Yes Virginia there are still NO MONEY DOWN HOME LOANS Available.

imageThe United States Department of Agriculture aka the Agriculture Department or the USDA is responsible for developing and executing government policy on farming, agriculture, and food. A lesser known function of the USDA is helping folks in rural areas buy homes.

The USDA  mortgage program was created to assist  families looking to buy a home in rural areas. This program has become more and more popular in recent years, because of the tightening of lender guidelines with other loans.

Here are a few of the many benefits that makes this program popular:

No Down Payment Required

Yes, you heard that right. This is one of the only loan programs out there in 2012 with a ZERO DOWN PAYMENT. This mortgage program still allows you to buy a home with no money down. It’s one of the only programs still available that allows 100% financing.

No PMI Required

Conventional mortgages require a PMI (Private Mortgage Insurance) payment, in addition to the regular mortgage payment, if you don’t have a down payment of at least 20%. The USDA Rural Housing program doesn’t require PMI, even if you finance 100% of the purchase price.  This is a huge benefit, since it keeps your mortgage payment low, while allowing you to qualify for a larger mortgage loan.  No one wants to pay PMI, because it’s not applied to the principal balance or the interest you pay over the life of the mortgage loan.

Low Interest Rates

Even though you don’t have to put any money down with USDA Rural Housing mortgage loans, you will still receive a lower interest rate. Depending on your situation, typically, the interest rates are not much more than 0.5% higher than conventional mortgage loans. This is a great benefit in addition to not having to come up with a down payment and not having to pay PMI. A lower interest rate will save you tens of thousands in interest payments over the life of the mortgage term.

Other Features:

  • No maximum purchase price limit
  • Not limited to first time homebuyers

Now for the negatives.

It is only available in certain areas. In Williamsburg VA it is basically the western part of the county.  You can see a map below for qualified areas. Areas shaded in beige are not qualified as of 2012.

Or enter a home address here to see if its eligible

USDA loan areas in south eastern va

If you would like to explore USDA rural development loans in Williamsburg, New Kent, Gloucester or the surrounding areas shoot me an email [email protected] and I will connect you to one of our preferred  lenders.