USDA Loans
Backed by the United States Department of Agriculture, USDA loans provide affordable mortgage options for rural and some suburban homebuyers. Click the link below for a customized quote.
What is a USDA Loan?
USDA loans are guaranteed by the United States Department of Agriculture (USDA) and are designed to help low-to-moderate-income borrowers in eligible rural areas purchase a home.
USDA loans are unique in that they do not require a down payment, making them an attractive option for homebuyers who may not have the funds for a large down payment. Additionally, USDA loans typically have more flexible credit score requirements than conventional loans.
To qualify for a USDA loan, borrowers must meet certain eligibility requirements, including having a stable income, a credit score of at least 640, and purchasing a home in a designated rural area. The home must also be used as the borrower’s primary residence.
USDA loans have a maximum loan amount based on the borrower’s income and the location of the property, and they require mortgage insurance premiums. The loan terms are typically for 30 years and have a fixed interest rate.
Misconceptions
Only For Farmers – While the USDA loan program is administered by the United States Department of Agriculture, it is not limited to farmers or those in the agricultural industry. USDA loans are available to low-to-moderate-income borrowers in eligible rural areas who meet the program’s eligibility requirements.
Only For low-income borrowers – While USDA loans are designed to help low-to-moderate-income borrowers, there is no specific income limit to qualify for the program. Instead, USDA loans have a debt-to-income ratio requirement, which takes into account the borrower’s income and expenses.
Not Available In Populated Areas – While USDA loans are designed to promote homeownership in rural areas, the program has specific eligibility requirements for what constitutes a rural area. Some suburban areas may also qualify for USDA loans.
Difficult To Qualify – USDA loans are not necessarily more difficult to qualify for than other loan programs. In fact, the program’s credit score requirements may be more flexible than other loan programs, making it easier for some borrowers to qualify.
The USDA Loan Process
- Check Eligibility: Verify property location and income limits for USDA loan eligibility.
- Choose a Lender:Find a lender that offers USDA loans.
- Get Pre-Approved: Submit financial details for pre-approval.
- Find a Home:Search for a property in a USDA-eligible rural area.
- Submit Loan Application: Complete the loan application with necessary documents.
- USDA Appraisal: Lender orders an appraisal to ensure property meets USDA standards.
- Loan Processing: Lender reviews and approves the loan.
