USDA loans are a lenient way to buy a home in rural areas of the country. What you may not be aware of is that USDA loans in Garden City, NY, can be used to build a brand-new home as well. Read on to learn some basics of constructions loans with the USDA.
Single-Close Loan
A single-close loan is also known as a construction-to-permanent loan. Normally with new construction, there are two closings: one for the construction loan and one for the permanent financing, which is the mortgage. With the USDA single-close loan, borrowers can close both at the same time, which saves time and is less risky for lenders and contractors.
Eligible Contractor
In order to qualify for single-close USDA loans in Garden City, NY,, borrowers must choose an eligible contractor. An eligible contractor is one who has at least two years of experience building single-family homes, has a contractor’s license, has $500,000 in commercial liability insurance, has good credit history with no open judgments, and possesses a clean criminal record with no felonies.
Eligible Location
The location you choose to build your home must be a USDA-approved location. The property must be in a rural area with a population under 10,000. Areas with populations under 20,000 also qualify if they are not located in a metropolitan statistical area and suffer from a lack of mortgage credit for low- to moderate-income households.
Contact Contour Mortgage today for help from a mortgage company experienced in USDA loans.
Visit our Facebook profile for more information.
