Recovery Act Funding through USDA Rural Development is Creating Homeownership Opportunities for Vermonters

Posted August 7, 2009

USDA Rural Development has abundant mortgage funds available!

             Montpelier, VT, August 6, 2009 - With a no down payment requirement, and payments based on income, the affordable rates and terms offered by USDA Rural Development’s homeownership Single Family Housing Direct and Guarantee Rural Housing Loan programs has helped over 270 Vermont individuals and families to buy their home in 2009.
 
            If you have a reasonable credit history, and the ability to afford a mortgage payment, you too are a candidate for a USDA Rural Development homeownership loan. With the help of funding provided by the American Recovery and Reinvestment Act, eligible homebuyers can become one of the more than 50,000 Americans realizing their dream of homeownership.
 
            Since 1949, USDA has worked to increase homeownership opportunity for rural Americans through a combination of guaranteed (by participating lenders) and direct loan funds. Working with private and non-profit lenders, homeownership centers, and real estate brokers throughout the state, USDA Rural Development has been a leader in forging the path to the homeownership experience for Vermonters.
 
            Recovery Act homeownership funds remain abundant. USDA Rural Development is encouraging homebuyers with low to moderate income to consider using one of its lending products to realize their dream of affordable homeownership. “USDA Rural Development’s homeownership programs are reaching milestones this year. We have assisted over 270 Vermonters to become homeowners to date, and we hope to assist many more,” said Robert McDonald, USDA Rural Development Housing Program Director. “Eligible homebuyers could be opening the door to their new home in mere weeks by taking advantage of one of our two lending products.”           
           
            Homebuyers with adjusted incomes ranging from $34,350 to $60,100 (for household of 4) in most counties will fall below the established income eligibility guidelines for USDA Rural Development’s Single Family Housing Direct Loan program. Some income adjustments, such as day care expenses or larger family sizes (5 or more) for higher income applicants may help them qualify. The program offers a 33-year term at a fixed interest rate, which is currently at 5.125 percent, but can be as low as 1 percent with payment assistance subsidy to qualified applicants. 
           
            Direct Loan Program applicants must have the ability to afford the mortgage payments, including taxes and insurance, which are typically 29 to 33 percent, or less, of an applicant’s income.
 
            Higher income households can qualify for USDA Rural Development’s Guaranteed Rural Housing Loan program, which can be obtained through participating lenders throughout the state.
 
            Homebuyers, with adjusted income up to $86,400 (1-4 person household) to $114,050 (5-8 person household), in most counties will fall below the established income eligibility guidelines for USDA Rural Development’s Guaranteed Rural Housing Loan program. Like the Direct loan program, some income adjustments may qualify higher income families. Rural Development guarantee loans are generally to homebuyers with an average adjusted income ranging from $40,000 to $80,000.
 
            With a fixed rate and 30-year term, these loans are backed by the Government, therefore eliminating the need for private mortgage insurance. This gives homebuyers more buying power. The interest rate varies by lender, and the rate is locked-in between the buyer and lender at time of application.
 
            Eligibility requirements for each Program are:
°         Direct Loan applicant’s income must be below 80 percent of the median income for the area, and Guaranteed Loan applicant’s income below 115% . See USDA’s web site http://eligibility.sc.egov.usda.gov/eligibility/ for income eligibility by household size and county.
°         Direct Loan Applicants must be unable to obtain credit elsewhere at reasonable rates and terms.
°         For both Programs, applicants must demonstrate ability and willingness to meet credit obligations, and
°         Have a stable and dependable source of income.
 
            Property, income and purchase price guidelines for these programs can be found on USDA’s web site http://eligibility.sc.egov.usda.gov/eligibility/ .
 
            In both lending programs, single family, owner-occupied homes can be financed for up to 100% of the appraised value.
 
            SFH Direct Loan program applicants apply directly to USDA Rural Development with offices throughout Vermont or contact your local lender for a Rural Development guarantee loan. Visit us at www.rurdev.usda.gov/vt or contact the Area Office at:
 
Brattleboro Area Office – Serving Bennington, Rutland, Windham, and Windsor counties
 
802-257-7878 ext. 108
Montpelier Area Office – Serving Addison, Chittenden, Grand Isle, Franklin, Lamoille, Orange, and Washington counties.
 
802-828-6005
St. Johnsbury Area Office – Serving Caledonia, Essex, and Orleans counties.
802-748-8746 ext. 119
 
President Obama signed Recovery Act into law on Feb. 17, 2009. It is designed to jumpstart the nation’s economy, create or save millions of jobs and put a down payment on addressing long-neglected challenges so our country can thrive in the 21st century. The Act includes measures to modernize our nation’s infrastructure, enhance energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief and protect those in greatest need.
 
More information about USDA’s Recovery Act efforts is available at www.usda.gov/recovery. More information about the Federal government’s efforts on the Recovery Act is available at www.recovery.gov.
 
USDA Rural Development’s mission is to increase economic opportunity and improve the quality of life for rural residents. Rural Development fosters growth in homeownership, finances business development, and supports the creation of critical community and technology infrastructure.