Buying a home with little or no down payment can provide opportunities for buyers that otherwise may not be able to become homeowners.
USDA Loans offer flexible options as either Fixed Rate or Adjustable Rate mortgages. You may qualify with less than perfect credit. Buying a home with little or no down payment can provide opportunities for buyers that otherwise may not be able to become homeowners. Fortunately for today’s buyers, there are a few programs that can help them qualify for a mortgage with a very small down payment. One that is not widely discussed is the USDA Single Family Housing Guaranteed Loan Program.
The United States Department of Agriculture, USDA, administers the program but does not actually loan money. Similar to loans backed by the Department of Veterans Affairs, VA, or Federal Housing Administration, FHA, these loans are guaranteed by the USDA. Private lenders, such as banks or credit unions, still loan money to the home buyer but they know that the USDA will pay if the borrower is unable.
This allows lenders to assume less risk, and as a result they are okay requiring less money down.
Contrary to its name, the USDA loan is not only available for those in an agricultural setting. The USDA loan is designed to help “low and moderate income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas.”
To use the USDA loan, applicants must meet income requirements and be purchasing a home for their own primary use in an eligible area. Potential homeowners can look up each property’s address to see if it qualifies or talk to a lender about using a USDA loan in their area. The loan can be used for new homes, existing homes, and even homes that need some renovations.
If coming up with a sizable down payment is holding you back from your dreams of home ownership, the USDA loan may be just the answer you are looking for.
Have questions? Give us a call! One of our mortgage specialists would be happy to answer all of your questions.
**This company is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.
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A USDA home loan is a mortgage program backed by the U.S. Department of Agriculture designed to help eligible borrowers purchase homes in designated rural and suburban areas with little or no down payment.
Eligibility is based on factors such as income, credit history, and the property’s location. Borrowers must meet specific income limits, and the home must be in an eligible USDA-designated area.
One of the biggest benefits of a USDA loan is that it may offer 100% financing, meaning no down payment is required for qualified buyers.
Yes. The USDA offers refinance options, including streamlined programs that may help eligible homeowners lower their monthly payment or interest rate with less paperwork.
Yes. USDA loans include a one-time upfront guarantee fee and an annual fee, which functions similarly to mortgage insurance and helps keep the program self-funded.
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