In the Triangle, we are lucky to have such a large area that qualifies for USDA financing on mortgage loans! This program offers a 100% loan for home buyers who qualify with properties located in the more “rural” parts of the area!
Does that mean it’s just for a FARM? Oh NO! This is for your home, not for income producing farms. The loans do have a guarantee fee of @ 3.5%. This means that if you purchase a home for $100,000 (I only use this example since I can do this math in my head) then you will have an additional fee of $3500 added to your loan. The total loan will be $103,500 – which means that you will owe more on the home than you paid for it when you close. Because of this, I think there are a few important things you should consider:
- Are you working with an Agent to get a really good deal on the home? This is not the time to be an amateur buyer! It’s time to pull the experts in to purchase a great home! (If you are not hooked up with a great Realtor in the Triangle, let us know and we’ll refer you!) Since you are going into the property owing more than you paid for it, you want to get a great deal!
- Are you buying a “fixer upper” or a foreclosed property? There are programs designed for purchasing a previously foreclosed property that needs some repairs (Click here for details), but that’s not what USDA is designed for. This is JMHO, but if the property just needs some updating, that’s one thing… but if the roof needs to be replaced this year, and the carpet is worn thin – I would not want a USDA loan on that home.
- You need to have DECENT credit, but we can do loans for folks with credit scores less than 620 – especially if there are off-setting factors, like you graduated from college, or have a decent 401K savings amount! Again, just my $.02 worth – but if you are already on shaky ground… this might not be the time to go into a 100% mortgage!
USDA Home Loans near Raleigh NC
The qualifying incomes vary per county, and the property eligibility varies by address, however we’ve put together some basic information on USDA loan in the Triangle (just click the links for each county):
Wake County: We have maps for Apex, Holly Springs and Wake Forest. In general, all of Fuquay Varina, Wendell and Zebulon qualify for this financing. The maximum income for 4 people in the household is $91,850. The areas around Holly Springs and Apex see map changes each December. The areas around Wake Forest see a similar slow erosion of areas that qualify each year.
Johnston County: In general, all properties in Johnston County Qualify for USDA financing. Click the link to get maximum income requirements. For a USDA home loan, you need to have decent credit. The minimum credit score is generally at 620, although exceptions are granted on a regular basis.
Durham County: Probably has the least amount of real estate that qualifies for USDA Home Loans, however, there are some very desirable spots near Briar Creek and Northern Durham County that qualify. The Maximum income limits in Durham County are lower than Wake and Johnston County (of course their FHA maximum loan limit is higher!)
Orange County: I was surprised when I looked at the maps for Orange County! Most of the county qualifies! Okay – so downtown Carrboro doesn’t qualify, and neither does Chapel Hill – but most of the rest of the county does! Click on the link for a map and to see the maximum income limits.
As I write this, mortgage rates for this program are VERY reasonable. A USDA (depending on credit scores and when you are closing) could easily have a rate at or below 4.0% (4.49 APR)
So – if you purchased this house (which has almost 1820 square feet and has a garage!) in Holly Springs, for $192,000… your principal and interest payment could be $1036.61! With TOTAL monthly payments under $1250 a month – you would probably SAVE money by purchasing this home! The TAX Advantages are HUGE!
First Time Home Buyer Grants** can also help cover your Closing Costs!
**A Quick Note
We refer to these programs as “mortgage grants” because there are no payments to be made, there is no interest charge, and there’s no expectation that you will have to repay ANY of the money you receive for down payment, unless you move out of the property or refinance prior to the dates assigned by your specific down payment assistance program.
The literal term for this down payment assistance program is a “forgivable loan.” Under the terms of the program that best suits you, a portion of this down payment assistance will be forgiven on a schedule that we will share with you when you make loan application. These funds are available to us through NC Housing (NCHFA) and are available through other lenders in the state as well. The interest rates for these programs, however, will not vary from lender to lender as that is set by NC Housing.
Call Steve and Eleanor Thorne, USDA Mortgage Loan Experts 919-649-5058 If you are looking for a home that’s not mentioned in this post, click here for a list of counties that qualify for USDA Home Loan financing in NC.