The United States Department of Agriculture (USDA) Rural Development offers housing assistance programs to rural and suburban families throughout the country. The USDA Single Family Housing Guaranteed Loan Program is a loan program available to low and moderate-income families. These loans are offered by local vendors and are insured by the USDA. USDA Single Family Housing Direct Home Loans on the other hand are offered directly by the USDA. Direct loans are offered in the form of a subsidy and are available only to low and very-low income households. At North Star Mortgage Network Inc., we offer both guaranteed and direct USDA loans to residents of St. Johns, Clay County, and the surrounding Florida areas.
USDA Rural Development Single Family Housing Guaranteed Loan Program
USDA Guaranteed Loans allow Florida families to purchase homes with many benefits including zero money down, very low interest rates, and the ability to finance closing costs. Borrowers will need to meet a few requirements to be eligible for the program.
- The home must be the borrower’s primary residence.
- Household income must be less than or equal to 115 percent of the median income for the area.
- The home must be located in an eligible area.
- Borrowers must have an acceptable credit history and be able to afford mortgage payments, taxes, and mortgage insurance.
The USDA requires that two mortgage premiums be paid with each loan. An upfront premium of 1% of the purchase price will be due and is generally added borrower’s mortgage balance. The second is an annual premium equal to .35% of the annual mortgage balance. This premium is paid monthly as part of your mortgage payment.
USDA Rural Development Single Family Housing Direct Home Loans
Low and very-low income families are able to take advantage of the USDA Direct Loan Program. This program is often referred to as the Section 502 Direct Loan Program. The goal of the direct loan program is to help families that are without safe and sanitary housing. Low income is defined as being between 50 and 80 percent of the area median income (AMI) while very-low income is below 50% of the AMI. To be eligible, applicants must:
- Be unable to obtain a loan from other sources and must meet specific income requirements.
- Be without safe and sanitary housing.
The home being purchased must:
- Be the borrower’s primary residence and be located in an eligible Rural Development area.
- Be 2,000 square feet or less, not have a market value in excess of the applicable area loan limit, and not have an in-ground pool.
USDA Rural Development loans are great loan options for low and moderate-income families in Florida. At North Star Mortgage Network Inc., our goal is to make homeownership a reality for all families throughout St. Johns, Clay County, and the surrounding Florida areas. Contact us at any time for more information on Florida USDA loans.