So what’s so good of a loan from the USDA?
-100 per cent LTV-today’s highest LTV loan is mortgage.
rates on business.
credit accepted was less than perfect.
You didn’t know it, but for years, the USDA was in the real estate business. The program was initially designed to stimulate rural development and provide housing for the farming community. Packages of agricultural stimulus are a longstanding pillar of US economic policy back to the turn of the last century. In addition, most of our early prominent economists in government were from the school of agriculture. John Kenneth Galbraith was a notorious alumnus of this school. USDA guaranteed loans were conceived as a modest program to provide housing in areas shunned by large lenders.Usda loan Los Angeles is an excellent resource for this.
National lenders often penalized rural loans by raising rates and lowering LTV ratios because it was believed that rural properties could not be liquidated at prices that were high enough to cover the credit.
The trick about USDA loans is that the property has to be located in an approved USDA area. Now here’s the trick-the USDA uses its map with the data from the 2000 census. Areas that were rural in 2000 are now smack dab amid massive trends of development. Sections such as the Kyle / Buda area south of Austin; Pflugerville east of the tollway; other sections of Leander / Cedar Park; Liberty Hill; the area across from the San Antonio Dominion; portions of Comal County.
Real estate developers are nothing if not resourceful, and this loop hole is being used to the full. Paired with a LTV FHA loan of 96.5 per cent, a 100 per cent USDA makes a great partner-and a great way to sell a subdivision.
Loans are processed in the same way as an FHA loan. The credit will be issued and underwritten by borrowers approved to make and sell USDA loans. Guidelines are much more flexible so a degree of common sense underpinning exists. Loans with the USDA loan premium are then marketed to Wall Street.
For first-time homebuyers, or anyone, this is a great loan looking to move into the suburbs at extremely beneficial conditions. This is a much better program than even the past 5 years of sub-prime loans.
This is also a great loan for seniors looking to retire, buy a house and some acreage to the country.
The downside to this great opportunity is that the USDA will update their maps soon and the hot areas will surely lose their rural designation.