Selinsgrove USDA Loan
You can buy a house in Selinsgrove PA without a Down Payment
Even though Selinsgrove is the largest town in Snyder County, Pennsylvania it is still eligible for the Rural Development Loan program, also known as a USDA Loan.
It may not feel like you are in a completely rural area when you are walking down Market Street in downtown Selinsgrove but the census maps have still zoned Selinsgrove as eligible for their No Down Payment USDA Mortgage program.
The rest of Snyder County, Pennsylvania is also eligible for a No Down Payment USDA Loan. To find out about other areas of Snyder County, Pennsylvania that are eligible visit the Monroe County USDA page.
The USDA Mortgage Program is also known as a Rural Development Loan. This program allows for 100% Financing, so there is no down payment required. Even better, you can also finance in any closing costs if the appraised value allows.
For example, if you have sales price of 180K and let’s say closing costs are 6K, you can finance 186K and roll the closing costs into the loan. The key to making this work is that the home would need to appraise for at least 186K. Another option to have closing costs covered is to negotiate for the seller to pay them. USDA loans allow the seller to pay up to 6% of the sales price. In most cases, this results in no money needed at closing from the buyer.
Disclosure of possible terms: 180K Sales Price with seller paying the closing costs
(i) The amount or percentage of the downpayment.
USDA Requires No Down Payment. USDA Guaranteed Mortgages are available with 100% Financing.
(ii) The terms of repayment, which reflect the repayment obligations over the full term of the loan, including any balloon payment.
USDA Loans are only available as 30 year fixed rates with no balloon payment, no negative amortization, and no prepayment penalties.
(iii) The “annual percentage rate,” using that term, and, if the rate may be increased after consummation, that fact
Example: $180,000 sales price with USDA Guarantee Fee Financed into the loan amount would result in a final loan amount of $181,800. A 30 year fixed interest at 4.5% with an Annual Percentage Rate (APR) of 4.758% would result in a Principal and Interest payment of $921.15. The USDA Annual Fee of .35 of the loan amount would result in a monthly Annual Fee amount of $52.50. This monthly Annual Fee amount of $52.50 would be collected with the monthly mortgage payment. Assuming $3000 per year for property taxes and $840 per year for homeowners insurance would result in the a total monthly mortgage payment of $1293.65. This is a scenario to illustrate possible payments. Interest rates fluctuate with market conditions. An interest rate can be locked at time of application. Loan must close with the lock in period. Your interest rate may be different than the interest rate used in this scenario. The property taxes and homeowners insurance used in this scenario are hypothetical and will vary according to the property. USDA Guaranteed Loans are only offered as 30 year fixed interest rates, which means your rate can never increase after closing.
Snyder County USDA Household Income Limits
Deductions to reduce your USDA Household Income Calculation
$480 for each minor child living in the household
$480 for any student living in the household who is not on the mortgage application
$400 for each disabled household member who is not on the mortgage application
Documented Child Care Expenses for household members under the age of 13
Documented Medical/Disability Expenses for household members age 62 or older (this deduction is allowable if the expense exceeds 3% of the household income)
Benefits of the USDA Mortgage Program
USDA Mortgages do not require a Down Payment
USDA Mortgages allow the Seller to pay up to 6% of the sales price towards the Buyer’s closing costs
USDA Mortgages allow the closing costs to be financed into the loan amount, if the appraised value supports the needed loan amount
USDA Mortgages are only offered as 30 year fixed mortgages
USDA Mortgages can be paid ahead of schedule or can be paid off at any time with no prepayment penalties
USDA Mortgages are not only offered in rural areas
USDA Mortgages are also available in many large towns and suburbs of cities