3 Reasons the Concept of Rural Development Can Save the Housing World

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Did you know the federal government wants home buyers to be required to have a 20% down payment in order to keep another "mortgage meltdown" from happening? It's called the QRM rule and it would mean potential home buyers would need to save up for more than a decade to come close to having that kind of money. This has the potential to cause major problems for the housing market, and keep people in rentals for long term living.

So what are your mortgage options? There's a loan program backed by the USDA that will finance a home purchase with 100% financing. It's called a Rural Development mortgage. RD loans could save the housing industry!

Here's a look at 3 reasons the concept of Rural Development could save the housing world.

1. 20% Down Payments. With an average salary and average debt, a potential home buyer faces a huge uphill battle saving money for a 20% down payment. Imagine a first house for $135,000 (the median home price in Kalamazoo County, Michigan according to Trulia). That would require $27,000 cash in hand. Do you have that kind of money? How long would it take to save that up on your salary? RD loans require $0 as a down payment. That's a huge difference.
2. Mortgage Insurance. Rural Development loans do not require mortgage insurance (as of May 2011) on a monthly basis. There's an upfront fee (which is possible to roll into the mortgage) but no monthly payments. Any monthly payments that may come, as this could change, would still fall below the average mortgage insurance rates. This saves you money as well.
3. Rural is Loosely Defined.Take a look at the map pictured. It's near the AmeriFirst Home Mortgage corporate HQ in Michigan. The shaded areas are "ineligible." The rest? Covered under the concept of rural development. This means the house can still be near the conveniences of a bigger town. Rural doesn't mean a farm-house out in the country with no neighbors for miles (although a house way out in the country may be just what you're looking for!).

There's a lot of great information on rural development loans and how you can take advantage. Download the free guide below. It's a one-sheet full of information. You can also find information there on how you can talk to a Rural Development Specialist when you're ready.