The Guaranteed Rural Housing Loan Program is offered through the Rural Housing Service (RHS), an agency of the U.S. Department of Agriculture.
The program offers assistance to low and moderate-income rural residents whose income is equal to or less than 115% of the area median income.
It was designed to assist qualifying rural residents with better access to affordable housing finance options with little or no down payment or out-of-pocket costs.
There are several advantages to using USDA’s Home Loan Program.
- 100% Financing
- Low Monthly Mortgage Insurance(MI)
- Low Mortgage Interest Rates
- Low Closing Costs
- Never a Pre-payment Penalty with USDA
Buying a home offers many advantages, one of the most significant being that it allows you to build equity (ownership) when you pay your mortgage each month. A common myth is that monthly mortgage payments are more expensive than rent. But, in many cases, mortgage payments can be even less than rent. When considering home ownership for the first time, you need to decide whether buying makes financial and practical sense for you right now or if you are better off renting. Consider both the advantages and disadvantages to renting as well as buying, and weigh the pros and cons for your particular situation. Purchasing a home is a very exciting time, and being well prepared will help you make better decisions.
3% Down Programs
For many homebuyers, finding their perfect house is the easy part finding the right financing for their circumstances can be harder. 3% down mortgage helps address the financing challenges of multigenerational households, such as parents, adult children, and others sharing a home, and low- and moderate-income households.
Wright Mortgage’s 3% programs allows accessible financing and supports sustainable homeownership. Key features include:
- Low Down Payment and Flexible Sources of Funds. Allows down payments as low as 3%, with no minimum contribution required from the buyer’s own funds (on 1-unit properties).
- Conventional home financing with private mortgage insurance (PMI) that, unlike many government-insured loans, may be eligible for cancellation when home equity reaches 20%.
- Homeownership education helps buyers get ready to buy a home and be prepared for the responsibilities of homeownership. The required training offers an easy-to-use, online course provided by Framework.
- Underwriting Flexibilities. Through an innovative new feature that supports extended households, income from a non-borrower family member or other adult living in the household may be considered to allow for higher debt-to-income ratios
Wright Mortgage offers portfolio lending and welcomes interested consumers looking for options to make their dream of owning a home a reality. These products are another option for someone who could not qualify for a traditional Fannie Mae or Freddie Mac loan. Products offered by Wright Mortgage include:
- Jumbo Alternative – This lending option offers alternatives for buyers looking for loan amounts up to $2 million with flexible guidelines. A 90% loan to value (LTV) ratio, debt to income (DTI) ratio up to 50 percent and an interest-only option are offered. Types of acceptable income documentation include restricted stock units, asset depletion and additional solutions for self-employed buyers.
- Homeowners Access – This solution was designed to assist buyers achieve or re-establish homeownership. Maximum DTI accepted is 60 percent, and there are special considerations for late mortgage payments within the last year or a housing or credit incident greater than 24 months. Buyers may be eligible for financing that was not previously available to them through alternative lending means.
- Fresh Start – This lending option is for buyers that have not been able to receive financing because of a short sale, bankruptcy, foreclosure or a deed in lieu within the past 24 months.
- Foreign National – This option helps make buying a second home in the United States easier for qualified non-citizens who visit the country regularly for business or vacation. There are both fixed- and adjustable-rate options available, along with flexible guidelines to help qualified Foreign National buyers obtain home financing.
30 Year Fixed
A 30 year fixed conventional loan is a loan that has the same mortgage payments for 360 months.
Conventional loans typically are harder to qualify for than FHA loans and require a slightly higher down payment. However, in some cases rates can be lower and have lower closing costs. Also, monthly mortgage insurance is usually less or can be nothing with 20% down payment.
20 Year Fixed
This type of loan is the same as the 30 year fixed rate loan except the life of the loan is 240 months as opposed to 360 months. Since the loan is being paid slightly faster than the 30 year fixed rate loan, monthly payments for this type loan are higher than the 30 year fixed rate loan. Some Lenders allow for a lessor rate.
15 Year Fixed
This type of loan is the same as the 30 year fixed rate loan except the life of the loan is 180 months as opposed to 360 months. Since the loan is being paid faster than either the 30 year fixed rate loan or the 20 year fixed rate loan, monthly payments for this type loan are higher than the other two loans. Generally, the longer a lender agrees to keep the interest rate “fixed”, the greater the risk to the lender, therefore, in most instances, interest rates on 15 year fixed rate loans are slightly lower than on 20 or 30 year fixed rate loans.
- 5% down payment required on purchase
- Minimum credit score – usually 620
- Post- bankruptcy: can qualify after 4 years
- Post-foreclosure: can qualify after 7 years
- Post-shortsale: Can Qualify after 2 years (LTV restrictions may apply
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