High loan to value loans are still available - call your lender and ask about them. In that conversation remember to ask about the USDA Rural Development Guaranteed Housing loan. The facts about this loan program may seem too good to be true, and yet they are real. We recently closed one.
Consider the highlights: There is no ceiling for the loan amount - it is based solely on appraisal and payment capability. The loan can go to 102% of appraisal (the last 2% being the Guarantee Fee). Income used is adjusted gross. The income maximum for a family of five in Douglas County is a generous $89,650, and is adjusted according to family size. This is "rural' loan guarantee product and is avalalbe in Douglas County, Lyon County, Churchill County and Storey county ... it is not available for Washoe and Carson City Counties.
The ratios are more lenient than other loan programs, and even those can be exceeded with compensating factors such as zero or little payment shock, 660+ credit score, 2+ years on job, and more. You don't need explanations for late payments with a 660 or better credit score. You can be in the 500's and get a loan. Credit blemishes can be okay depending on other factors. If you don't use credit you can qualify using non-traditional methods such as utility, child care, insurance and rental payment records. There is no Mortgage Insurance, just a one-time Guarantee Fee that can be financed, a huge savings from PMI premiums.
Additional parameters: You need not be a first time home buyer, in fact you can own a home that you are selling if you close escrow before you close on your new one, i.e.- close on one and buy the new one the next day. You can purchase a new stick built, modular or manufactured home. It is not available for resale manufactured homes. Douglas and Lyon Counties qualify, but the loan is not available in all communities. If you qualify for a conventional 80% loan to value loan (where you put 20% down) you many not participate in this program.
Here's how it works - you apply for a loan with a lender or mortgage broker that offers this loan. The lender will review and approve your loan package before sending it to the USDA. The USDA will review your package and make a decision within 48 hours unless the property is over 50 years old in which case you must add 30 days for review as it must be approved by the Nevada State Historic Preservation Officer for historic significance. Once approved - it is funded. It's that simple. With the leniency of the USDA requirements, and the fact that the USDA is guaranteeing the loan to the lender, it is hard not to get your loan approved.
Our Advice: If you are looking for a low or no down loan seriously consider this program. We have never seen a loan program with so much flexibility. The USDA representative we met provided so many illustrations of variances that it is clear they seriously want to make loans to get people in homes. Interest Rates? They are very competitive. Remember the gap in this loan - something nobody else allows. The loan amount is based on the appraisal amount unlike traditional loans that are based on the lower of either the purchase price or the appraisal. If the home appraises for more than the purchase price you can borrow the higher amount and use the "gap" money for closing costs, repairs, etc. Good loan ... good prices ... good time to act! Call a lender and start talking about your situation and this loan program - you will surely be delightfully surprised.
Thank you Jennifer Morrison, Mortgage Consultant, Greater Nevada Mortgage Services, 783-7591, for sponsoring an informative class on this special loan program. This is a unique product in a unique Market that will allow many people to buy homes that would otherwise be sitting on the sidelines in these exciting times.