Sue Botelho-USDA Rural Housing Mortgage Pro

The USDA Rural Development Guarenteed Loan is quickly establishing itself as the most cost effective Rural Housing Loan anybody could use.

Our Rural Housing Loan will save your buyers a truck load of cash and help them keep their money in their bank account after closing!

Here's a comparison of an FHA Government Loan, A Conventional Mortgage and a USDA Rural Development Real Estate Loan.

Not only does the Rural USDA loan have the lowest out of pocket expenses to buy Rural Real Estate, it also has the lowest down payment requirement.

Keep in mind that Rural Real Estate isn't a farm, it's often subdivisions just on the edge of town.

Apply for a Rural Housing Loan here.

When you think of USDA I know the first thing you think is HOME LOAN FINANCING! Right? Actually, if you're like most Americans you probably think of Milk, Cows, Pigs, Corn, Farms and a beautiful farm house. Anything but mortgages.

Rural really isn't all that rural. Here is a picture of a farm, and you'd probably have to go to an agricultural banker to finance it. Below is a picture of a house, and you can finance it with a Rural Housing loan through a Mortgage Lender, like myself!

A USDA Rural Home Loan is designed to help families in areas that are "designated" as rural to get into a home with zero money down! In Florida, the average cash out of pocket to buy a home with this program is "currently" $158.70 and USDA Rural Home Loan demand has BOOMED upward by 475% over the last 12 months.

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Here are a couple of hot buttons for those considering financing a home:

1. You can buy a home without a down payment
2. You don't get charged an expensive (or any at all) monthly mortgage insurance payment
3. Credit requirements are VERY FLEXIBLE
4. A Rural designation may look and feel like the 'burbs.

In the Panhandle of Florida, there are many areas that qualify for Rural Housing loans: all of Santa Rosa County, all of Walton County, Destin, Niceville, Crestview, Valparaiso, and areas in Okaloosa County west of Hurlburt Field. When was the last time you heard someone refer to Destin as "rural"??!!

If you are thinking of financing a home for any reason give me a call or contact me through this blog. Or, you can apply for a rural housing loan here.

Sue Botelho

Northstar Mortgage Group, Destin, FL

With the current market conditions, many homeowners are faced with mortgages they can no longer afford on homes that may be worth less than they owe. A large number of these homeowners are becoming delinquent on their mortgages and, in some cases, are going to foreclosure.

When you find yourself unable to afford your house, your 2nd home, or your investment property, even if you aren't delinquent on your mortgage, there are options available to you before you go to foreclosure. You can do a preforeclosure sale, which involves the sale of the property by the borrower to a third party for less than the amount owed to satisfy the delinquent mortgage, as agreed to by the lender, investor and mortgage insurer or you can do a short sale, which is the same as a preforeclosure except you are not yet delinquent on the mortgage. The difference between a preforeclosure sale and a short sale is that you aren't yet delinquent on your mortgage in a short sale situation. (For ease of advertising, short sales that you see listed on homes for sale typically involve both preforeclosure sale and short sale situations - it isn't necessary for selling/advertising purposes to differentiate between the two).

Because of the increased number of foreclosures, preforeclosure sales and short sales, Fannie Mae (FNMA) has come out with new guidelines for when an individual who has done one of these can get a new FNMA mortgage after the occurence.

If you go through a true foreclosure, you will have to wait 5 years from the completion of the foreclosure before securing a new mortgage with FNMA. If you purchase a home 5-7 years following the completion date, you will only be allowed to purchase a primary home and will be required to put 10% down and have a minimum credit score of 660. There are exceptions for extenuating circumstances but it will be 3 years from the completion date before you can get a mortgage and years 3-7 will have the same conditions as years 5-7 above.

If you go through with a preforeclosure sale, there is a 2 year time period from the completion date before you can get a new FNMA mortgage and there are no exceptions permitted due to extenuating circumstances.

Lastly, if you go through with a short sale and wasn't delinquent on that mortgage, you can secure a new FNMA mortgage THE VERY NEXT DAY! You cannot have had one or more 60, 90, 120 or 150-day delinquencies within the 12 months prior to the credit report date provided that you are not obligated to repay any amounts associated with the short sale, including a deficiency judgment.

If you, or someone you know, is in a position where they need to sell their house and they owe more than it's worth and aren't delinquent on their mortgage, or if you or someone you know is currently delinquent on their mortgage with no way of catching it up before it goes to foreclosure, advise them to contact a mortgage lender and/or a Realtor to get information that can save them from having to go through a true foreclosure. It will certainly help them when they get back on their feet and want to purchase a home in the future!

If your buyer is eligible for a VA loan, and are looking to purchase a primary home, the following information may be VERY helpful to you.

We have found that Rural Housing loans or FHA loans, the Rural Housing loan in particular, can be the best mortgage available, even better than a VA loan in most cases. The Rural Housing loan is specific to particular areas based on full-time population as determined by the US Census Bureau. For instance: in our local area, all of Walton County and Santa Rosa County qualify, as do: west of Hurlburt Field, Destin, Crestview, Niceville and Valparaiso.

The Rural Housing loan is very similar to the VA loan with four major differences:

• It is restricted to certain geographical locations of the property (see above - for the most part, in our local area, only Ft. Walton Beach and Shalimar are not eligible for Rural Housing loans).
• There is a maximum income limit based on the number of people in your household, if any are students, disabled, or over 62 years of age and the county the property is located. I have recently done a Rural Housing loan for a couple that makes over $100,000 a year with children so it is a liberal income limit to qualify.
• The funding fee on a Rural Housing loan in all cases is 2%. IMPORTANT NOTE: The funding fee on a Rural Housing loan is LESS THAN THE VA FUNDING FEE! A VA Funding fee (cost to the veteran) is 2.15% for first time use and 3.3% for subsequent usage, which results in a higher loan amount IN ALL CASES than a Rural Housing Loan!
• The buyer using a Rural Housing loan can finance any and all closing costs and/or prepaid expenses that the seller doesn't pay. What this means is that you can truly get into the home of your dreams with no cash outlay! As an example, if you are buying a $200,000 house, and the seller is only going to pay the doc stamps on the deed (one of the closing costs on a house in Florida), you, the buyer, are responsible for the balance of the closing costs plus your prepaids (upfront hazard insurance and pro-rated property taxes). On a VA loan, you would have to actually bring that amount to closing whereas on a Rural Housing loan you can add that amount to the loan amount and finance it in your mortgage. In many cases, the amount you have to bring to closing on a VA loan can be $3,000 to $5,000; on a Rural Housing loan, it can be $0. Adding this to your mortgage will increase your payment, obviously, but with the smaller funding fee and the low amount being added to a 30-year fixed rate mortgage, the payment increase is extremely minimal, usually within $20 a month!

While VA loans are very good loans, there may be a reason for a VA eligible buyer to look at doing a Rural Housing loan. As I stated above, these are not offered through USAA and the savings that your buyer receives from doing a Rural Housing loan will certainly offset any "dividends" your client may receive at the end of the transaction if they do a mortgage through USAA! It's certainly worth taking a look and seeing which program best meets their individual needs!

Sometimes, mortgage lenders and brokers "take the easy route" and just put a veteran into a VA loan without checking all of their options. You, as their Realtor, need to make sure that they check other options to allow them to verify that they are getting the best deal for their individual needs.

Please feel free to contact us about helping with your clients' financing needs when and if they make the move and purchase real estate in Florida, Alabama, Georgia, South Carolina, North Carolina or Alabama. You will certainly be glad that you did and so will your clients' wallet!