LogFAQs > #931285922

Something else to look at if you live in a rural area is the USDA Rural Development loans. They offer two versions, the Single Family Housing Guaranteed Loan Program, which provides a 90% loan guarantee for buyers with incomes up to $86,850 for a family of up to 4 (higher in certain areas and for larger families), and the Single Family Housing Direct Home Loan, which provides direct loans from the government for low income buyers (limits depend on your location). The latter includes a fixed interest rate as low as 1% with payment assistance (any assistance must be repaid when and if the home is sold), and up to a 38 year payback period for very low income applicants.

There's also the FHA loan, which is available to low-to-moderate income buyers and offers a down payment of just 3.5% if you have a credit score of at least 580 (10% down for credit scores as low as 500), but you have to pay an Upfront Mortgage Insurance Premium of 1.75% of the loan (can be included in the loan), and an Annual Mortgage Insurance Premium of 0.45% to 1.05% depending on loan amount, length of loan, and loan-to-value ratio, the average rate is 0.85%. This loan is really only good for people with lousy credit.

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