USDA Loan Offers Zero Down Home Construction

POLAND, Ohio – In an effort to spur new home development locally, AmeriFirst Home Mortgage is rolling out a new zero-down home construction loan option.

The USDA Rural Development New Construction loan provides qualified homebuyers the opportunity to receive 100% financing with no cash down payment to build a new single-family home. The one-time close, construction-to-permanent loan program includes the build itself, purchase of the lot and permanent mortgage funding.

If a home appraises for more than the purchase price, the borrower can roll additional costs, such as mortgage payments, into the loan amount, said Branch Manager Brandon Davis. AmeriFirst Home Mortgage is the first loan originator in Ohio to offer the mortgage option, he said.

“AmeriFirst has a long running professional relationship with the USDA and we’re delighted to be the first to roll out such a program to prospective homebuyers here in the Buckeye State,” Davis said in a press release. “This will provide more work for our local builders and contractors as well as greatly benefit rural communities with an infusion of cash and capital.”

Loans are closed prior to breaking ground, so requalification or reappraisal aren’t required. This helps simplify the construction and purchase process, he said. Under the program, USDA Rural Development Construction guarantees, or insures the loans made by private sector lenders like AmeriFirst.

To be eligible for the loan, the property must fall within certain geographical areas, including outside of city limits or major metropolitan areas. However, 97% of land in the U.S. is eligible for USDA financing, he said.

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