There is a loan available that where you can finance up to 102% of the purchase price.
The catch?
The property has to be eligible. And the general rule is that the more “rural” the property is, the more likely that it will be considered eligible… because the loan is the California USDA Rural Mortgage Loan.
Just because it is called the USDA rural mortgage loan doesn’t mean that the property is actually rural – it just means that the property has to be rural according to the USDA.
The easiest way to find out if a property is eligible for 102% financing under the USDA rural home loan program is to check the USDA database.
You can check it here.
Once you know if a property is designated eligible for 102% financing or not, the next step is to understand the loan program.
California USDA Rural Mortgage Loan Program Highlights:
- Finance full purchase price plus closing costs up to 102% appraised value.
- 6% seller concessions permitted for closing cost assistance.
- 100% gifting permitted for all closing costs.
- No post-closing reserve requirements.
- 29/41% ratios.
- NOT limited to first-time home buyers.
- No monthly mortgage insurance — one time guarantee fee at closing — which keeps monthly payments lower than FHA.
- Finance required property improvements into total loan up to 102% of “as improved” value. Repairs may be completed after loan closing.
The USDA rural home loan program is an excellent program for people who want to finance 100% of their home and are interested in buying a qualifying property. Interested in the USDA rural home loan program?
Contact us for more information.
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Can a buyer purchase a home if the appraisal value is less than the offer?