The 100 percent USDA home loan provides a great opportunity for home buyers thinking about buying a home in the nations rural or suburban locations. Many home buyers are not even aware the USDA / Rural Housing offers government backed home loans through approved USDA lenders in eligible rural locations. Even more surprising are the areas that are still considered USDA rural eligible, even in Florida – many suburbs right outside of Orlando – Tampa – Jacksonville – Sarasota – Tallahassee and Gainesville are still approved for the 100 percent USDA home loan.
Below we will discuss the USDA Rural Development Single Family Housing 502 Guaranteed Loan Program, explain the benefits of this mortgage program and how to determine if you can qualify.
What exactly is a USDA Rural Loan?
The 100 percent USDA home loan program is a program where the federal government will guarantee or “back” a mortgage loan as long as the applicant meets certain criteria. The intent of this program is to encourage rural development, and provide an easy means to obtain mortgage financing with no down payment. The USDA mortgage is a great solution for those who are looking for 30-year fixed rate loan with no adjustable terms or early pay off penalties.
USDA Mortgage Loan Benefits
There are numerous USDA mortgage benefits especially for first time home buyers that have limited cash saved up. USDA loans offer full 100 percent financing so you won’t have to place a large down payment when buying the home. In addition the home seller can pay all the buyers closing costs. The USDA offers very competitive 30-year fixed interest rates, along with low mortgage insurance costs. There’s also no maximum home purchase price or loan amount limits with USDA mortgages. Eligible home buyers qualify for what their debt-to-income ratios allow.
USDA Mortgage Loan Requirements
The USDA mortgage program is open to all home buyers that meet a number of initial requirements. The home you intend to purchase has to be located in a approved rural area and it cannot be a vacation home (2nd home) or investment property. The home seller can be just about anyone – bank, real estate company, distressed sale, foreclosure, etc. USDA just requires the property address is approved according the USDA loan map here. As with all loans these days applicants will need a decent credit history – generally a minimum of 620 credit score. Finally, the annual gross income for the entire household must be below the limits USDA sets for each county. The current USDA income limits can be found here.
It’s easy to see that the USDA Rural Development Mortgage program can be an excellent option if you’re planning on buying a home in a more rural or suburban area. Contact Five Stars Mortgage by calling 800-871-2636 with any questions about getting approved. For quick service please submit the “Request Contact” form at the top of your screen. The USDA application process is simple and often done is less than 30 minutes.