What is a USDA Loan?
When a person decides that they want to move to an eligible rural location, the Department of Agriculture offers different types of loans, one of them being a USDA loan. This loan allows home buyers to purchase a home with no money down, as well as 100% financing to those who qualify. As long as your credit score is at or around the 600’s and you meet the other requirements, this loan may be easier to get approved than a regular mortgage. It is also a good idea to see what qualifies as ‘rural’ in your state. The USDA guidelines are loose, so you could live in a small town or suburb outside a larger city that qualifies. A USDA Loan is used to promote small town living by making rural land more affordable.
Do I qualify?
When applying for a USDA loan, here are some helpful things to keep in mind:
- What are your state’s income guidelines? You must meet these in order to qualify for a loan.
- How many people are living in your house? What is the average income of the surrounding area? Both these factors will determine how much you qualify for.
- Will the home you are buying be a vacation home or a rental property? You can only qualify for a USDA loan if it is your primary
- Are you a lower-income buyer? Since no down payment is required, it may be easier for a household with a lower income to get a USDA loan than a regular mortgage.
- What’s your credit score? In order to get the best deal possible on a loan, you have to have a decent credit score. Remember if your score is lower it could be because of credit errors, so be wary of those.
If you are looking to move to a more rural location, or prefer the convenience of purchasing a home with no money down, a USDA may be right for you. If you have any questions about applying, or are wondering if you qualify for this loan, call Butler Mortgage at 407-931-3800 for a free consultation.