income limits for the buyer, as these loans are designed to help low income families purchase a home.

You can find out if you and your future home qualify for USDA financing at this website:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

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