What is a USDA Loan?
The United States Department of Agriculture offers USDA loans for low-moderate-income home buyers and also provides loans for home improvements.
Is it possible to buy a home without a down payment?
The USDA loan does not require a down payment unlike the FHA and Conventional loans. This type of loan is offered by private lenders and guaranteed by the U.S Department of Agriculture. The loan is available to a vast amount of the United States located in eligible rural area.
What are the rates for this loan?
Rates and fees vary by lender you will want to shop around to find the lender that can offer you the best rates for your loan.
What fees are associated with the loan?
This type of loan charges a 1% fee upfront. You will also pay a 0.35% a monthly mortgage insurance fee that you will be paying for the entirety of the loan.
What are the eligibility requirements?
To qualify for a USDA loan you will need to look at your credit score, income and location of the property you want to buy.
- You need a credit score of at least 640. Find out your credit score for free.
- The home you are buying must be in an eligible rural area. Find eligible properties.
- Your household income must be within limits set by the USDA for the area where you want to buy a home. Check your income eligibility with the USDA.
- The property can not be a working farm.
How Do I apply?
If you meet the guidelines for a USDA loan your next step is to apply for the loan.
You will need to find a USDA-approved lender. There are many options when choosing a lender, from small companies to large banks, and that number is expected to grow over the next few years. Therefore, You have the ability to shop around for the best rates.
Is a USDA loan right for me?
In conclusion, if you are potential home buyer looking for a home in a rural or suburban area without a down payment or great credit history, a USDA loan could be a great option for you. Make sure you understand the fees associated with the loan. In addition, shop around for lenders to find the best interest rates.