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How To Buy Your Dream Home With No Down Payment

Indiana Home Buyers Looking for True one hundred Percent Financing Ought to Think about using the USDA Rural Development Home Loan Program

The most effective kept Indiana mortgage loan tips to true 100 percent home financing in Indiana is the USDA Rural Development home loan program.  This program is used to assist moderate income Indiana home buyers purchase houses in rural housing areas.If your income falls within 115% of the median income in your metropolitan statistical area, you meet the requirements for this program - as long as you're able to prove that you are able to make the payments, counting property taxes and insurance.  There is no minimum credit score requirement for this mortgage program; however, you are required to be able to show "credit worthiness," which implies that you can't have late payments or missed payments, collections, etc. on your credit report.

What Type of Properties are Eligible for the USDA Rural Development Program?

You might be surprised to find out that the USDA Rural Development program covers houses that are actually pretty darned nice!Housing must be modest in size, design, and cost.   Properties bought, constructed, or rehabilitated must meet up with the voluntary national model construction code adopted by the state of Indiana, as well as Housing and community facilities programs thermal and site standards.

Manufactured properties are eligible, but new manufactured housing have to be permanently affixed and meet the HUD Manufactured Housing Building and Safety Standards and Housing and community facilities programs thermal and site standards.

Zero Down Payment Necessary.  This is a true 100 Percent Financing Home loan Solution!So long as you're able to show credit worthiness and the ability to pay your mortgage loan, you should qualify!  Overall, your repayment feasibility is going to be determined using ratios of repayment (gross) income to Principal, taxes, and insurance to total family debt.

Highlights of the Indiana USDA Rural Development Home Loan Program·

• NO Down Payment Required   -   103.5% Financing·
• No cash reserves required·
• No First Time Homebuyer Requirement·
• New and existing real estate OK·
• Fully amortized 30-year fixed rate loan·
• No minimum credit score required…common sense underwriting·
• 100% gifted closing cost or down payment assistance is permitted·
• Non-traditional credit may substitute for not enough usual credit history·
• No PMI· No seller contribution limit·
• No Prepayment Penalty·
• Home mortgage amount can include loan closing expenses and prepaids up to the appraised value·
• No stated maximum mortgage amount; maximum loan determined by repayment ability·
• No minimum cash contribution required from client·
• No limitation on source of funds for settlement costs.
• No seasoning requirement·
• No derogatory credit explanations necessary when credit score is 620 or above·
• Rent isn't verified with credit score of 620 or more·
• Qualifying ratios of 29%/41%…29% Principal, taxes, and insurance to Income and 41% Total DTI, however standard ratios could be exceeded with recognized compensating factors·
• New "Manufactured Homes" Acceptable - Setup & Installation on owner-occupied land (No leases or lifetime leases permitted - you Have to own the land, as well!)·
• Maximum Income Limits are good for town homes, modular homes and condos

Determining if property is inside a Rural Development specified rural area:

Indiana is literally filled up with spots that qualify as eligible for the USDA Rural Development program.  Actually, all counties except for Marion County is eligible.

Is Your Preferred Residence Eligible for USDA Rural Development Program?

To find out if your preferred house is eligible for the <a href="http://eligibility.sc.egov.usda.gov/">Indiana USDA Rural Development</a> home loan program, visit and type in the address information. Click on "property eligibility". Chose "housing programs". If you can't find  or have no idea the address, simply click the county (Locate the map of Indiana or select from the alternatives available on the right hand side of the page).

Note: The following Indiana counties contain some non-rural areas Allen; Bartholomew; Boone; Clark; Delaware; Elkhart; Floyd; Grant; Hamilton; Hancock; Hendricks; Howard; Johnson; Lake; LaPorte; Madison; Marion; Monroe; Porter; St. Joseph; Shelby; Tippecanoe; Vanderburgh; Vigo; Wayne.

Determining Your Income Eligibility for USDA Rural Development FinancingIncome limits are offered below.  Don't be frightened if your initial income is over the limit.  The USDA Rural Development program permits you to deduct from your income bills like childcare expenses for kids age twelve or younger and paid to someone outside the family. You can also subtract $480 annual deduction for anyone under 18 along with a student living in the home as long as the student won't be on the home loan.

Example: Madison County 4-person family (2 adults, 2 children) has a gross income of $80,310. Child care for the two children age 12 or less is $10,000 annually. Is the threshold income at or below the limit? YES. $80,310 less$10,000 child care less $480 for each child = $69,350.

The income limits can be found at the USDA Rural Development Eligibility Home page by following either of the links provided below.

http://eligibility.sc.egov.usda.gov(click on "Guaranteed Housing" under the "Income limits" tab on the left side of the page)

or

http://www.rurdev.usda.gov/rhs/sfh/sfh guaranteed loan income limits.htm(Direct link to the 2010 Income Limits)

The number of people used for income eligibility is the number of people living in the home,  including foster adults and foster children, not the number of applicants on the file.

The basic income limit for non-high cost counties are:

1-4 Person:  $74,050

5-8 Person:  97,750

 

About the Author

About the Author:

Jeremiah Wean has been in the mortgage industry since 1996. Are you ready to learn more about Mortgages and the USDA Guaranteed Home Loan.  Free 90 page Home Buying Guide reveals Insider Tips other Mortgage Brokers Don't Want You to Know.

(c) Copyright - Jeremiah M. Wean - All Rights Reserved

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