USDA stands for United States Department of Agriculture. The USDA Rural Developmendt (RD Loan) loans provide low cost insured home loans with no down payment requirement. A USDA mortgage might be right for you if you are interested in buying a home outside of the city with little or no out of pocket expense
What Type of Loans does USDA offer?
USDA Guaranteed Rural Development Mortgage USDA Guaranteed Loans are the most common type of USDA mortgage and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an combined household income of up to 115% of the median household income for the local area. Regional income limits for this program can be viewed here. All USDA Rural Development Loans are year loans and come with a fixed interest rate. We can help you with this type of loan. USDA Direct Rural Development Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households as defined by the USDA. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 % of AMI; moderate income is 80 to 100 percent of AMI. These loans are made directly from the USDA without the involvement of a mortgage lender.
Here are a few benefits of a USDA mortgage.
- USDA Rural Development Loans require NO down payment
- Closing costs can be rolled into the loan, if the home being purchased appraises for more than the purchase price or they can be paid for by the seller.
- There is NO maximum loan amount.
- You do NOT need assets or money in the bank to qualify.
- Qualifying for a USDA Rural Development loan with lower credit scores is possible. (Current min required credit score is 620)
- USDA Rural Development Mortgages are secure 30-year fixed terms at low market interest rates.
- USDA Rural Development Loans are for ANY new & existing single family residence located in a USDA eligible area.
- Property being purchased can be a regular sale, short sale, foreclosure home, etc.