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100% Financing, Zero down, at 1% Interest!

Yup, it still exists. In fact, 1/3 of my sales last year were through this government loan option.  You can't get it through a lender, which is why so many people aren't using it. 

USDA Direct Rural Development VS. USDA Guarenteed Rural Developement are both great loan programs to buyers with limited income, but only the Direct option offers as low as 1% interest to those who qualify.

How do you know if you qualify for 100% financing at 1% interest?

OR

How can you see if your buyer qualifies for this simple-to-work-with loan?

Each state has one or more main offices where you can call in to request an application.  The application is lengthy and no one will get an approval over the phone. They take 1-2 weeks to review the application and, in somes cases, will give you a verbal "OK" to begin shopping within a certain price range. Any offer you make before receiving a certificate of approval (2-4 weeks or so) must be subject to receiving this certificate of approval.  All of my buyers had a house under contract before receiving theres.

Agents, because I have handled so many transactions with Direct RD buyers, I know the process is simple. If it is your first time it's ok to be scared of tackling a new process.  When you're familiar with a certain loan officer and the more common loan products out there it's easy to be intimidated by this. But don't be. I'd recommend you contact the USDA office to find out when their next homebuying seminar will be and attend it. Learning about this could bring you more deals per year.

I had a client who didn't qualify high enough to find a home during the 6 months she spent searching with another agent.  She came to me and I immediately discovered she'd be an ideal candidate for the Direct RD. It took us less than 3 months to find a home and close, allowing her to buy a $190Ks priced home and keep a low mortgage of around $1000/month (PITI).

Of course, there are some things to consider with a subsidized loan and those are things you or your buyer will learn during the required homebuying seminar.

The next seminar in Keene, NH will be offered through Cheshire Housing Trust on Novembr 6-7. I'll be there speaking from a REALTOR's perspective.  Typically there are about 15-18 potential buyers in the seminar and I often get 2-3 calls from these buyers to begin the process of looking for a home.

Yes, 100% Financing, Zero down, at 1% Interest still does exist!

Comment balloon 0 commentsStephanie Jacques • September 08 2010 12:25PM

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