If you've already begun seeking out a mortgage and researching the different types of loan options available, you've probably received quotes from lenders regarding down...
If you’re a homeowner with decent credit, but struggling to get approved for a conventional home loan, you may want to consider your states USDA home loan program. The USDA Home Loan program is specifically designed for lower to moderate income families, or individuals, looking to purchase a home in a rural area. While USDA Loans in your state have long been considered “farmers loans”, this is not the case. Many residents are often surprised when they discover that in many cases USDA rural areas can be suburbs on the outskirts of larger cities, or small towns with less than 25,000 residents. USDA
Home Loans in your state offer many advantages to qualified borrowers that you won’t find from a traditional mortgage. First and foremost, the USDA home loan program is one of the only home loan programs left in the country that requires absolutely no money down on the purchase of your home. This could be essential for buyers who can’t afford to save up thousands and thousands of dollars needed for the costly down payment of a home. Also, the USDA loan program has tons of other excellent features such as a low interest rate 30 year fixed term, very low PMI insurance, and you still can be accepted even if you’ve had a previous bankruptcy, as long as it has been discharged for more than two years. Another great feature of the USDA home loan program is that closing costs can be financed into the total amount of the loan, or can be arranged to be paid by the seller. This can save the buyer thousands of dollars upfront when purchasing the home, which can be spent on other necessities like on furnishing the home, home repair, and home insurance.
To be eligible for a USDA Home Loan in your state, you must meet the following criteria. You must have moderate to low income, but still be able to prove that you can afford to make mortgage payments every month. Because the USDA home loan program was designed to help low, to very low, income families and individuals secure a home loan, there are designed income limits that vary for each USDA qualified area. These income limits are generally 115% of the average median income for that area. You must also be a U.S. citizen, or legally permitted to be in the United States.
Pre-Qualifications are an important step in today's real estate market. They show sellers that you are qualified to buy their home and that your offer should be considered above other, less serious offers.
The USDA Home Loan Program is officially referred to as “USDA 502 Guaranteed Rural Housing Loan Program.” It is designed for both individuals and families who have low to moderate incomes. However, it is important to note that the low to moderate term is used in the broad sense and many people do qualify.
The USDA offers a zero down payment home loan program with affordable terms to make the dream of home ownership a possibility for thousands of individuals every year. The USDA Home Loan Program also benefits the rural parts of the country, by attracting residents to these areas. Fortunately, around 97% of the United States is designated rural for purposes of the loan, so many properties do qualify.