Some Mortgage Loans Are Still Zero Down

Consumers may believe that with the recession, the bursting of the real estate housing bubble, and the mortgage crisis, zero down mortgage loans are thing of the past. They are not, but these mortgage loans come from a place you wouldn't think of: the U.S. Department of Agriculture (USDA).

USDA loans are, like FHA and VA mortgage loans, loans guaranteed by the U.S. government. However, USDA loans not not well known among consumers, and even among many lenders and mortgage brokers.

The USDA mortgage loan can be qualified for with a credit score as low as 620. Financing to pay for repairs or needed improvements to the property can be included, meaning you can borrow up to 102 percent of the improved value of the property.

Additionally, USDA mortgage loans are fixed rate only. There will be no confusion over which type of mortgage a buyer will get.

Finally, there is no PMI (private mortgage insurance). PMI is normally required for mortgages with a down payment of less than 20 percent. In the case of USDA mortgage loans, instead, the borrower pays an upfront fee equal to 2 percent of the loan amount. PMI typically has an annual cost of about one-half of one percent of the loan balance, which means in 4 years that upfront fee is paid off, and everything else is a plus.

Of course, it's not as general as other loans. The USDA mortgage loans are for "rural development." That does not, however, translate into farms. To be exact, rural means small communities of up to 10,000 people. The USDA offers detailed maps of qualifying areas on the USDA Rural Development Income and Property Eligibility web page.

While not all mortgage brokers or lenders are aware of the program, you can find plenty of USDA mortgage loan specialists by simply "Googling" on the Internet. If the property you have in mind meets the restrictions of the program, don't forget to check out these USDA mortgages.

Written by Michael Santo
HULIQ.com