This 100% loan program For PRIMARY HOMES ONLY requires NO second mortgage. In order to finance the full 100%, there is a 2% funding fee that is financed into your home loan. This loan will allow the borrower to finance up to 102% of the appraised value.
There is a very Low Monthly Mortgage Insurance payment included in your payment.
FHA Scenario vs USDA Scenario
FHA Purchase Scenario:
Jane wants to purchase a $200,000 home by obtaining a FHA 3.25% - 30 year fixed rate loan. Jane must have a credit score of 640 or higher to obtain the 4% rate (620 scores will receive 3.75%). FHA requires that Jane put down a minimum down payment amount 3.5% of the sales price. 3.5% of $200,000 equals 7,000 that Jane will need to pay at closing. With FHA, there is a 1.75% "Up Front Mortgage Insurance Premium" (funding fee) that is added to the loan amount. So, Jane's monthly mortgage payment (principle and interest) will be $881.82, taxes of $225, home owner's insurance of $120, and mortgage insurance of $201.04.
Finance up to 102% of appraised value (not the sales price). Primary Homes Only
Very Low monthly mortgage insurance
Middle credit scores at or above 620
Middle credit score below 620 for Co-Borrow is Acceptable
Interest rates in the 3.5% Range
No loan limit
6% seller concession
Jane's total payment will be $1427.82 with a minimum of $7,000 out of pocket
USDA Purchase Scenario:
Joe wants to purchase a $200,000 home by obtaining a USDA 3.25% 30 year fixed rate loan. Joe only needs a credit score of 620 or higher to obtain the 3.5% rate. USDA does not require a down payment. With USDA, there is a 2% "funding fee" that is added to the loan amount. So, Joe's monthly mortgage payment (principle and interest) will be $887.82, taxes of $225, home owner's insurance of $120, and $66.28 Mortgage Insurance.
Joe's total payment will be $1,298.20 with NO cash out of pocket