USDA LOANS suit you well, if you are in love with suburban life style or looking for a farm-land house. A USDA loan is a zero-down-payment mortgage for a home that must be in a rural area (USDA defines a rural area as area that has a population under 35,000). USDA loans are guaranteed by the United States Department of Agriculture and they help very low-to-moderate income buyers become homeowners.
Solution:
The three major benefits of a USDA loan are:
- Attractive rates – USDA loan rates are comparable to conventional loan rates and may at times be lower than the rates on Conventional loans.
- No down payment required: most USDA borrowers do not need to make a down payment. However, they may be required to make a $1,000 investment at closing. This $1,000 can be used for earnest money or any applicable closing costs.
- No Private Mortgage Insurance (PMI) is required. – With a USDA loan, a Borrower is only required to pay a 1% upfront fee. This fee can be paid in cash or be financed and included into the monthly mortgage payment. Additionally, the monthly mortgage payment will include a small USDA annual fee of 0.35% of the loan amount.
In order to qualify for a USDA loan – a Borrower does not have to be a first-time homebuyer or be employed in the agricultural industry. Only US citizens and permanent residents qualify for a USDA loan.
Certain minimum credit score requirements
To be eligible for a USDA loan, you’ll need to meet three basic income criteria.
- Your family income typically must be low or very low, as defined by the USDA. You may still be eligible if you have a moderate family income
- Your family income meets the parameters necessary for your level of debt
- Your source of income is dependable
To be eligible for a USDA loan, your property must meet certain requirements.
- It must be your primary residence
- It has to be located in a rural area, which the USDA defines as having a population under 35,000. Please click on the map attached for eligibility:
- Income-producing (Investment) properties and vacation homes do not qualify for USDA loans
- The property has to be appraised by a USDA-appraiser.
