The Definition of Rural for USDA Home Loans

The House of Representatives are considering a bill that will “renew” the Farm Bill.  Unlike the Senate bill to fund the USDA – the House version does NOT tackle the question of USDA Home Loans and the new “definition” of Rural.  That’s unfortunate.  The Real Estate “Housing” recovery is not in high gear – and this program change could cause further HARM to home sales in NC.

The USDA RD Program is at a critical point – with mixed signals about it’s future.  There are over 500 communities that grew between the 2000 and 2010 census that could be determined as ineligible for the program.  That about 9.1 million people or approximately 8% of the population that currently lives in an eligibile area – that would not longer have access to the program.

One study notes that:

Approximately 90 percent of these potentially ineligible places are located in metropolitan areas, where towns must have populations below 10,000 to be eligible. Not surprisingly, while they are scattered around the country, clusters of these growing exurbs are particularly noticeable in metros in California, Florida, and Arizona. Rural housing producers have invested time and money in planning developments in some of these places, and we can safely assume that many of them need more affordable housing.

At the base issue, no one in Congress seems willing to tackle legislation that would raise the population thresholds for all rural housing eligibility determinations – this close to an election.  Because of that, and the fact that population limits for USDA’s rural housing programs are not the same as for its business or utilities programs, it’s not surprising that the General Accounting office in Washington suggests that there needs to be a more “consistent” definition of Rural.  Again, we question the TIMING of the change to the program, given the Economic “recovery” that the Fed says is so fragile.

USDA Loan FAQ’s

Whatever rural is, we can agree on a sliding scale where the smaller the population the more rural a place is. A town of 5,000 feels different from a small city of 30,000. On that sliding scale, the farther a place is from a population center, the fewer resources are available to it and the more difficult housing development is.

It’s also understandable that larger towns and small cities would like to have access to a new pot of funds. USDA funds are already stretched thin, however, and getting thinner. Increased competition for a shrinking pie is likely to draw USDA housing funds to the places with larger populations, where housing development is generally easier than in remote rural areas.

So in determining the future of the USDA Rural Development program – Congress must decide if they want to DERAIL the program that is currently funding at least 1/3 of all homes sold in NC right now ??  If the USDA Home Loan program is determined to be INeligible to areas “close” to a MSA – then anyone living in the Raleigh, Johnston County area will not have access to the program.  Ditto for Greensboro, Winston, Charlotte… it’s a pretty long list!

If you have questions about OTHER no money down programs available in NC, please call Steve and Eleanor Thorne 919 649 5058 – we do many no money down loans, and offer today’s best rate!  Connect with us on Facebook or G+ for updates!

Originally Posted at NCFHAExpert.com

DURHAM NC Maps for USDA Home Loans

We’ve had several people interested in obtaining a USDA home loan for property in Durham County.  I’ve put together a couple of maps that should help in identifying areas that qualify for this program.  As you might know – it’s one of the last TRUE 100% home loans available – and it has very low PMI!  The rates are comparable to FHA, so it’s a very affordable payment!  You do not have to have PRISTINE credit, but we generally want to see scores above 600, and 12 months of “clean credit.”

USDA does require that the property be located in a less populated area.  It does not need to be a farm – but it can’t be located downtown either.

The “darker” areas do NOT qualify.  However, as you can see – the Northern sections of Durham County have the most opportunity for this type of financing.  Here’s another map that does a close up of that area.

If you are interested in property in this area and would like to see if the address fall within the USDA “footprint” click here.  I also did another map of an area near Leesville Road on the Wake County, Briar Creek side of Durham.  Frankly – I didn’ t know that this area qualified!

So – THE TIME IS RIGHT!  We have many properties on the market, we have MONEY TO LEND, and mortgage rates are really low!  If you are looking for a home in another part of NC that might qualify for USDA home Loan financing – For a list of communities that could see CHANGES to the maps starting at the end of March 2013 click here .

This is the time to buy a house with no money down in Durham with a USDA loan! (a couple of different North Durham Maps) To see if your household income qualifies for this very low PMI loan, please click here or call Steve Thorne 919-649-5058 we know this program inside and out!

Originally Posted at NCFHAExpert.com