The USDA Mortgage program has eliminated their restrictions for properties with in-ground swimming pools.

The USDA has announced that effective 12/01/2014, the rules regarding in-ground swimming pools will be changing.  USDA Mortgages in Pennsylvania allow for 100% financing, however, with the previous rule regarding in-ground swimming pools, this wasn’t always the case.

Previously the USDA had a quirky rule that the value of the in-ground pool had to be subtracted from the lendable value of the property.  The USDA would require that the appraiser assigned a value to the property with and without the pool.  The USDA would then lend 100% on the value without the pool.  If the value of the home without the pool was less than the sales price, this meant the buyer would have to come out of pocket for the difference.

The USDA has now eliminated this rule.  The value of the in-ground pool will no longer be subtracted from the lendable value.  The appraiser just assigns a value to the property with the in-ground pool included and that is it.  USDA mortgages now offers 100% financing for properties with in-ground swimming pools.

This is good news for those that are looking to obtain a USDA Mortgage with an in-ground pool.

Previous Calculation for USDA Mortgages with In-Ground Swimming Pools

Sales Price: $150,000

Appraised Value with In-Ground Swimming Pool: $150,000

Appraised Value without In-Ground Swimming Pool: $140,000

Maximum USDA Base Loan Amount: $140,000

Out of Pocket Cost to Buyer: $10,000

New Calculation for USDA Mortgages with In-Ground Swimming Pools

Appraised Value with In-Ground Swimming Pool: $150,000

Maximum USDA Base Loan Amount: $150,000

Out of Pocket Cost to Buyer: $0

USDA MORTGAGENOVEMBER 17, 2014