USDA Home loan is designed by United States Department of Agriculture (USDA) to help buyers purchase property in rural areas for the use of farming. The program is already popular for its minimal documentation and lack of a down payment, but it just got better after recent announcements from USDA authorities. In the past year, the government has declared some changes that will make refinancing loans easier, mostly in favor of homebuyers. They’ve introduced some amendments that can reduce homebuyers financial burden. The announcements are primarily related to reduction of entry-level and overall financing costs. Let’s check out the primary changes made in this type of home loan program.
USDA Home Loan Program Changes
Changes in USDA Mortgage Loan Program
USDA authorities have announced the following changes, which makes the program more attractive and affordable.
a. Guarantee Fee – Upfront Guarantee fee is reduced from 2.75% to 1 % of loan amount.
b. Annual Fee – Annual fee payable on Average Scheduled unpaid principal balance is reduced from 0.5% to 0.35%. Timelines of the changes The new changes are applicable starting 1st October 2016 (Start of fiscal year 2017) till the end of 30th September 2017.
Conditions to Qualify for the Changes
Below, we’ve listed some of the criteria to qualify for the refinancing under new changes.
a. Minimum FICO score should be 620.
b. Should be owner occupied residences only.
c. Must dwell in an eligible rural area.
d. In case of refinance, the mortgage payments must be made for the period of 12 months prior to the refinance. Those who qualify under this need not submit their credit report, do the appraisal or calculate the Debt to Equity ratio.
Drew Mortgage Associates, one of the most highly rated Boston mortgage lenders can help you to get your USDA mortgage loan processed and guide you to the mortgage loan program that will best suit your needs. With Drew’s experts, you’ll be able to access eligible properties for this loan and undergo quick processing for your documents.