What is a USDA Loan?

USDA U.S. Dept. of Agriculture

The rural housing loan is a federal loan program that is used to help low income borrowers to purchase homes in rural areas. USDA Loans are for non-farm homeowners in rural areas and are also for rural housing development.

The United States Department of Agriculture’s (USDA) Rural Housing Service guarantees loans up to 100% financing for qualified customers living in rural areas around the country.

USDA Home Loan Benefits:

  • 100% Financing Available – No down payment required.
  • Low monthly mortgage insurance – you may qualify for a larger loan.
  • Flexible credit and qualifying guidelines.
  • No maximum purchase price limit.
  • Closing costs can come from any source, including gifts.
  • Repairs and improvements can be included in the loan.
  • Competitive fixed 30-year rates.
  • 100% financing options available
  • Thin or alternate credit allowed

USDA loans are granted based on the following:

  • Property eligibility: Homes must be located in an eligible area.
  • Borrower’s income eligibility: Borrower’s household income meets program guidelines
  • Acceptable credit history: Borrower’s credit history should reflect a willingness to meet financial obligations.
  • Public records and/or collections do not automatically negate a borrower from a USDA loan, but additional documentation will be required.