Over the past several months, we have answered the top questions about the top mortgage loan options. Our final blog in this series will answer the top 5 questions about United States Department of Agriculture (USDA) loans. If you are considering buying a home, read on to find out whether a USDA loan might be the right choice for you.
USDA home loans are insured by the United States Department of Agriculture. This loan program allows low- and moderate- income households to purchase homes in eligible rural areas. Home buyers who do not qualify for a conventional mortgage may be able to purchase a home with a USDA loan.
- Who is eligible for a USDA Loan?
Low- to middle- income home buyers looking to purchase houses in eligible rural areas may qualify for a USDA loan. Other USDA requirements can be found here. Your lender may also have other eligibility requirements, including a minimum credit score.
- How do I know if I meet the income requirements for a USDA loan?
Income requirements for USDA loans vary by county, and are also based on the number of persons in your household. You can see what the income limits for your area are by visiting the USDA website.
- How can I find out if a property is in a USDA eligible area?
The USDA website allows you to search property addresses to determine whether they meet Rural Development rural area requirements. What qualifies as rural may vary from place to place, but includes factors such as the area’s population and development.
- Can I purchase a second home with a USDA loan?
USDA loans are designed to help eligible home buyers attain a primary residence, and cannot be used to obtain a second home.
- What are the benefits of a USDA loan?
The chief benefit of a USDA loan is that it allows home buyers to obtain 100% financing* for the home, with no down payment required. Additionally, the USDA does not have loan limits in place, so your purchasing power may be higher than it would be with another loan program. Your lender will be able to help you determine how much you qualify for.
If you are looking to purchase a home in a rural area, a USDA loan may be the right financing option for you. For more information about USDA loans, please visit the USDA website. If you have more questions about buying a home with a USDA loan, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!
*100% financing, no down payment is required. The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included. Loan is limited to the appraised value without the pool, if applicable.