Michigan families capitalize on USDA home loans

11/23/2011

The United States Department of Agriculture offers loan programs that compare favorably to Federal Housing Administration loans, and more Michigan families are taking advantage of them, the Muskegon Chronicle reports.

According to NASDAQ, USDA Rural Development Loans allow for 100 percent financing with no down payment or mortgage insurance required. However, these USDA loans are limited to families with low to moderate incomes - homeowners' salaries can't exceed 115 percent of the median income for their area.

There are no specific limits on how much can be borrowed, but certain features considered luxury items - such as an in-ground swimming pool - are prohibited.

In Michigan, approximately 7,000 families took part of the USDA programs over the past two years. According to Alec Lloyd, Michigan Rural Development Agency spokesman, this is because rural home prices tend to be more stable, which has led to a lower default rate as well.

Furthermore, the agency offers classes for families on how to handle the expenses of owning a home.

"We want them to succeed in home ownership," Lloyd told the media outlet. "The goal is to help people who have the means to buy a home to get there."