Are There Any More Lenders that Offer "No Downpayment Loans?"

One of the most common questions I have been asked by folks trying to qualify for a loan is, "What about 100% financing?? Does that option exist for Home Buyers anymore?"

Truth is, our lending trends have changed drastically since the economic difficulties over the past few years with many of the lending institutions. In most cases, the only option readily available is old fashioned conventional lending where a lender determines the amount of money they will lend you based on your credit worthyness in an amount referred to as "LTV" or Loan to Value. Basically a lender may approve you, for example, 95% LTV, which means they will give you 95% of the funds needed towards the value of the home you wish to buy and you will pay the residual percentage of 5% as your out of pocket down payment.  For example, if you want to buy a house that is selling for $100,000 the lender would pay $95,000 in the form of a mortgage note and you would have to come up with $5,000 towards the purchase as downpayment. Of course many people can't come up with both the down payment and thier closing cost thus the need for a 100% financed loan. 

At present in Louisiana there is an option that may provide the possibility of 100% financing or nearly that by way of the USDA Rural Development progam. However there are a few catches!  Below are a few of them explained:

Applicants for loans may have an income of up to 115% of the median income for the area. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories. Next, you have to select a lender that is an approved lender by the USDA Rural Development program. If you wish to use the program you may ask your Realtor (if you are working with one) to help you with information on the local lenders and they should be able to help you locate one from being inoved in the Real Estate industry on a daily basis. Another catch is you can only buy houses in certain areas to use the lending assistance program. Again, if you are working with a Realtor they should be able to help you with learning of areas that qualify. (or go to the USDA Website to search the parish or county yourself) Loans are for a term of 30 years.  For an over view of all the requirements and general information on the "USDA Rural Development Program" you may click HERE to be taken to thier site.