The Guaranteed Rural Housing program is a great way for first time home buyers and those with blemished credit to purchase homes with no money required for down payment or closing costs.Unlike traditional loan programs, the Guaranteed Rural Housing program allows the borrower to obtain a loan equal to the appraised value as opposed to the sales price of the home. If the appraised value is greater than the sales price, the increased loan amount can cover costs such as closing costs, home repairs, or other monies previously paid by the buyer.
This loan program also boasts the lack of costly private mortgage insurance. Instead, every borrower under this program contributes a one time funding fee which can be financed on top of the sales price of the home. In addition, this loan program is not credit score driven. Someone with past credit problems or no credit history can obtain this loan with little effort or no effort on their part.
USDA and GRH loans are a great way for borrowers with moderate income and in qualified areas to purchase their first home.
USDA loans are excellent since they are one of the very few remaining true 100% LTV programs available. Also the ability for the seller to contribute up to 6% toward closing costs means the buyer can still buy a house with virtually no money out of pocket!
