Who Can Qualify for USDA Loans?
USDA loans are a great option for those who are looking to move to undeveloped locations. If you have applied for private financing and have either gotten denied or received a very high interest rate, USDA financing might be your best option.
What is a USDA Loan?
This is a government insured program that gives home loan financing to people looking to move to undeveloped locations-more specifically rural areas. The money is provided by the US Department of Agriculture. There are 2 main qualifications for USDA loans. Here they are:
Location: As mentioned, a USDA Guaranteed Loan is for those going to rural locations. Most people who move to rural locations are able to get this financing. Of course, rural is a rather vague definition. More specifically, the house must be somewhere with a population of 20,000 or less. While the term area is a bit indefinite as well (and the government does not provide further clarity), the main thing to remember is that it cannot be in a big city.
Income: A USDA Home Loan is only for those with low to moderate incomes. If you do not fall in these brackets, you will not qualify.
One of the main advantages is that there is no down payment required for the USDA Loan Program. The repayment terms are quite lenient, as they are often for 30 years or more. Therefore, the monthly payments are lower than with other financing.
Also, the interest rate is generally under market value. The rates and terms are determined based on the lender you go through. For this reason, be certain you shop around and compare the interest rates before choosing any lender, as this is the best way to find the top deal.
There are no limits to how much you are able to borrow with a USDA Loan. Therefore, if you were only able to obtain a limited amount with a private company, this might be one to go with. You do not need mortgage insurance either with this form of financing, which you might with some private companies. Another great benefit is that your credit score will not be checked. Therefore, those with poor credit are often able to qualify for a Rural Development Loan.
Many locations have lenders in the area that offer this financing. If not, you might want to go through a broker. In addition, you can go right to the local Department of Agriculture Service Center, if you have one around you. Sometimes the real estate agent you work with will have information about where to apply for a USDA Home Loan Program as well.
USDA loans might be a good option for you. It really just depends on your circumstances (i.e. where you are moving and your income). Just go to the nearest USDA Rural Development Loan to you, and find out if you qualify. If you have applied for private financing and found the terms were not favorable, this is certainly something you might want to check out.
At USDA Home Loans you will be able to find information related to the USDA Rural Development home loan program, guidelines, eligibility requirements and fill out an application. It is the premier resource for any potential home buyer interested in taking advantage of these lucrative government-backed USDA Home Loan Program, so start today with a no hassle, free consultation.
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