USDA Mortgage Lenders – Program Information
What is a USDA Mortgage Loan?
The department of agriculture developed a program that will help lenders to provide financing to low-moderate income borrowers so they can purchase a moderate and safe home in eligible rural areas. A USDA loan will allow you to purchase a pre-existing home or even build a new one or renovate on older home in a rural area. This program provides lenders with the ability to provide borrowers with 100% financing and competitive USDA mortgage rates.
This is really one of the best programs that you can get. Here is why:
Benefits of a USDA Home Loan
- Ability to obtain 100% financing with NO down payment. Credit scores below 640 may require a down payment
- You may finance the closing costs
- Relaxed credit requirements so those with poor credit scores can still qualify
- Term options – available in both 30yr and 15 year fixed loan programs
- Great rates – USDA home loans usually are lower or at least competitive with the best rates you can find
- Wide range of eligible properties since most of the US is considerd to be rural.
Who is Eligible for a USDA Mortgage Loan?
In general, applicants must meet the criteria below and also must be willing and able to repay the loan.
USDA Loan Requirements:
- Must be a citizen of the US or be an eligible non-citizen
- Must be legally able to borrow (ie, must meet the age limits)
- Must occupy the home as your primary residence
- Must currently be without safe and sanitary housing now
- Must not have the current ability to obtain a conventional loan from other sources and lenders
- May not be barred from participating in any federal loan progams.
- Must meet the income limits set by the program CLICK TO SEE WHETHER YOUR INCOME LEVEL QUALIFIES
USDA Property Requirements:
- The homes must not be greater than 2,000 square feet
- The home may not be a business or a commercial property
- The home may not have a built-in or in-ground swimming pool
- The home cannot have a market value that exceeds the loan limit in your area.
Which Areas a Eligible for a USDA loan?
For the most part, areas that have a population of less than 35,000 people qualify. However, to be sure please check your property address using the link below.
How Can The Funds Be Used?
In general, the funds can be used to buy, build or renovate a home in an eligible area. Funds can be used for the following purposes:
- Purchase of an existing or new property to bs used as your primary residence. You may also finance the closing costs so there is truly no out of pocket expenses.
- The rehabilitiation and costs to repair the purchase of your home.
- Refinancing an existing home if your current loan is eligible.
- Improvements to accomodate a disabled person who will live in the home (ie ramps, etc)
- Fees related to connecting your home to the utilities (water, electric, sewer, etc)
- Escrow accounts needed at closing for real estate taxes and/or insurance
- To purchase the required home equipment such as appliances, furnaces, air conditioning, etc
- Energy efficient improvements
- Any additional site preparation such as fencing, landscaping, grading, trees/shrubs, driveways, etc
If you and your home meet the criteria above, we think that a USDA loan would be a no brainer!
Frequently Asked Questions – USDA Home Loans
Q: What is the payback period?
A: Loans can vary from 15 years up to as much as 38 years for very low income applicants.
Q: Do I have to be a first time homebuyer to qualify?
A: No, if you and your future home meet the program eligibility guidelines, then you may use this program to purchase the home regardless as to whether you are a first time home buyer.
Q: If I filed for bankfruptcy, can I get a USDA loan?
A: Yes, one year after a chapter 13 bankruptcy and 3 years after a chapter 7 bankruptcy.
Q: Can I finance a modular home?
A: Yes but there may be additional appraisals required.
Q: Is there a minimum credit score?
A: Typically, the minimum credit score is 640
Q: Are the USDA rates higher or lower?
A: The USDA rates are extremely competitive. CLICK TO CONNECT WITH A USDA LENDER to get a no obligation rate quote and to see if you qualify.
Q: Can I finance the closing costs?
A: In many instances yes you can finance the USDA closing costs.
Q: Does the home need to be in a rural area?
A: Yes, the home must be in an area that the USDA considers to be rural.
Q: Are there income limits?
A: Yes, your income may not exceed the maximum for the county that the home is in.
We are able to help you to find an USDA home loan with the best USDA lenders in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.