Homeownership is a goal for many Arkansans. However, the process and all the different financial factors to consider can be overwhelming to many of us. Watch as Rich Allensworth, loan officer at Rock Mortgage, joins Good Day NWA with some mortgage-related tips.
One area that might be particularly difficult for people to navigate when it comes to home shopping is all the different types of loans out there.
What can you tell us about this program and how it works for Arkansans?
I am going to give you my top-3 things to remember about USDA loans. Nearly half of house renters said a major obstacle to buying a home is not having enough money for upfront costs, like a down payment. So, the first thing I would like to tell you about USDA loans is they are zero down, opening up homeownership to a lot of people who might not otherwise be able to achieve it. Nearly half of house renters identified upfront costs as a major barrier to owning a home.
Some might assume because they are called RD or “rural” loans, they are limited to folks who live outside the city limits. But you say that is not the case, right?
That is absolutely not the case. If you look at the USDA eligibility map, a lot of areas of the state are eligible for these loans. The only places that are not eligible are the state’s larger metro areas. And even there, you would be surprised by how close you can get to the city and still be eligible for one of these loans. For example, there are areas that are eligible for rural loans that are a 5- or 10-minute car ride from Northwest Arkansas Mall. So, the second thing to remember about USDA loans is this: don’t assume your property is ineligible. These loans are potentially available to a lot more people than some may think — and they are also not restricted to first-time homebuyers. Check the eligibility map on the USDA rural development website, rd.usda.gov.
You’re telling us participation in this loan program is dependent on where your property is located. What are some of the other restrictions for USDA loans?
To be eligible you must make the property your primary residence. This program is not for investment properties. There is also an income limit. But, again, do not assume anything, because you might be surprised by how high the cap goes depending on your circumstances. The maximum income limit is state specific. Refer to the USDA Limits chart on their website. Many Arkansans are eligible.
You’ve given us some helpful information here so far. What is number 3 on your list of things to remember about USDA home loans?
USDA loans may or may not be right for you and your situation. Another type of loan might be a better fit. There are many factors, risks and benefits to consider. First and foremost, consult a knowledgeable lender to help you navigate the process, based on your financial situation, your priorities, market conditions and also the various products and programs out there. This is what I do all day every day, and I love it. In particular, helping people who didn’t think they could purchase a home really means a lot to me. There are many factors, risks and benefits to consider. First and foremost, consult a knowledgeable lender to help you navigate the process.
Every situation is different and you want to get a knowledgeable lender who will support you and guide you through the process to find the right mortgage for your specific situation.
For more information, visit www.rockmortgagelending.com or call 479.321.3355.