USDA Home Loans are comparable to conventional mortgages, but with the key differences of offering $0 money down and affordable yearly mortgage insurance.
With the USDA Guaranteed Loan, a buyer can finance 100 percent of the purchase price of the home, in addition to the funding fee set by the USDA – making this one of the last true 0$ down programs.
Another USDA Loan advantage is that the USDA Loan's mortgage insurance fee is just 0.50% monthly – nearly half of what is charged on a conventional loan and a quarter of what is charged on FHA – and doesn't fluctuate in respect to the down payment.
In today's market, finding a true $0 down mortgage is nearly impossible, with exception of the USDA Loan. Unlike conventional mortgages - which require up to 20% down - this amazing benefit allows you to keep more cash on hand, keeping you prepared for life's emergencies.
Properties eligible for the USDA Loan must meet what the USDA deems as rural. With the USDA's interpretation, many homebuyers in suburbs of major metropolitan areas are eligible, in addition to those living in small towns and rural areas.
Similar to other government backed programs, the USDA Home Loan is funded by approved lenders and backed by the United States Department of Agriculture. Through this guarantee lenders have greater confidence to extend financing to a larger range of applicants.
Designated "rural" areas are easily found across the entire country, making millions eligible.
Processing times have sped up immensely, reaching closing dates in as little as 30 days.
Both first-time and repeat homebuyers can be eligible for this incredible home loan program.
Possibly the most notable benefit is no required down payment for eligible homebuyers.
The USDA Guaranteed Home Loan is funded by a USDA-approved lender and guaranteed by the USDA. This guarantee allows homebuyers to receive low interest rates, zero money down and lenient eligibility requirements. Additionally, through the USDA’s guarantee, homebuyers that may not have qualified for a conventional mortgage have the opportunity to secure home financing.
USDA Loan qualification standards vary by property location, which is why it is best to contact a USDA Loan specialist to help determine if you are eligible. As for the general requirements, a homebuyer must:
As for the home itself, the USDA Loan is only meant for owner-occupied, primary residences. This means no rental property. Additionally, the home must be safe and sanitary and move-in ready.
USDA Loans are one of the best options available to homebuyers that plan to buy in rural areas. Get started with your USDA Loan today.