Physician Home Loans

Question :

We are looking to buy a condo in NJ and a mortgage broker told us, we may qualify for a USDA Rural Mortgage. To get a conventional 30 year mortgage, we were told, we must put 20% down. We don't have 20%. Our income fits the guidelines and the place is eligible. How much of a down payment do we have to make and what are the interest rates? Can anybody explain how this works?

Answer :

The USDA Rural Development loan will lend you 102% of the purchase price, and you can add seller paid closing costs to the purchase price to get into a home for nearly nothing out of pocket.

There is a 2% funding fee, so, on a $100,000 home purchase, USDA would charge $2,000 (which is why you are allowed a 102% loan) - or - $102,000 loan for a 100k purchase.

The rates are comparable to FHA/VA rates. Make sure, you put 3.5% or more down payment and let the lenders know that, you prefer that, your property is eligible for RD, and ask them to adjust their quote manually. I would expect any lender offering FHA will also have RD available.

Date: May 23