Common Questions About USDA Home Loans

USDA home loans can be especially appealing to home buyers living in eligible towns and counties. Surprisingly, not all USDA eligible homes are in rural areas. Check with a USDA home loan lender for more information and changes because requirements and rate change regularly.

Can You Really Get a No Money Down USDA Loans?

Yes, it is possible. If both you, the buyer, and the property are eligible for USDA home loans, you could make a no money down purchase.

Are USDA Loans Only for Rural Properties?

No, United States Department of Agriculture home loans are not restricted to farm, rural or properties. Single-family condos and homes in eligible areas may be bought provided the buyer and property meet requirements.

What Types of Loans Does The USDA Progam Offer?

The USDA offers 30 year fixed rate mortgages. As much as 3.5% more than the home aprraised value can be borrowed. The added 3.5% can cover closing costs, reducing the total amount of cash needed to buy the property.

Can USDA Loans Be Used for All Homes?

No. The borrower must intend to make the single-family home their primary residence. Condos can also be purchased using USDA home loans, but all homes purchased using USDA loans have got to be in an eligible area.

What Are Eligibility Maps and Eligible Areas?

The areas are determined by the USDA. You can see if your area is eligible by checking out USDA eligibility maps.

What is the Maximum Amount I Can Borrow?

How much you can borrow for a USDA mortgage will be based on your income and debt. The USDA sets the income requirements and maximum loan amounts and can be difficult to determine. It's best that you contact a USDA lender to help you determine your eligibility and maximum loan amount.

Who is Eligible for USDA mortgages?

The fundamental necessities for USDA home loans include:

Acceptable credit history (usually not as severe as conventional loans).
The home must be in an eligible area.
Income cannot be more than 115% of the average income of the borrower's area.

Are USDA Home Loans a Good Option For You?

First, unlike USDA loans, 100% conventional loans are extremely difficult to secure and USDA Mortgages can be 100% of the purchase price.
No mortgage insurance is necessary for USDA loans. Conventional loans and FHA loans are expected to require mortgage insurance at a high monthly cost.
USDA mortgage interest rates are very competitive, so even with a 100% mortgage, monthly payments can still be very affordable.

USDA home loans are a good option for those who live in eligible regions and who qualify for the program.