The USDA Rural Housing loan is a government insured loan that is available for the purchase of home within specific rural areas.
The benefits of this program include:
- 100% financing – no down payment required
- Low monthly mortgage insurance (PMI)
- Seller’s concession – seller can pay closing cost
- Low, fixed rates
- No maximum loan amount
No Down Payment Required – Unlike conventional and even FHA loans, USDA Home Loans do not require any down payment. This is especially beneficial for first time homebuyers. Saving up a down payment can be very difficult. Utilizing a USDA Home Loan means that is no longer an issue.
Low PMI – The monthly mortgage insurance on a USDA loan is much lower than it is for an FHA or conventional loan. This can greatly reduce your monthly mortgage payment, allowing you to qualify to buy a more expensive home, or allow you to put more money into savings every month.
Seller’s Concession – A seller’s concession allows the seller to pay for some (or all) of your closing costs out of their proceeds from the sale of the home. Couple that with 100% financing that is available, and you can be in a home without any of your own money, meaning you can keep your money in savings to cover any expenses that arise.
Financed Closing Costs – On some purchase transactions, foreclosures and short sales in particular, a seller’s concession is not possible. A USDA Home Loan allows the financing of the closing costs even if the seller will not agree to a seller’s concession. All of the closing costs (except discount points) can be financed, up to 100% of the appraised value of the home. This is extremely beneficial when a seller’s concession is not an option.
Low Fixed Rates – USDA Home Loans offer a low fixed rate. This is a rate that starts low, and stays low. That gives you the peace of mind that your payment will not increase in the future and that your home will remain affordable for years to come.
More flexible credit requirements – Because a USDA Home Loan is insured by the government, we are able to offer USDA Home Loans to applicants that may not qualify for other types of home financing, including FHA loans.
No maximum loan amount – While conventional loans have a maximum loan amount limit of $417,000, and FHA loan amount limits vary by county (and can be as low as $217,050), USDA Home Loans do not have a loan amount limit. This is especially useful in areas with lower FHA loan limits.
There are several restrictions to the program, including geographic location of the property, income, etc. You can determine your eligibility by visiting the USDA eligibility site, or contacting one of our loan officers.
Once you have determined that the area in which you are looking for a home and your income both qualify, contact one of our loan specialists for more information and approval.