What You Need To Know About 100% Financing With An RD Loan
Did you know that you could buy your first Knoxville home with absolutely no money down?
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In this post, we’ll take a closer look at RD loans. We’ll cover everything you need to know about these 100% financing loans.
What Is an RD Loan?
RD loans go by a few different names. They’re sometimes called USDA home loans or rural development loans. Regardless, they’re a great financing option for first-time buyers because they offer no down payment and come with
The USDA loan program was created in the early 1990s to help improve homeownership rates in rural areas. Don’t worry, though, even though the loan program requires you to buy in a rural area, you’d be surprised to learn some of the areas that are covered by the loan program.
The loan program is available for purchases, refinances, and even financing repairs and renovations.
If you’re able to meet certain income, credit, and location guidelines, RD loans can be great for first-time loan buyers.
Next Up: Here’s What You Need To Know About RD Loans
Are you ready to buy your first home, but worry that it could take you too long to come up with a down payment? Does the cost of FHA loans make you hesitant to buy? If so, an RD loan can be a great option.
Let’s cover a few important things that you need to know about RD loans.
Can You Qualify For An RD Loan?
RD loans are a great financing option, but not all people are able to qualify for an RD loan. Here are some of the basic requirements to qualify for a rural development loan:
- The home must be bought in a designated rural area. If you’re curious of what areas qualify, take a look at the interactive map.
- The home must be a primary residence.
- Principal, interest, taxes, and insurance must not exceed 28 percent of the gross monthly income.
- Monthly debt cannot exceed 41 percent of a gross monthly income.
- The minimum credit score to qualify
- The borrower must meet the income
guidelinesbased on the county and family size.
To see if you can qualify for an RD loan, be sure to talk with a local mortgage expert before starting your home search. If you’re buying with an RD loan, you’ll be required to buy in a specific area.
Not A First-Time Buyer? No Problem.
RD loans are a fantastic loan for first-time buyers. But, did you know that you don’t have to be a first-time buyer to get an RD loan?
Yep, you read that right. RD loans are available to all buyers who are able to qualify for RD loans. So if you’ve previously owned a home and meet the requirements, you can also use an RD loan to buy your next home.
Just keep in mind, if you currently have an RD loan on your current home. You’ll need to sell that home before you’re able to qualify for a new RD loan.
Worried About Buying In A Rural Area? Think Again.
Are you worried about having to buy a home in a “rural” area? If so, do not fret. There are many great parts of Knoxville that are included in the RD map.
To be sure of which areas qualify, be sure to check out the RD map. You’ll be happy to know there are parts of Hardin Valley, Karns, Powell, Lenoir City, Seymour, and Clinton included on the RD map. These are just a few of the areas that are included on the map, so be sure to take a closer look. You’ll be happy to know there are many great location options.
RD loans are a great loan option for those who are able to qualify. There are limits on how much a borrower is able to make in order to qualify for a loan.
Bottom Line : Great Loan For First Time Buyers
RD loans are a great option for first-time buyers. They allow buyers to get into a home with no money down, come with a lower interest rate, and offer flexible underwriting guidelines.
Are you thinking about buying your first Knoxville home for sale this year? If so, do not hesitate to give Knoxville Home Team a call today. Rick can be reached at 865-696-9002 or via email at Rick@KnoxvilleHomeTeam.com. Kati can be reached at 865-696-1888 or via email at Kati@KnoxvilleHomeTeam.com. We’ve helped countless first time buyers find the perfect home for them and we’d love to help you do the same!