100% Financing USDA Loans for New Construction

Ransom Kelly at Assurance Financial has helped many residents of Birmingham Alabama secure home loans for new construction. Today we are here to tell you about how USDA Loans are a wonderful program to pay for building your dream home. Loans from the United States Department of Agriculture (USDA) are well known for benefits like having no down payment requirement with the 100% financing option.  This way, you can make the dream of home ownership more affordable. New construction homes can qualify for USDA financing—and this week we are here to tell you how. You can also call the Birmingham offices of Assurance Financial for more details.

Obtaining 100% Financing USDA Loans

The USDA home loan program helps make home ownership more affordable for many low and moderate-income families seeking to buy a house in eligible USDA Loan areas. Many people carry a misconception that USDA Loan programs are only for very remote areas; however, many places in the United States qualify as USDA-eligible regions. USDA loans can help pay for new construction homes or finance an existing home. Here are some of the basic eligibility requirements:

  • The home must be located in a USDA-eligible lending area;
  • The buyer must be of low-to-moderate income for the area (below 115% of the Area Median Income (AMI) for your County);
  • The buyer must have US Citizenship or Permanent Residency;
  • The monthly mortgage payments must be affordable for the buyer; and,
  • The buyer must have a minimum credit score of 620.

When you go to secure a mortgage, the lender may have additional requirements than those listed above. In addition, if you are over income, you may be able to deduct for certain criteria.

Benefits of USDA Loans

There are numerous benefits with the USDA Loan program—most people typically pay less than with an FHA Loan. Here are some additional benefits:

  • Low mortgage rates and low costs for mortgage insurance;
  • Financing may be available for 100% of the sales price;
  • Closing fee costs can be rolled into the loan; and,
  • Easy and streamlined qualification processes are available.

USDA New Construction Loans

Contrary to what you may believe, USDA Loans will pay for new construction. In fact, new construction homes may meet the health and safety standards set by the USDA more easily than a pre-existing home. If you obtain the USDA Loan for construction, then the lender may have more say on the contractors that you use to build the property. The loan may operate as a construction-to-permanent loan. This means the lender may issue payments as the work on the home is completed. In addition, if you are approved for more construction funding than is required, then the lender can apply the extra funds remaining to the principal balance of the loan.

Ransom Kelly at Assurance Financial is a trusted expert here to help you realize the dream of building your new home with the 100% financing USDA Loan. Contact our Birmingham, Alabama offices today for assistance!