1. USDA Rural Development Financing
It’s Easier Than You Think
Real Mortgage Partners
512.507.8312
nicole@nicolelahti.com
TX LO#69681

2. Benefits to the Buyer
• 100% financing
• Finance closing costs, pre-paids, guaranty fee
& repairs into the loan (limited to appraised
value)
• Unlimited gift funds & seller concessions
• No monthly MI
• No loan limits
• No reserve requirement

3. Geographic Limitations
• Geographic limitations – areas deemed “rural”
by USDA Rural Development

4. Income Limitations
• Income limitations – takes into account ALL
household income for people >18 years old
– Adjustments for minors, people > 62 years old &
verified childcare expenses
– Different limits depending on geographic location

5. Specific Geographic & Income
Limitations
• Go here to look-up specific property & use
income calculator
– http://www.rurdev.usda.gov/rhs/
– Click “Income and Property Eligibility”

6. Other Criteria
• No in-ground pools allowed
• Primary residences only
• Cannot own another dwelling – unless relocating
or current dwelling too small (similar to FHA)
• Cannot have own funds for 20% down-payment
• Property must be accessible from street, road or
driveway
• Land value must be less than or equal to 30% of
total value

7. Other Criteria
• If on well or septic, must be tested to meet
county requirements
• Pest inspection required and deficiencies
corrected
• Escrow for repairs under limited
circumstances & must be 150% of cost
• New construction – must have warranty

8. Myth #1: There Are No Funds Left
• RD funds not available BUT some lenders are
still funding USDA loans
• Funds appropriated yearly through Congress
• Expect new funds in March 2009
• Borrower can reserve for 60 days
• Funds have been known to run out

9. Myth #2: RD Buyers Don’t Make
Enough Money to Buy a Home
• Example January 2009:
– Two working parents with three school age
children
– Total gross income = $84,000
Income Eligible

10. Myth #3: Better Off Putting Money
Down
Sales price = $185,000 at 5.0%
• FHA 3.5% down = $1,058 ($83.19 PMI)
• RD 0% down = $1,012 (no PMI)
$46/month difference

11. Myth #4: Takes Too Long to Close
• RD loans are underwritten & funded by
normal investors
• RD office needs 24-48 hours to review &
approve file
• Normal 30 day close time

12. Questions?
Real Mortgage Partners
512.507.8312
nicole@nicolelahti.com
TX LO#69681