Loans built for particular situations
USDA loans, reverse mortgages, equity lines and seller financing each solve a problem the standard purchase loan does not, and each carries its own fee structure or title consequence.
USDA Section 502 Guaranteed
Rural, no down payment, household income at or below 115% of area median. Two fees: an upfront guarantee fee of 1.00%, which may be financed, and an annual fee of 0.35% of the average unpaid balance, paid monthly. On a $250,000 loan the annual fee is $250,000 × 0.0035 = $875 per year, so $875 ÷ 12 = $72.92 per month. The $2,500 figure is the upfront fee; dividing it by 12 gives $208.33 and mixes the two fees.
Reverse mortgages
A HECM requires HUD-approved counseling before the loan, with a certificate delivered to the lender, and is non-recourse, so the borrower or heirs never owe more than the home is worth. The youngest borrower must be 62 or older, not 55, and the home must be the principal residence, so it may not be rented out. The balance grows over time. The lender cannot demand repayment at will: the loan becomes due only on defined events such as death, sale, a 12-month absence, or failure to pay taxes and insurance or maintain the home.
Home equity borrowing
A home equity line of credit is an open-end revolving line secured by the home, with a draw period commonly lasting 10 years followed by a repayment period of 10 to 20 years, so funds may be taken as needed. A closed-end home equity loan disburses a single lump sum at a fixed rate. A bridge loan is short-term financing secured by an existing home to buy a new one before the old one sells.
Contract for deed
Under a contract for deed the vendor keeps legal title while the vendee takes possession and equitable title; the deed is delivered when the price is paid. The buyer holds no legal title, no mere leasehold, and no joint title with the seller.
Georgia rule: the instrument is historically called a bond for title, and it must be recorded with intangible tax paid if any part of the price is payable more than 62 months out.