100% Mortgage Loans in Chapel Hill?

I was very surprised by just how much of Orange County, NC qualifies for USDA Home Loans!  Pleasantly Surprised! There are three basic requirements to qualify for a 100% Mortgage loans in Chapel Hill using the USDA Home Loan Program.  The first is that you need to have decent credit.  Second you need to buy a home that is within the USDA Eligibility Footprint for Chapel Hill and Orange County and third you need to be under the Household income limit for the County.

The 2015 maximum income amounts for Orange County are lower than Wake County!

  • 1- 4 people in household maximum income is $82,000
  • 5 or more people in the household maximum income is $108,250

The USDA’s loan’s biggest feature is  that it is a No Money Down Home Loan!  That’s right, if you qualify – this is a 100% mortgage loan.

USDA Home loans are one of the best mortgage programs available, especially for First Time Home Buyers.  These are fixed rate, 30 year payback mortgage loans, designed exclusively for owner occupied properties.  This program is not suitable for Investment Property.  The USDA Home Loan NC program is so desirable because it has very low monthly USDA PMI rates – especially if you do a side by side comparision against a FHA Home Loan.    Let’s look at the difference when we have a loan at the exact same interest rate

USDA Home Loan Sales Price of $200,000

USDA Down payment Requirement:  $00

USDA Upfront PMI Premium:  $4000

Monthly USDA PMI Premium:  $84 (.5% rate)

Monthly Payment with P&I and USDA PMI = $1101

FHA Home Loan Sales Price of $200,000

FHA Home Loan Down Payment Requirement: $7000

FHA Home Loan Upfront PMI Premium:  $3860

Monthly FHA PMI Premium:  $281 (1.75% rate)

Monthly Payment with P&I and FHA PMI = $1278

Is the USDA loan program limited to first-time buyers?

No, the USDA Rural Housing Program can be used by first-time buyers and repeat buyers.  We’ve done several loans for folks who currently have a house (in Tennessee for instance) and get transferred to NC – meaning that when they buy in NC… they’ll have 2 houses.  There are some ways for this to work.

Granted, downtown Carrboro and Chapel Hill do not qualify – but MOST of the county does! Unfortunately, the USDA Eligibility Maps for Chapel Hill, Carrboro and Orange County are scheduled to change in October of 2014.  With this change, many areas that are currently eligible for the program will no longer be eligible.

The parts in the “shaded” areas do not CURRENTLY qualify for USDA loans, however, all of the rest does!


If you have questions about qualifying for a USDA Home Loan in Orange County, NC – please call Steve and Eleanor Thorne, Connect With Us on Facebook, 919-649-5058!  If you are considering a USDA no money down home loan, call Steve and Eleanor Thorne.  We can help you find out if your income qualifies for the program in your county – and if the property you have your heart set on is within the USDA Footprint!

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