If you are in search of mortgage loans, then you can consider USDA loans as they have a lot of benefits. USDA loans stand for USDA rural development guaranteed housing loan program which are NLC loans provided by the United States Department of agriculture. The USDA loans are developed for the rural areas; they have a number of different qualities that make them the preferred choice for the homebuyers. From this article, you would be able to know about its various qualities that attract the buyers.
Qualities of the USDA loan program
- These loans are just not for farmers- A lot of people might think that USDA loans are for farmers only but USDA loan program is for residential properties. Although the home that you are planning to purchase can be in the rural area, this program also includes homes in suburban areas and at times homes in a few mid-sized cities are also eligible for this program.
- Don’t require down payment- There is no need for a down payment because if you opt for a USDA loan then you can finance 100% of the purchasing price.
- The mortgage insurance is affordable- USDA loans require mortgage insurance in order to keep the program going; which involves a 2% upfront fee, 40 % annual fee.
- Covers a wide range of properties- The USDA loans cover a wide variety of properties; which includes, the existing homes, new construction, modular homes, planned unit developments and condominiums.
- There are income limits in USDA loans- USDA loan programs are affordable and is designed to make owning a house easy for rural families. To qualify for a USDA loan program the income should fall in the following categories; 1-4 family members $74, 750 and 5 -8 family members it should b $ 98, 650. There are some areas where the cost of living might be high than the overall average, so the income limit can be adjusted.
Things to know
Earlier, in this article, we spoke about the qualities of the USDA loans but there are certainly other important things that one should know before applying for one:
- You will not qualify if your income is quite high.
- Your home should be in an eligible area; you can check out the eligibility of the site before applying for one.
- You can only get this loan for the property you are currently residing in or you will be occupying.
In order to take advantage of the USDA loan program, there is no need for one to be a farmer; anybody who meets the income, as well as the location requirements, can qualify for this kind of loan program. USDA home loan has a lot to offer when buying a home in a rural with a 0% down payment. Overall the USDA loan is an affordable loan program; the mortgage rates can differ so check the rates before taking a loan.
