Here's a much-belated Christmas present from me to those of you who are first-time buyers and struggling to come up with a down payment and closing costs for Home No. 1:
The U.S. Department of Agriculture's "rural" mortgage.
This is not my first mention of this kind of mortgage, which, despite its name, does not require you to have a degree in animal husbandry.
A year ago at Christmas, I wrote about a 25-year-old single first-time buyer, employed by a software company, who bought a house in Gloucester County.
After considerable research, she settled on a mortgage insured by the USDA, rather than the Federal Housing Administration loan that many first-time buyers opt for.
Salvatore L. Bronti is a loan specialist with the New Jersey office of USDA Rural Development in Mount Laurel. (The agency's Pennsylvania office is in Harrisburg.)
Bronti said that in regularly reading my column over the years, he has noticed that the issue of first-time buyers' saving for down payments comes up frequently.
USDA Rural Development may be able to assist these buyers, he said, as "we offer a variety of loans, grants, and loan guarantees to build, buy, or improve single-family properties."
Bronti said rural was something of a misnomer, because eligible properties can be much closer to big-city markets than one might think.
There's an easy way to find out whether the property you are considering buying is eligible: Visit eligibility.sc.egov.usda.gov and enter the address.
Under the Rural Housing Service Section 502 Guaranteed Loan Program, low- and moderate-income borrowers are eligible for 100 percent mortgages with no money down, he said.
The Guaranteed Housing Program may be used to buy new or used homes and related facilities.
Under the program, houses may be built on individual parcels or in subdivisions. All dwellings financed must provide decent, safe, and sanitary housing and be modest in size, design, and cost.
Existing condominiums may qualify for financial assistance.
Applicants must have adjusted income that is no greater than the moderate-income limit for their area and be unable to obtain a mortgage from other sources.
Rural Development provides a 90 percent loan- note guarantee to approved lenders, to reduce the risk involved in extending 100 percent loans to eligible rural-home buyers and those who want to build, rehabilitate, improve, or relocate a dwelling in an eligible rural area.
The borrower must be the property's owner-occupant, Bronti said.
Credit is an important criteria in the eligibility process, he said.
The Guaranteed Housing Program has a minimum credit score of 640. To apply, you must have a minimum of three examples of credit on your credit report.
An applicant can qualify for a loan with a debt-to-income ratio of 29 percent principal, interest, taxes, and insurance, and 41 percent total debt.
Flexibility in ratios can be granted if you qualify, he said.
Loan rates are negotiated between the applicant and lender. However, loan-repayment terms cannot exceed 30 years.
The lender pays Rural Development a guarantee fee based on a percentage of the principal amount.
There are fees associated with this loan: a 2.75 percent up-front guarantee fee and a 0.5 percent annual lender fee, Bronti said.
Closing costs and reasonable and customary expenses associated with the purchase may be included in the loan if the appraisal permits, he added.