If you’re anything like me, you would prefer a place you can call home instead of paying the increasing rent in South Carolina. I’m fortunate enough to have this dream fulfilled very recently. The interesting thing is that I was in no shape to apply for a housing loan, let alone buy one.
But I still made it happen, and it’s all thanks to the Rural Development program by the USDA. Never heard of it? Well, it’s a program by the government to help people like you and me out of a jam and give us the right to call a place our own.
You can learn more about the requirements and other information anytime you want, but I’m here to tell you the story of how my dream to own a home came true.
I was introduced to the loan program, perhaps at the lowest point of my life. I was working two jobs to keep up with the inflation after the pandemic, sacrificing the little social life I had. I was still paying off my student loans, which made even the thought of owning a home a gut-wrenching experience.
A colleague at one of my workplaces told me about USDA and how it helps people like me to get a home in the rural areas of South Carolina. I looked up the map and found that my area is eligible for the loans.
Now, I have two options. I could either go for the Single-Family Housing Direct Loan or the Single Family Housing Guaranteed Loan. After reading through the terms of the load tenure, I decided to go with the latter.
Of course, I don’t have impeccable credit history. What do you expect? Some sources on the internet said the creditors could ask for up to a 620 FICO score, but I didn’t have that. Needless to say, I was afraid of what my chosen lender would have to say about my credit.
Surprisingly, they didn’t bother too much with it. Apparently, there is no minimum credit score requirement to apply for these loans!
Now, you might wonder why I didn’t opt for the FHA loan. It’s also low-interest, right? Well, you’d be right, but the total fees stack up pretty much after closing costs compared to the USDA. Also, FHA loans typically require a higher down payment. I could’ve gotten a grant for it, but I just didn’t want to go through the trouble.
Speaking of down payment, my lender didn’t need any! I learned that the USDA guarantees the loan on your behalf, so the lenders aren’t worried about you defaulting on the payments. And the payments are pretty affordable if you ask me. I ended up paying a $750 total every month. Well, I still pay for it. Surprisingly, it’s less than what I paid in rent before buying the house!
Of course, your case may vary as there is no maximum purchase amount you can apply for. But I wouldn’t recommend a million-dollar duplex if you’re just barely making ends meet. You don’t want that burden on your shoulders for the next 30 years.
I’m paying a fixed 3.5% on my loan. The best part is that it’s fixed for the 30-year tenure. This surely saves me the trouble if the Federal Reserve decides to hike rates during this time.
The last thing I was afraid of was the closing costs. I was told it’d be around $3,000, and I didn’t have it in my savings. Thankfully, a kind soul at my lender suggested that I can negotiate with the property seller to pay the costs. If they don’t agree to pay the whole thing, I can roll the rest into my loan.
Things were going well, and I finally started looking into properties. A three-bedroom house caught my eye in Charleston County. The seller was a really nice middle-aged man who sympathized with my situation and agreed to bear the full closing costs!
After I took care of all the paperwork and got approved for the loan, things were moving fast. I left my rented apartment and moved into the new home, which surprisingly came out in excellent condition, according to the home inspection report!
I’m writing this post from the patio area of my dream house. I sure hope it helps someone who needs the inspiration to move forward with their dream.