What Happens When I Inherit My Dads "USDA Home"

5 Replies

My Father has owned a home since 1995 and he purchased it with some sort of USDA Program or Farmers Market Home (Ive heard him talk about it). Its some sort of government loan that he qualified for based on his income. He is disabled and draws a small check every month therefore his payment is only like $200 a month. I dont like talking to him about it because nobody never likes to talk about the "What If" scenario....

Anyways,

My Father has that house willed to me, if something was to happen to him how would that work? Since I make way more money than that would they re-adjust the loan and base it off my income? Would I even be able to inherit the home? Or as long as the payment is getting paid do they even have to know something happened to him? Just curious, I would like to know all my options.

I put the address of his home on the "Rentometer" website and the rents in that area are like 750-850, so if I can rent it out and only have to keep paying the $200 loan that would be a great cash flowing home.

If anyone has any insight on this please let me know.

@Chance Cooper  

Typically once you qualify for the loan/close on the loan and have lived in the required amount of time. It is all gravy. Without know the particulars of the loan I would probably say you are fine to assume it. The thing that worries me is the payment. $200 is not enough to pay taxes and insurance AND principle/interest. He might be on a forgivenance program since he is a vet. When the dies you probably won't continue to receive the tax break.

Elizabeth Colegrove When I get done with this deployment this is something I will def dive into. I need to know the ramifications in case something happened. Hopefully its ALL gravy instead of a headache.

@Chance Cooper  

Check his payments, also how much he has left on the loan. Could you just pay the house off since he has had it since 1995. How much is left on it? Also make sure you check comps in the area. I find rentometer or zillow in my areas are NOT the best checker. 

Elizabeth Colegrove The last time I checked I believe he owed like 60k on that home. I have never checked to see if the taxes and insurance are included, but I know he doesnt pay it at the end of the year so maybe it is rolled into the mortgage. I have power of attorney on him so it probably shouldnt be an issue calling the mortgage lender and getting all this information since I have power of attorney.

@Chance Cooper  

I would check with the mortgage company. $200 a month mortgage to have $60k left doesn't make sense. Any idea what he purchased it for? Here's why I am a little worried about the $200 a month cost.  One of my south carolina houses has a mortgage of $77k, the market price was $96k (i put 20% down). My principle/interest is $406 and my complete payment is $700ish (SC has high taxes/insurance). The mortgage amount usually pays down the loan, but the number is dependent on all the numbers from the beginning. So if he has 60k left and it is a 20 year old loan and he only pays $200? Just doesn't make sense. 

Wouldn't worry about it till you get home, put definitely something I would check out on palm leave!

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