What is a USDA Loan?

No Payment Down, 100% Financing

We are proud to offer the U.S. Department of Agriculture (USDA) – Rural Housing Service product. The Guaranteed Rural Housing Loan Program is offered through the Rural Housing Service (RHS), an agency of the USDA. The program is designed to help low-to-moderate income families achieve homeownership in eligible communities.

Program Highlights

  • Maximum Loan to Value: Max 100% LTV based on the appraisal value. 103.63% is permitted when the guarantee fee is financed
  • Eligible Properties: Attached and detached SFRs, PUDs, Condos
  • Funds Required: No down payment required No reserves required Gift funds permitted
  • Credit Score: Minimum FICO Score 640

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Benefits of a USDA Rural Housing Loan

Rural home loans are often provided through USDA Rural Housing Loan programs. Although it is certainly not new, the USDA Rural Housing Loan program may be one of the most overlooked government home loans available. Established in 1949 by the US Department of Agriculture, its goal is to give residents of rural areas the opportunity to own a home and promote development in underdeveloped areas. There are certain eligibility requirements for both the borrower and the property to be purchased. Borrowers must meet certain income, credit and employment requirements while the home to be purchased must lie within the USDA’s Property Eligibility Map. The USDA works with approved lenders in all 50 states. Since the program began, over 2.7 million rural borrowers have become proud homeowners. Here are 3 compelling reasons why this is such an outstanding prospect for anyone thinking of buying a home:

1. Rural Does Not Mean Remote

Please do not assume that the eligible properties are all located miles and miles from civilization. A quick check with the USDA’s website will allow you to track down homes that meet the USDA funding guidelines.

2. Unparalleled Affordability

USDA home loans are one of the only mortgages available other than those for members of the US military that offers no money down home loans (note: there may be some programs available in certain locations where 100% financing home loans may exist). It is an excellent option for those with lower incomes or less than perfect credit. Mortgage insurance is not required and loans can be used to purchase or refinance. Monthly payments are kept affordable, thanks to the fact that the loans are 30-year fixed rate mortgages.

3. More Borrowers Are More Eligible Than Ever Before

As part of the American Recovery and Reinvestment Act that came about in 2009, the USDA home loan requirements have become more streamlined and opened the door for higher eligibility rates. Borrowers must still meet certain income requirements and provide a credit report; however, the guidelines are not as strict as they were previously. To learn more about USDA Rural Housing loans and their eligibility requirements please contact us today.