Brandon's Mortgage News

A few weeks ago, the national office of the USDA Rural Development program released information that their funding was scheduled to be exhausted sometime in April of this year.  Increased demand for the program from first-time and move-up buyers, along with some changes with income limits that made more households eligible for the program, this has caused the funds to be depleted faster than normal.

With this program being one of the only true 100% financing loan programs, what's going to happen next? 

The VA Loan, loans that most veterans are eligible for, is the only other true 100% loan program.  However, as a percentage of potential buyers in the marketplace, very few have this option.

This leaves the Step Up Loan from Alabama Housing Finance Authority (AHFA).  This loan can be used in conjunction with an FHA loan and it provides down payment assistance to qualified borrowers.  FHA loans require 3.5% down payment, and AHFA will provide 3% of that amount and allows the buyers to finance that amount over 10 years.  This leaves the borrower only bringing 0.5% down payment.  If the buyer needs closing costs assistance, they can usually ask the seller to pay most if not all of these fees.  FHA currently allows the seller to pay up to 6% of the contract price, but has been rumored to change by early summer, and that amount would be reduced to 3%.

Currently, the basic guidelines to be eligible for this program are as follows:

• Household income less than $97,300
• Minimum FICO score of 620 for primary wage earner
• Maximum debt-to-income ratio of 45%
• Borrower(s) must be purchasing a primary residence

Consumer First Mortgage is one of the exclusive lenders for this program.  If you'd like more information on how you may qualify for this program, please don't hesitate to call or email me.

Brandon Snider
District Manager
Consumer First Mortgage, Inc.
Phone: (256) 586-5626
Direct: (256) 694-7514