When buying real estate, one of the best ways to save money on a mortgage is the often overlooked USDA home loan. Offered by the US Department of Agriculture as a rural housing program, these loans can finance up to 100% of the appraised price, and offer low fixed rates. The catch is that the home has to be in an approved rural area, usually far from town, and the areas have already been chosen and pre-approved by the government.
In the Pensacoloa area, there are homes in northern Escambia and Santa Rosa County that qualify under this program. (Gulf Breeze 32563 is eligble but 32561 is not eligible.)
Let's discuss these kinds of loans, what they offer, and the requirements.
1. The property being purchased must be for a primary residence, and located in the Florida USDA Rural Development area. There are no exceptions to these two rules.
2. Minimum credit scores can be approved, even with previous short-sales, foreclosures, and bankruptcies on a buyer's record.
3. Interest rates are lower than most other types of mortgages, which makes the payments lower as well.
4. There are no set limits on price. Mortgage amounts are determined by income and appraised value. If the appraised value is higher than the cost of the home, the buyer can even finance settlement charges as well as 100% of the property's cost - no down payment required if the price is right.
There are come income limitations that that are not applicable in other types of mortgages. Unlike other mortgages, USDA mortgages are based on the income of all family members, not just the borrowers. Some deductions are available that help with qualifications in this situation, however. Most counties have a family income limit of $74,750 for 1-4 person families, and up to $98,650 for families with 5 to 8 persons. (The term "family" includes all household members, not just relatives.) If a household has 9 or more members, special limits can be allotted.
If you're looking to buy more house for the money, can commute to a job or work from home, and enjoy living in the country, please ask us about USDA homes in Pensacola, even if you have less than stellar credit. You might be very pleasantly surprised at what you can buy and how much you can save with this special government funded mortgage loan.