Greetings!
Rural America is home to about 17% (50 million) of the Nation's people, comprises over 2,000 counties, and accounts for 75% of the Nation's land. Most American's share a common image of rural, open countryside and small towns at some distance from large urban centers. However, the explosive growth of the housing market in the last decade has blurred the lines with the urbanization of areas that were formerly considered rural. Your "urban" buyer may qualify for the United States Department of Agriculture (USDA) rural loan program if they meet the guidelines. |
| USDA Rural Loan Program | |
Since last fall, the loans from the USDA have fueled much of the real estate business in some parts of the country. The USDA's Rural Housing Service manages the Section 502 program, which provides a vital source of mortgage credit for people living in rural communities. Low and moderate income individuals, and families in rural communities, often have fewer mortgage credit options than those households in urban areas.
The program aims to fill that void and lower the costs of homeownership by giving rural areas access to a home loan guarantee program. These guarantees decrease the exposure of home lenders to defaults so that they will underwrite more mortgages. In 2009, loans made under the program averaged $112,000. The program has doubled in size thanks to stimulus money, but now it appears to be a victim of its own success, largely beacuase of the generous terms offered to borrowers. |
| Finalized FHA Mortgage Insurance Changes Effective October 4, 2010 | |
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For FHA Loans taken on or after 10/4/10, the following new rules will apply:
FHA will lower its upfront premium simultaneously with the increase to the annual premium. FHA's upfront mortgage insurance premium will be adjusted down to 100bps on all amortization terms and the annual mortgage insurance premium will increase to 85-90 bps on amortization terms greater than 15 years.
The Senate approved its version of HR 5981, which allows the FHA it to hike its annual premiums for its single-family program. It allows the FHA to raise its annual mortgage insurance, raising the statutory cap rate to 1.55% from 0.55% - a flexibility that the industry and the FHA says could ultimately reduce the cost of credit insured by the FHA.
Source: US Department of HUD
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