A potential client called out of the blue and explained that she was single with a young child. It was her life’s dream to raise her daughter on a farm. She told me she had no money for a down payment on a loan nor was she able to pay any closing costs. However, she had a good job and I could tell from her voice she had determination – which can make up for a lot.
I explained this was like a needle in a haystack but she had done her homework. She knew she needed a USDA Rural Development (RD) Loan. These loans are designed to providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. With an RD loan you do not have to put any money down on the loan as long as you meet the eligibility requirements:
- Meet income-eligibility
- Agree to personally occupy the dwelling as their primary residence
- Be a U.S. Citizen, U.S. non-citizen national or Qualified Alien
- Have the legal capacity to incur the loan obligation
- Have not been suspended or debarred from participation in federal programs
- Demonstrate the willingness to meet credit obligations in a timely manner
- Purchase a property that meets all program criteria
I found her a cute little farm in Vassar for around $100,000. We negotiated with the Seller to roll in her closing cost on top of the purchase price which made her new purchase price $106,000. As long as the property would appraise for $106,000, she would be eligible to purchase the home.
The good news was that the appraisal came back at $106,000. The bad news was that the home had numerous health and safety repairs that were now required by the lender, not the least of which was repainting an entire barn. The Seller made it quite clear in the beginning he would not do any repairs if he agreed to the RD loan and allowed her to add on the closing costs.
My buyer decided to paint the barn herself.
Normally, I would not recommend spending money to work on someone else’s house. However, if she didn’t paint the barn, the owner would put the property back on the market. On the other hand, if she painted the barn and the loan fell through she’d be out the price of the paint and her own labor.
My buyer had a dream, and she would not be deterred. She bought 10 gallons of red barn paint, took her 10 year old daughter out to the house over a weekend and painted the barn. Now that is determination.
Did it work? A few weeks later she closed on her home with no money down. Today, she and her daughter live in their own farmhouse – complete with a potbelly pig and chickens.
I am delighted to know someone with this much determination and drive to be a homeowner.
If you are interested in a Rural Development Loan in Genesee County, click here to see a map of eligible areas. In general, RD loans are available in Argentine, Clayton, Fenton, Gaines and Holly Townships, as well as northern Mt. Morris and Genesee Townships. Once you’ve found a property you can check on eligibility for a particular address here.