Mei and Aaron are civilians buying a modest home in a USDA-eligible rural area. Their household income is below the program limit, they will occupy the home as their primary residence, and they want zero-down financing. Which loan type matches those facts?
Correct Answer
D) A USDA guaranteed loan for an eligible rural owner-occupant borrower
A USDA guaranteed loan is the best match because the property is in an eligible rural area, the buyers meet the income rules, and they will occupy the home as their primary residence. USDA's guaranteed program is known for allowing eligible borrowers to finance 100% of the purchase price with no down payment.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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