USDA Direct Loan DPA Breakdown

Eligibility Link:

Today we’re talking about the usda direct program we start we started to break down each loan program so that you have a good feel and a good understanding for what down payment assistance and low down payment options there are so this week we’re going to talk about usda’s direct program so there are two different programs that united states department of

Agriculture offers they offer direct and a guaranteed a loan officer can offer financing for the guaranteed program we’ll talk about that in next week’s video today we’re going to talk about the direct program which is a subsidized help for those income earners that are low or very low income earners okay so provided in this video is the link to the portal

So that you can see the program information about direct and guaranteed if you’re going to go and look at the direct program you need to contact your local state agency for united states department of agriculture a local loan officer cannot help you you have to go directly to the united states department of agriculture and their their help is to provide you

Affordable clean housing at a discounted interest rate and oftentimes even subsidized further than that down to an interest rate of one percent wow okay let’s break that down a little bit more and talk about it so if this program is specifically for those income earners that are moderate to very low and low income how do you know what that income is each

County has what’s called a median housing income so if you go to you google or you go to the internet and you see and you search median housing income in the county that you live in it’ll tell you what the median is and then typically for direct your income has to be 50 of that number or below so it definitely you definitely qualify for those of us that are

On fixed income or are on very low income you have to be able to pay back the mortgage of at least a 50 000 loan with your debt income ratio so you have to be able to support some sort of housing payment you can’t be so low and so high on your debts that you can’t afford any payment at all minimally you have to be able to afford about a fifty thousand dollar

Mortgage payment and so for that and other questions you’ll want to contact usda direct and have a liaison there at the government agency help and pre-qualify you so let’s give a couple examples let’s say that you’re your client and you make your your person you make thirty two thousand dollars a year and you wanna buy about a hundred and fifty thousand dollar

House well given that income given the house price your payment would be about 732 you would get a you would get a below market interest rate lower than the going market right and the second half of that is usda has subsidized your payment so that the payment is about 115 off of the regular mortgage payment that would be in place if you were not getting the

Usda direct subsidized loan so usda gives you a below market interest rate and if you fall within their criteria they will subsidize and pay a portion of the interest payment that you have every month and make that payment for you they cannot pay the principal back but they will pay a portion of the interest down allowing you a discounted rate down to as

Low as one percent wowsers right it depends on what the going market rate and what their interest rates are and what the what the government with the coinciding market interest rate is uh but usda has been known to give interest rates as low as one percent so what does this mean if you have a subsidized interest rate then when you after you pay off the loan

In its entirety you then have to pay back in most cases portion of the subsidy or all of the subsidy this allows you to get into a great house with a low payment that’s affordable for you clean affordable housing also you do not have to be a first time home buyer and you do not have to hold the house for any certain period of time when you do sell though if

You have a subsidized payment in the profit that you get from the house you’ll have to pay back that subsidy that that amount let’s say the regular mortgage payment was 8.32 and your subsidized payment was 7.15 the difference of that times 12 months times how many ever years you had that subsidized payment will need to be repaid back it’s a wonderful loan for

Those income earners that are on fixed incomes or on load of moderate income very very very low i should say below moderate so low income earners and it gives a wonderful opportunity for you to get into a house with you and your family with affordable housing clean affordable housing it’s phenomenal so i provided the link for you so that you can click on it

And see what the median income is what what the direct program offers it is a hundred percent financing program so there’s not a down payment required however there are still closing costs and prepaids of which will total five to seven thousand dollars let’s say and you can have the sellers help you with those you can have a family member give those to you

They can be your own funds or in some situations if the appraisal appraises for hire and you have room in your debt income ratio you can roll in those closing costs into the loan if the appraisal is higher so lots of options for you the key is to contact usda direct and get pre-qualified if you do not qualify for direct because you make too much money you

Want to see a loan officer such as myself that can get you qualified for the guaranteed program in which we’re going to talk about next week thank you so much for watching and make it a great day you

Transcribed from video
USDA Direct Loan DPA Breakdown By Dawn Connors