For many Americans, owning a home is just a dream. But some low income families and individuals may qualify for a home loan built just for them.
June is National Home Ownership Month. And if you've ever thought about buying a home, but you didn't think you could qualify based on your income or maybe you don't think you could afford to get a nice home, USDA Rural Development says you might think again.
USDA Area Specialist Jeff Seefeldt says he wants would-be home buyers to know that the USDA has loans available if you meet certain income guidelines.
He says the interest rate can be lowered based on your income, but it would never go above the set rate when you close on the house.
"This is definitely about the only program available that will help people that don't typically qualify for a normal bank loan," said Seefeldt. "The no down payment, no mortgage insurance, the reduced interest rate."
The USDA says its Direct Loans offer interest rates as low as 1% for qualifying families and individuals and they require no down payment and the ability to borrow your closing costs and appraisal.
The Direct Loan program is only available in rural areas and smaller cities, so you couldn't buy a house in Quincy city limits. But a family of four in Adams County making less than $47,500 a year would qualify to buy or build a home up to $167,000.
And even if your income is higher than that, a family of four making less than $74,750 annually can still qualify for the USDA Rural Development Guaranteed Loan. But you would have a down payment on that one.
For one family, this loan is the difference between owning its own home and renting. For others, it means buying more house for the money.
Broker Glenn Swick with Century 21 is working with one such family and he says this loan allows his client to buy a much nicer home than she could with a conventional bank loan. And with very little out-of-pocket cost up front.
"She doesn't have a lot of money up front," said Swick. "USDA works very well for buyers like that. It also in this particular program offers her a subsidy that allows her to buy more home now than she would later."
"A family making $30,000 a year can buy a $167,000 house and I don't think very many people making $30,000 could walk into a bank and borrow that same amount of money," said Seefeldt.
If you're interested in getting approved for this program, the first thing you need to do is contact your local USDA office.
They will give you some paperwork to fill out to see if you qualify. Once you're approved you can start shopping.
The USDA is working on a limited budget.
Seefeldt says it does uses up the funds every year, so if you're thinking about taking advantage of this program this year, he says you need to act fast.