USDA loans are offered by the United States Department of Agriculture and are often commonly referred to as a Rural Development loan, or RD loan. Similar to FHA and VA loans, USDA loans are backed by the Government and are designed to promote home ownership in underserved areas of the country. While not all property locations will qualify for a USDA loan, generally speaking, homes located outside of the city limits (or in cities with fewer than 50,000 people) are often eligible. In addition to physical location restrictions, household income is also a criteria for eligibility. Qualifying income is based upon the median income for the region and number of individuals planning to occupy the home. To determine if the home is in an eligible area and/or if you qualify for the USDA Rural Development home loan, click here to get started.
Other benefits of a USDA loan include:
No down payment requirement (will finance 100% of the home purchase).
Closing costs are comparable to other financing types and can typically be financed into the loan (no money out of pocket).
Low 30-year fixed rates are available.
Perfect for 1st Time Homebuyers, however program is not limited to only 1st time buyers.
Credit score and credit history is more flexible then most other loan products.
Right to prepay loan without penalty.
Reduced monthly mortgage insurance requirements.
Minor repairs can sometimes be financed into the purchase (new carpet, new applicances, etc.).
