Posts Tagged ‘RD Loan’

We Should Talk

October 19, 2010

Unless you have been living under a rock for the past 18 months you know that interest rates on home loans have been at historically low levels.  The bad news is that you also know the effects the market has had on the value of your home.  Many homeowners feel they have few options available.  How can you refinance your home to take advantage of these great rates when your home’s value is less than before?  Well before you decide that living under a rock now sounds appealing, we should talk.

If you have taken care of your credit by paying your bills on time, watching your credit card balances and not overextending yourself there are options.  No, these are not crazy loan programs set to self-destruct in 3 years time.  We are Awareness Home Funding, we only offer solid loan programs that actually make sense and benefit you.  These are programs with exactly you in mind – designed to reward you for your efforts and good behavior.

We have programs to refinance Conventional, FHA and RD loans that allow borrowers to take advantage of the historically low interest rates without the need for a new appraisal of your home to be completed.

Here are the basics:

  • You need to live in the home you are refinancing. 
  • This cannot be a second home or an investment property.
  • You need to be current on your mortgage right now.
  • Your personal credit needs to be in good shape.  (We can help you get a complete credit report and score at no charge.)

If this sounds like you, we should talk.  We can help you determine the specific qualifications so you can make an informed decision without pressure, confusion or cost. 

Call us today at 866-982-9273.

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RD Loans – A Great Option to Consider

February 5, 2010

An RD loan is a Rural Development home loan offered by the Rural Housing Service specifically for moderate to lower income residents buying homes in rural areas.  A rural area is defined as a community with a population of 10,000 residents or less.  Although some communities located outside of a metropolitan statistical area can qualify with populations up to 20,000 residents. 

In plain English this means if you would like to purchase a home in an area that is not a large city there is a program available.  For most, when you initially think of what a rural area is you might envision acres of farmland or large acreage properties where your neighbor is a mile away.  Not so.  In many instances rural areas are just outside of major cities.  In fact in the state of Michigan, more areas qualify for rural status than areas that do not.  Many of these areas are cozy suburban towns with close knit neighborhoods and strong local schools. 

Another point to note is that the RD loan program cannot be used to purchase or refinance farms or large acre properties where the land far out values the home.  This is a program for consumers who meet the typical credit requirements of obtaining a home loan.  They are just in a slightly lower income bracket and do not have enough funds on hand for a 20%+ down payment.  If this isn’t a program that helps the “little guy” I don’t know what does!  The largest advantage of RD loans is that they currently remain one of the last true “zero down” home loan options.  (VA loans are the other zero down payment option.)

The basic guidelines for an RD loan include:

  • Loans may be used to purchase a single-family, primary residence.
  • On a refinance, the existing loan must already be an RD loan.
  • A borrower must lack sufficient resources to provide a down payment for a conventional loan (typically 20-25% of the purchase price).
  • The RD loan allows a borrower to finance up to 100% of the appraised value of the home without requiring private mortgage insurance. 
  • A one time funding fee is charged and may be financed as part of the loan.  (For purchases, 2% of the loan amount is charged.  On refinances, the fee is .5% of the loan amount.  See you Home Loan Specialist for specific details.)
  • The property must be located in a designated rural area, have all-weather street access, and have approved water and waste systems.
  • The value of the site may not exceed 30% of the total appraised property value.
  • Sellers may contribute up to 6% of the purchase price toward closing costs and pre-paids.
  • Gift funds are allowed.  (Consult a Home Loan Specialist for specific criteria.)
  • Currently, only above ground pools are allowed with RD loans.
  • The property may not be active farmland.

With comparable interest rates, high LTV (loan to value) allowance and no monthly mortgage insurance, RD loans provide a great option to home buyers who may have thought they could not qualify for a home loan.  Talk with one of our Home Loan Specialists (866-982-9823) about the specific details and how this program can work for you.