Tuesday, March 27, 2012

USDA DIRECT home loan - Sub Prime at Best

USDA Rural Development has many home loans and grants available but few people really know about them.  Maybe that is because their web sites are not user friendly.  It is almost as if they use a different language than we common folk.  Or maybe it is so people don't know about the Government waste. (sorry)

The USDA Direct home loan is a sub-prime loan at best.  It is government funded, and most times the mortgage payments are also subsidized by the government.  Well, hello.  That is 100% paid for by the tax payers even without the subsidy. 

Many of the qualifying buyers are on food stamps.  In fact until Oct of 2011 the food stamps were considered INCOME and calculated into the debt to income calculation.  I'm thinking, ... they are going to pay their mortgage with their food stamp card???  Really?

In all fairness if this program was used as originally intended, for first time buyers of low income, it would be a good program.  Politics have turned it into a welfare program.  Obviously the delinquency rate is very high.   There are many repo's on the market but that is only after USDA has given them programs (with no payments at all) for a very long period of time.  You won't find this on their web site.

If your are a first time home buyer of low income this is a program you might want to research.  It can be a good program if it is not abused.

This is a video that covers the direct home loan guidelines.  If you have questions send us an email and we will try to find the answers on the USDA site.  Again, not user friendly.

This is a good program if it is not abused.

The best home loan on the market is the USDA Guaranteed home loan.  No money down and the guidelines are just like a conventional loan.  Check out the usda guidelines


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