The Last Great No-Down Loan

Written by: Steve Cook   Thu, June 4, 2009 Beyond Today's News, Opportunities

Thought no-down payment mortgages were a thing of the past?

Think again.  The government is looking hard for takers on 100,000 no-down loan guarantees between now and the end of the year.  You could be one of them.

Last year the US Department of Agriculture’s popular rural housing loan program was running out of money-because it was the only place in America borrowers could still get a government-guaranteed loan and pay no down payment.  When they heard the coffers were running dry, farm state congressmen made sure there was extra money in the stimulus package enacted in February to fix that problem.  The result was that available funding doubled and now USDA is out looking for more business.

So fat this year it has spent $4.3 billion on direct and guaranteed loans to help 32,000 families buy new homes, but the folks at USDA are going to have to work a whole lot harder at giving away money if they are going to reach the 130,000 borrowers targeted by the program this year.

Sound good so far?

To qualify, you need to earn less than 115 percent of the area median income as calculated by USDA and live in a rural area or a town with fewer than 20,000 residents. 

That may not be as difficult as it sounds.  For example, you could live in 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.

Aint’ this a great country?

“Some folks don’t realize or appreciate that we are in the housing business,” USDA Secretary Tom Vilsack said earlier this week. “If we were a bank, we’d be the seventh-largest bank in the country.”

And they wouldn’t need any TARP money! 

Find out more about the USDA Rural Housing Single Family Guaranteed Loan Program at

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