Rural Development Home Loans

Last December, or early January, I read an article in the Cecil Whig about the Rural Development Home Loans. It was a great article and because of this very timely piece, we will be closing on a new home in the next 6 weeks. This home loan program is an excellent option for new home owners and I wanted to write about it to clue everyone into it.

The United States Department of Agriculture runs the program that gives “low income” rural families the opportunity to purchase homes. They run 2 loan programs. The Direct Loan Program is directed at truly low income families. Here are the income guidelines for our area (see the Philadelphia – Camden- Wilmington area) . The second loan, the Loan Guarantee Program, has much higher income limits. (again, look under the Philadelphia– Camden – Wilmington area.) The best part about the Loan Guarantee Program is that you do not have to have any down payment, are not charged any mortgage insurance (PMI) and the closing costs can be included in the loan for up to 6% of the loan. The trade off is that the USDA charges you $5000 as a guarantee of repayment. If you buy a house for $250,000, they add on the $5000 so your mortgage is for $255,000.

Here is the general information link to the Loan Guarantee Program: http://www.rurdev.usda.gov/rhs/sfh/brief_rhguar.htm

The link for the Direct Loan Program is here:
http://www.rurdev.usda.gov/rhs/sfh/indiv_sfh.htm#Direct%20Loan%20Program%20(Section

Most of Cecil County is eligible for the loan with the exception of the tiniest bit in the North East Corner (Fair Hill Area). The USDA has a searchable map of eligible property.

One of the things that the newspaper article talked about was the difficulty of finding a lender. Although my realtor gave me a contact or two, she hadn’t done one of these home sales in a long time, so the contacts were not good. I ended up calling around until I finally found someone who did the loans. In the interest of saving readers time and effort, here is her contact information:

LAURA L'ITALIEN
Home Mortgage Consultant
Wells Fargo Home Mortgage
206 South St
Elkton, MD 21921
Laura.LItalien@wellsfargo.com
410-620-2227

Now is a great time to take advantage of buying a house because there is an $8,000 credit to your taxes when you buy a home this calendar year. With this loan and the tax credit, we saved thousands of dollars. Now, maybe, you can too.