Many people who never thought they could own a home may now have an opportunity.
The United States Department of Agriculture (USDA) Rural Development Wisconsin State Director, Stan Gruszynski, recentlyannounced the availability of funds for Homeownership Loans to rural Wisconsin residents. As a result of increased funding through the American Recovery and Reinvestment Act (ARRA), USDA Rural Development has more than $30 million available in Direct 502 home loan funds to spend by 9-30-2010 to help Wisconsin families “As we approach the fiscal year mid-point, we are initiating a campaign that is designed to promote full obligation of American Reinvestment and Recovery Act (ARRA) and FY 2010
annual appropriations by this date” says Gruszynski. “With these funds, Wisconsin can assist nearly 350 more families become successful homeowners yet this year.”
USDA Rural Development offers home loans with no down payment and low interest rates for qualifying applicants in rural communities. The Direct Homeownership Loan Program provides for a long term fixed interest rate, which is currently 4.875 percent.
Mortgage payments are adjusted according to household income; therefore, the effective interest rate paid by the homeowner may be further reduced through interest rate subsidy to qualified applicants. Housing Program Director, Dave Schwobe, in the Wisconsin State Office, said that applicants may actually be able to pay a total monthly house payment, including taxes and insurance, for less than what they are currently paying for rent.
Last fiscal year, USDA Rural Development provided more than $23.5 million through this loan program to rural Wisconsin households for home purchases. Individuals or families must be within income guidelines that are established by county. For example, a four-person household in many counties in Wisconsin cannot exceed $46,800; however, some counties may have higher income limits.
Properties eligible for USDA Rural Development financing must be located in rural communities, which are those communities with a population of 20,000 or less.
You can visit the Agency eligibility website at http://eligibility.sc.egov.usda.gov to determine whether you are within the established income limit based on the size of household and county and if the property is located within an eligible area.
Maximum mortgage limits apply for home purchases from $153,000 to $273,000 in Wisconsin, depending on the county. Potential home buyers must have a stable source of income, meet repayment guidelines and have an acceptable credit history. Although there is no minimum credit score, applicants with a 640 credit score or higher receive streamlined credit reviews. Also, applicants must be unable to obtain other conventional financing, including the USDA Guaranteed Program. Households interested in the Direct Homeownership Loan Program should contact their local USDA Rural Development office. Visit www.rurdev.usda.gov/wi for more information or to locate the office nearest you. Contact USDA Rural Development at, 1-866-474-3600, 4949 or RD.SFH.SO@wi.usda.gov.