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USDA Zero Down Loan Program to Return


The USDA’s zero down loan program is slated to make a comeback, thanks to legislation making its way to President Obama’s desk.

The measure was part of H.R. 4899, otherwise known as “The Emergency Supplemental Appropriations Act,” which the Senate passed last week.

It increases the Rural Housing Service (RHS) commitment authority allowing guaranteed loans and making the program completely self-sufficient; previously, the RHS provided conditional commitments.

However, it increases the guarantee fee for borrowers to 3.5 percent, though that too can be rolled into the loan.

“This is going to be a great lift for thousands of rural home buyers who need to close on their home purchases before Sept. 30 to take advantage of the home buyer tax credit,” said NAR President Vicki Cox Golder, in a statement.

“Many rural families would have been left out in the cold without these guaranteed loans. Increasing the commitment authority will help rural families, support local housing markets, create jobs and generate new tax revenues,” she added.

New guidelines are expected to be released after the President signs the bill.

Currently, the USDA home loan program is reserved for families in rural areas with incomes of up to 115 percent of the median income, who are without adequate housing, but able to afford mortgage payments.

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