Home buyers in Louisiana have a great financing option available to them. The USDA Home Loan offers 100% no money down financing. Buyers can buy a home without having to come up with a down payment. Unless a buyer is a veteran there is no other 100% loan available. There are also many other benefits to the USDA Home Mortgage.
One of the many features that buyers are attracted to is the monthly mortgage insurance. USDA actually calls it a guarantee fee but it essentially functions the same way as MI. The fee USDA Loan program is partly funded from these fees. They have different fees which area the upfront and the annual fee. The upfront is 2.75%. While that may sound like a big number the thing to remember is that is actually added to the loan amount and is paid out over 30 years. The annual fee is .50% and is paid out monthly in the homeowner’s payment. This actually has a larger impact on the monthly payment. The good news is that the annual fee is still substantially less than other loans with mortgage insurance. For example the FHA loan uses a factor of .85%. This is a difference in a substantial amount of money each month.
The credit standards of the Louisiana USDA Home Loan is another point that attracts home buyers to the loan product. USDA Loans do not have a minimum credit score however most USDA Lenders have a score that they require. It is common to see lenders have their score requirements at 620+. Besides lower credits there are other favorable credit standards. The USDA Loan allows borrowers to only be 2 years removed from bankruptcy and 3 years from foreclosure. While there are trade line requirement’s borrowers can use alternative trade lines such as utility bills.
Another important feature of the Louisiana USDA Loan is the seller paid closing costs. Home sellers can pay up to 6% of the sales price towards the buyers closing costs. For example on a transactions where the sales price is $150,000 the seller can up to $9,000 towards the buyers closing costs. In most all cases this is more than enough to cover all costs associated with the loan. With this buyers can literally get into a home with no money out of pocket with the USDA Loan. They have no down payment and can have all closing costs paid.
Primary Residential Mortgage, Inc.
Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.