IBMC offers rural development loans through the USDA to assist homebuyers purchasing their primary residence in designated rural communities. Explore the key benefits and requirements of this loan program:

100% Financing Available – USDA Rural Development loans offer eligible borrowers the ability to finance 100% of the purchase price, eliminating the need for a down payment. This makes homeownership more attainable for many people.

Refinancing Options – Refinancing is permitted, but it must be specifically for a rural development-to-rural development loan.

Competitive Interest Rates – Similar to VA and FHA loans, USDA-backed loans are not subject to the standard Loan Level Pricing Adjustments (LLPAs) and often come with lower interest rates, leading to significant savings over the life of the loan.

Income-Based Loan Limits – Maximum loan limits cannot exceed the maximum qualifying loan amount determined by county income restrictions.

Loan Terms and Fees – The USDA Rural Development loan features a 30-year term. There is a purchase or refinance guarantee fee of 1%, which can be financed into the loan amount. Additionally, an annual fee of 0.35% applies for the life of the loan. 

Property Requirements – Certain types of properties are not eligible for this loan program. These include properties with farm servicing or agricultural operations, condos, manufactured homes, and atypical properties. 

By offering USDA Rural Development loans, IBMC supports homebuyers in rural areas with affordable and accessible mortgage options. For more detailed information on rural development loans, visit the USDA Rural Development loan website. For rural development underwriting questions, you can reach out to Charlene Johansen, IBMC government product specialist, or the IBMC underwriting inbox.

Two Truths and a Lie

Can You Spot the False Statement?

Last month's issue of IBMConnection examined Fannie Mae’s HomeReady® Mortgage and its accompanying $2,500 grant. Below are three statements based on the content shared in that newsletter — two of which are true and one of which is false.

Test your knowledge by choosing which one you think is false. Results from the poll and the answer will be revealed in next month's issue of IBMConnection.

Last Month's Answer

Nearly 50% of IBMConnection readers selected the identified false statement in last month's edition of Two Truths and a Lie, which asked about the maximum amount that borrowers can finance up to for their conventional loan. The false statement was "Borrowers can finance up to $866,550 for their mortgage." Borrowers may actually finance up to $766,550 for their mortgage.