Just about everyone has heard about Fannie Mae, Freddie Mac, and VA mortgages. There is another federal government backed mortgage program that is little known but compares very favorably with these more popular ones. That’s the USDA Rural Development Mortgage Program.
Don’t be put off by the “Rural” in its name. USDA mortgages can be used to purchase homes in most towns in New Hampshire and central and western Massachusetts! In general, only properties in urban areas – larger cities and larger towns – are not eligible. In southern New Hampshire, for example, only Derry, Hudson, Keene, Londonderry, Manchester, Merrimack, Nashua, Portsmouth, Salem, and parts of Goffstown and Hooksett are ruled out. In Massachusetts, most communities west of Lowell and Concord and north of Worcester are eligible, except Fitchburg and Leominster.
Why are USDA mortgage loans attractive? They require no money down, have low interest rates, and don’t require mortgage insurance. Rural Housing loans are aimed at families with moderate or low incomes looking to buy (or refinance) a primary residence. The USDA will not lend to people with incomes over a certain amount, which can be as high as $ 104,000 for a family of four in certain areas of New Hampshire and Massachusetts. For information on income limitations, see the income tables on the USDA RD website.
For more information on which communities are eligible, click here. Previously, the USDA had announced that it would be deleting some towns from its program, but they have since reconsidered; there will be no changes in the eligible towns for the next few years.
All mortgage programs are complex. For an overview of the USDA Rural Development mortgage program, consult your banker or financial adviser. Please note that not all mortgage lenders offer this program, but there are many in every state that do. If you need assistance in finding a lender that offers USDA mortgages, please give me a call.