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If you have decent credit, live in a rural area, earn less than 115 percent of the median income in your area, you might just qualify for the best mortgage deal still available in America.

House Blesses No Down USDA Guaranteed Loans

If you have decent credit, live in a rural area and earn less than 115 percent of the median income in your area, you might just qualify for the best mortgage deal still available in America.

Last night the House of Representatives made sure there will be plenty of money available for no-down payment loans guaranteed by the US government-the Department of Agriculture, to be exact.

Founded in 1949 to spur home sales and development in rural areas, the US Department of Agriculture’s direct and guaranteed rural housing loans today are just about the only place in America you can get a mortgage with no money down at competitive rates.

Best of all, you don’t have to live in a rural area to qualify. For example, you can get one if you live in a suburb like Elmsford, New York, a delightful village of 5,000 in Westchester County, just north of New York City. It has great schools, shopping, and a lot of history.

To qualify for a residential loan guarantee under this program, the official Area Median Income for a two person household in Westchester County-one of the ten wealthiest in the nation-is $ $105,950. The 115 percent ceiling for the rural housing guarantee program is $121,842, well above the median income of $74,916 in Elmsford proper.

So tremendously popular that consumer demand has tripled the annual number of loans that are typically issued each year, the program exhausts its available funding halfway through the Federal fiscal year. Congress is now spreading the risk somewhat by making lenders pay up to a 4 percent premium for the guarantee at the time the loan is initiated, with the goal of creating a self-sustaining initiative financed by government funds and industry fees.

Only Senate approval now is required to make sure plenty of money is available for balance of the fiscal year, which ends September 30.

In spite of the small size of the program, for fiscal year 2009, the USDA program’s delinquency and foreclosure rates were 12.16 percent and 1.72 percent, respectively. Last fiscal year, the program guaranteed 116,000 home loans.

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