USDA Zero Down Home Loans

Dated: 03/26/2018

Views: 520

USDA home purchase loans help you purchase a home at a competitive interest rate often without requiring a downpayment and low private mortgage insurance. 

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What does this program do? This program assists approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may build, rehabilitate, improve or relocate a dwelling in an eligible rural area. The program provides a 90% loan note guarantee to approved lenders in order to reduce the risk of extending 100% loans to eligible rural homebuyers. 

Who may apply for this program? 

Applicants must: 

Meet income-eligibility. 

• Agree to personally occupy the dwelling as their primary residence. 

• Be a U.S. Citizen, U.S. non-citizen national or Qualified Alien. 

• Have the legal capacity to incur the loan obligation. 

• Have not been suspended or debarred from participation in federal programs. 

• Demonstrate the willingness to meet credit obligations in a timely manner. 

• Purchase a property that meets all program criteria.

What is an eligible area?  Check eligible addresses for the loan guarantees. 

How may funds be used? Funds backed by loan guarantees be used for: 

• New or existing residential property to be used as a permanent residence. Closing cost and reasonable/ customary expenses associated with the purchase may be included in the transaction. 

• A site with a new or existing dwelling. 

• Repairs and rehabilitation when associated with the purchase of an existing dwelling. 

• Refinancing of eligible loans. 

• Special design features or permanently installed equipment to accommodate a household member who has a physical disability. 

• Reasonable and customary connection fees, assessments or the pro rata installment cost for utilities such as water, sewer, electricity, and gas for which the buyer is liable. 

• A pro rata share of real estate taxes that is due and payable on the property at the time of loan closing. 

Funds can be allowed for the establishment of escrow accounts for real estate taxes and/or hazard and flood insurance premiums. 

• Essential household equipment such as wall-to-wall carpeting, ovens, ranges, refrigerators, washers, dryers, heating and cooling equipment as long as the equipment is conveyed with the dwelling. 

• Purchasing and installing measures to promote energy efficiency (e.g. insulation, double-paned glass and solar panels.) 

• Installing fixed broadband service to the household as long as the equipment is conveyed with the dwelling. 

• Site preparation costs, including grading, foundation plantings, seeding or sod installation, trees, walks, fences, and driveways. 

How do we get started? 

Applicants must contact an approved lender. Information about approved lenders may be obtained by contacting me (see below) or contacting the Guaranteed Loan Coordinator for Texas.

Blog submitted by: Ron Cooks of All City Realty – Servicing the Greater Fort Hood area which includes: KilleenHarker Heights, Temple, Belton, Copperas Cove and Nolanville. Feel free to call or text Ron (254) 702-0064 if you have any questions regarding Central Texas Real Estate.

For Real Estate Listings in Central Texas visit my website at: or if you’re on the go, text  'Ron' to (254) 449-8582 for our mobile app.

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Ron Cooks

I’m a retired Army Warrant Officer that served our nation for 25 years. I was born and reared in Brooklyn, New York. Shortly after graduating high school, I found myself in basic training at FT. Sil....

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