Yes, it’s still possible to finance the purchase of your home with 100% financing – zero money down!

Believe it or not, it’s through the United Stated Department of Agriculture, and it’s called Rural Housing. As with any program, there are limitations. With Rural Housing, the goal is to provide zero down loans to people who otherwise could not qualify for another loan and for properties in the open country or towns with a population of less than 10,000.

The Northwest Washington State, that includes just about everywhere north of Marysville, including Island County and San Juan County except:

• City of Mount Vernon
• City of Bellingham

Here’s a map showing the eligible areas. You can even type in an address at the Rural Housing website to see if a particular property is eligible.

There are also income limits, and it goes by the number of people in the home (counting kids, grandparents and that live-in brother-in-law that just cannot seem to find a job). For example, if there are between 1 and 4 people in the house, the maximum total household income for a Skagit County property is $73,600. In Island County, it’s $89,550. There’s also an online calculator to determine if your household is eligible, but we aware that you must count ALL income (disability income that brother-in-law is receiving, the $50/week your kids is making at McDonald’s and so on).

These income limits were just regrouped (effectively raised), so many more families qualify for this program. As a result, the few lenders that offer this program are backed up in underwriting with the increased surge in applications. Yes, that’s right – not every lender offers government sponsored programs. Even if they do, they may not offer Rural Housing financing (we have at least 3 lenders that offer Rural Housing).

And, once the application gets past the lender, it has to move on to USDA for their review of the file. Of course, their fixed-sized staff is being overwhelmed with applications, so their normal 2 day turn time has increased to 7 days, and they say to expect longer waits in the future.

The key here is to allow yourself plenty of time to close on your new purchase with this financing product.

Other key benefits include:

• No minimum credit score
• No waiting period from a discharged bankruptcy

Now, most lenders are mandating at least a 620 score and a 2 year waiting period from the BK discharge. We do have at least one lender that does not have any minimum score requirement (although the fee to the borrower is higher) and will review an application if that client is just emerged from bankruptcy.

There are other limitations to this program, including:

• manufactured homes – can only be brand new on the lot, installed by the dealer
• properties in flood plains – ground floor must be above the 100-year flood plain
• older homes – homes over 50 years old must be reviewed the historical society before closing, adding additional time to the closing process

Again, if you qualify for any other program (FHA, conventional, VA, etc.), then you probably won’t qualify for this program. For all others, it’s a great option to consider. Talk to your professional mortgage advisor about this option.