[This article first appeared in the Chattanooga Times Free Press]
Q: I was told there is 100 percent financing available for homes in areas that are considered rural. Is this so?
A: Yes! The federal government, through a program with the USDA, has 100 percent financing available for homes. When most people think of the USDA, I would imagine they don't think the USDA can assist you getting into your next home. But, they can. The USDA has a Rural Housing Development Program that is charged with providing 100 percent mortgages in rural areas of the country.
In the Chattanooga area, over 80 percnet of the area of the Georgia counties of Catoosa, Walker and Dade are eligible for the 100 percent mortgage program as rural areas. In Hamilton County, the eligible rural areas includes Soddy-Daisy, Lakesite, Sale Creek, Birchwood, Collegedale, Apison and other outlying areas north and east of Chattanooga. Not all of the USDA eligible ruralareas would be considered to be exactly "rural" by most of us.
Location is just one of the few requirements that exist to take advantage of this incredible opportunity. Combined household income is another requirement. But, manybuyers fall under the income guidelines. In the Chattanooga area, the household income limit for a 1 to 4 person household is $73,600 and for a 5 to 8 person household is $97,150. Families must be able to afford the mortgage payments and must have reasonable credit histories. Loans are for a 30 year term.
Homes financed under the program must be modest in size, design and cost. Also, there are building and site standards required. Manufactured homes can qualify with additional requirements. USDA will require an inspection of the property to determine if it meets the program's requirement.
Also, in addition to the USDA 100 percent financing program, buyers can be qualify for the first time buyer tax credit of up to $8,000 or trade-up buyer credit of up to $6,500. The tax credit program will end in April of 2010. Buyer should act now to take advantage of both programs -- 100 percent financing and cash back from tax credit. Buyers interested in learning more should contact a Realtor.
Get answers to questions you might have about real estate from Randy Durham, who is a broker with Keller Williams Realty. He also serves as president of the Chattanooga Association of Realtors. His column appears weekly on Tuesdays. Send your questions to Business Editor John Vass Jr. at firstname.lastname@example.org.