Click below to listen to KMZU’s Ashley Johnson speak with USDA Rural Development Area Technician out of the Chillicothe office, Shelby Leakey:
The USDA’s Rural Development office has recently announced a decrease to 3% interest rate for the Single Family Housing Direct Loan program. That puts these rates at an all-time low. “The program is a 33 year fixed rate note with no down payment required,” Leakey explained the loan, “In most cases the government can also offer subsidy on these payments which means the government would make a portion of the payment and so the effective interest rate may be as low as 1% for as long as you own the home.”
While the make-up of the loan program is intriguing, there are few requirements’ you will need to know. “You would have to meet income guidelines for the county that you are wishing to live in,” said Leakey, “Also demonstrate repayment ability for the home that you are wishing to purchase. We are also looking at credit history; you have to have an acceptable credit history.” A stable income is also required with at least 2 years with your current employer.
For people with a less than perfect credit score, don’t let the credit history portion of requirements scare you off, your score is not what will be examined. “In a nutshell,” Leakey breaks it down for prospective buyers, “What we’re looking at on credit is that you haven’t had a bankruptcy in the past 3 years, that there aren’t any judgment’s on the account, and we want to see a history of re-paying collections if there are collections on there. As far as re-payment, we’re looking at a debt-to-income ratio. Obviously you’ll have to have enough income left over at the end of the month to afford a home payment. The ratios that we are looking at are 41% of total income for debts, including the home payment.”
Questions and more information can be found at rd.usda.gov or by calling Shelby Leakey at 660-646-6222 ext. 4