Financing in 04530>Question Details

Alyce Ornella, Other/Just Looking in South Harpswell, ME

Can a Section 502 Direct Loan from Rural Development (USDA) be used to purchase AND renovate a home?

Asked by Alyce Ornella, South Harpswell, ME Sun Apr 8, 2012

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Rural Development does have a purchase + improvement loan product. If the buyer and the property qualify, as part of your loan application process, you will need to get estimates from contractors, who will do the work for you after closing. Do-it-yourself is not an option for the renovations that are part of the loan. The best plan would be to get the scoop straight from a lender who does both Rural Development and MSHA loans.
0 votes Thank Flag Link Sun Apr 8, 2012
depending on the location of the house, value of the house, your loan limits (what you can afford to borrow) and what you need to do, you can use the loan to purchase and do some renovations. With this loan type, your best bet is to go to Maine State Housing authority. RD prohibits certain types of properties or features - such as no waterfront, no income units or rental potential, etc.. With MSHA you will not be required to escrow 50% of the renovation amounts, so you can still do a 0% down loan. You can also roll in closing costs.
0 votes Thank Flag Link Sun Apr 8, 2012
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