The USDA Loan program is a 100% government program that is offered through the US Department of agriculture. This is an exclusive loan available to just the approved lenders. Most people residing in rural areas qualify for USDA as well as some, who live in the medium sized cities and also those who reside in the outskirts of major metropolitan regions. You can do a bit of more research to find out whether you qualify for a no down payment and even learn more about it.
The Advantages of A USDA Loan
USDA loans are very helpful as they have very low interest rates and also have no down payment programs. Ideally, they are currently one of the only programs that offer full financing on loans for home buyers. Some home repairs as well as improvements can also be eligible to be added to the loan. This makes it an even more appealing financing option for home buyers.
Other benefits include cheaper mortgage insurance fees, which doesn't change based on the down payment size. There’s also no specific limitation as to which amount can be loaned. In short, home buyers have a more purchasing power using USDA loans over a basic private home loan.
USDA Loan Eligibility
The USDA program is the most ideal option for those looking for a fixed rate and no money down mortgage as well as mortgage insurance. However, still the USDA program has certain restrictions on applicants eligibility, most notably being location and income requirements. For you to qualify for this kind of home loan, you should be purchasing a home in an USDA eligible area. The good thing is that there are many ares in the country that qualify, such as the Midwest, some areas in California and even in New Jersey. Secondly, the household income should not be over 115% of that region’s median income.
To make it clear, here are the Top 6 Reasons why you should have this loan:
1. There is no limit to which amount you can borrow.
2. It it a true 100 percent no money down loan
3. There is no great credit score needed.
4. No mortgage insurance
5. The rural areas are not necessarily that rural, as most people may think
6. Seller Concessions are allowed.
If the interest rates are relatively low during your time of application, the fixed rate variety will give you the best value and then you can count on your loan payment being the same year after year.