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Tuesday, January 17, 2012


By Aideyan Omoregbee
Fico 620 Require
Part I

The Rural Housing Service (RHS) is a part of Rural Development (RD) in the U.S. Department of Agriculture (USDA). RHS operates a wide range of programs that were once administered by the Farmers Home Administration to support affordable housing and community development in rural areas. RHS provides direct loans (made and serviced by USDA staff) and also guarantees loans for mortgages extended and serviced by others.

USDA 100% Rural Home Loans is Booming throughout SC
A USDA Government guaranteed and insured loan is a loan that offers purchase or fixer upper borrowers a 100% financing in the rural areas of the country. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. Some urban areas also qualify for these loans. More than 75% of South Carolina qualifies for USDA mortgage loans.
With a USDA loan program, an individual or family may borrow up to 100% of the appraised value of the home. NOTE: Many USDA loans are available with:
  •  No Money Down.
  • No Mortgage Insurance
  • Affordable by Low Income Borrowers
  • Come with Low Monthly Mortgage Payments.
  • Borrower only Needs 620 Credit Score

 Important Characteristics of USDA Guaranteed Rural Housing Loans (Section 502) (U.S. Dept. of Agriculture) Mortgages
The USDA (Section 502) loans are primarily used to help individuals or households with steady, low or modest income, but are unable to obtain adequate housing through conventional financing to purchase homes in rural areas.

Funds can be used to build, repair, renovate or relocate a home, or to purchase a new or existing dwelling or the purchase of a new manufactured home and prepare sites, including providing water and sewage facilities. RHS does not make a loan directly to an eligible applicant, but reduce the risk by guaranteeing a loan made by a commercial lender

Applicants for direct mortgage loans from Rural Development Housing & Community Facilities Programs (HCFP) must have very low or low incomes. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI.

Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically within 22 to 26 percent of an applicant's income. However, payment subsidy is available to applicants to enhance repayment ability. Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories.

An eligible applicant must have an adequate and dependable income (up to 115 percent of adjusted area median income, [AMI]) a decent credit history and be unable to qualify for conventional mortgage credit.
To qualify the applicant, RHS uses two formulas to determine a family’s ability to undertake the responsibility of a mortgage loan.
  • First, the burden of principal, interest, taxes, and insurance (PITI) must be 29 percent or less of the applicant gross monthly income.
  • Second, the total of monthly debts must be 41 percent or less of gross monthly income.

For more information on different mortgage loan types, purchases, refinances, blog posts, please visit us @ Tricont Mortgage, Tricont Buzz, Tricont Post  Tricont Blog and Tricont Mortgage Blog before closing on your purchase or refinance mortgage loan….. I can be reach @ (803) 317-2500 or email me @ you very much and Welcome.

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Part 2 of 3
To follow soon…..Thank you

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