Aspen is full of cops and cooks and doctors and lawyers. They might not live in the city limits in $5 million houses, but they do live close by – close enough to own their own homes.
And far enough from the big city to qualify for a federal home loan program that real estate experts say is the least known but best value mortgage program in America today: The Rural Development Loan program sponsored by the U.S. Department of Agriculture.
The loan is easy to get and – for some best of all -- requires no down payment. First of all, you have to live in a rural area. For purposes of this program, all of Pitkin County is rural.
The loan limit in Pitkin County is $417,000 and the seller can pay all the closing costs. Private mortgage insurance is not required (a savings of $200 a month.) But it must be owner occupied.
“This is a powerful program for people who live – or want to live -- in the Aspen area,” said mortgage lender Dan Auld, one of the top national experts on the program. “And for people who already live here who want to avoid foreclosure, refinance to get out of an adjustable or interest only loan, or for local folks who want to by another house here this could be just what they are looking for.”
There is a catch or two: The program has income limits that vary depending on the age and number of children; whether the buyers are senior citizens and other factors. The mortgage payment is limited to 29 percent of your income.
So sorry: The federal government is not going to help you buy your next multi-million dollar mansion. But it might just help the guy who gives you ski lessons.
“And even near Aspen there are homes that qualify,” Auld said.
These USDA home loans offer the best rates and also the best terms. “Interest rates may be real low today but that does not help you unless you have perfect credit,” Auld said. “These USDA loans are much more forgiving.”
Another feature of the this loan program is, in contrast to more traditional loans, there are no limits on how much of the closing costs the seller can pay. “This was an enormous help to us because even though my husband and I had good jobs, we did not have the cash for a down payment,” said Maryann Doherty. “Our sellers even paid for the first six months of our mortgage payments, all of closing costs, and they even bought down the interest rate. That was better for them than lowering the price of the house since they could deduct these expenses for tax purposes.”
This is getting a bit technical but know this: These are features even well qualified buyers simply cannot get today using other loans.
“This is one of the best 102 percent loan programs in the country,” said Michelle Corridon of the USDA. “It is consistently the least expensive loan available and it is really good for someone with stable employment but no savings.”
Who knew? The USDA is not just for grading beef anymore. Even in Aspen.