Rural Development or RD loans are great zero down payment loans
Income Limits and Geographical Restrictions Apply
–The Quick Reference Guide will show you the income limits and geographical restrictions in New Hampshire
— No Sales Price or Loan Limits to worry about
Low upfront cash needed for Rural Development loans
— No down payment is required
–Seller can pay all closing costs and prepaid expenses associated with a purchase but this needs to be negotiated into the contract and is limited to the lesser of actual expenses or 6% (whichever is less)
Qualifying for a Rural Development loan
— Minimum of 620 credit score required by Merrimack Mortgage Company for RD loans
— File runs through GUS (RD’s “Guaranteed Underwriting System”) to determine if it is an “ACCEPT” or “REFER”
— Files with an “ACCEPT” finding generally are allowed to have a higher percentage of their income for housing.
–Files with a “REFER” finding are generally required to provide 12 months’ cancelled rent checks and possibly even additional references for things like utilities, car insurance and/or cell phone.
— Available for 1- unit (single family) owner occupied properties
— Not limited to first time home buyers but you cannot own any other real estate
–OK for condos that are either FHA approved condos, VA approved condos, or condos that are acceptable to Fannie Mae or Freddie Mac.
–Take a look at the RD Info Sheet for more details
— upfront participation fee is just over 1% and monthly fee is collected too (loan amount X .35% / 12)
–RD can be combined with NH Housing Finance Authority using their “flex” option
–Minor rehab funds may be available (up to $8000) on a case by case basis without getting into a rehab loan (ask us for details on this)
RD NH Housing Rehab
–Up to $35,000 in rehab funds available if combined with NH Housing. NH Housing Fact sheet for rehab program is in this link. The $35,000 rehab account includes contingency money and financed fees (final inspection & title update) so the actual amount available for rehab is not the full $35,000. For vacant homes, a 15% contingency is required. The “normal” contingency is 10%. For extreme situations where no utilities are working etc, the required contingency could be as high as 20%. Click here to read more about the NH Housing RD Rehab option.
Forms Required for the RD NH Housing program
— Contractor Approval Form
— Homeowner/Contractor Agreement
–Loan calculation worksheet