If you are someone who prefers a home in a rural area instead of the city blocks, you should consider checking for USDA loans. For the uninitiated, USDA loans, officially also called ‘USDA Rural Development Guaranteed Housing Loan Program’, allow people to buy properties in approved rural areas. You can get a zero down-payment mortgage loan, with low interest rate from United States Department of Agriculture. In 2017 alone, the program has helped over one lakh families in buying and upgrading their rural homes. Before you look online for USDA home loan, here’s what you need to know.
Quick check into USDA home loans
There are three different options in USDA home loans. The first is a loan guarantee from USDA, which means you can get a loan from an approved local lender with a low interest rate and zero down payment (subject to certain terms and conditions). USDA also offers a second choice, which is a direct loan for low-income groups, but the terms can vary from one region to another. The third option is a loan or grant from USDA, which is offered to homeowners to improve and upgrade their homes, and assistance can be as much as $27,500.
Expectedly, you must be a citizen or the United States or should have permanent residency to buy a home. The applicant is also expected to have a dependable source of income for two years. An acceptable debt ratio is also very, very important, but then, keep in mind that this vary from lender to lender. Income of the applicant is also considered, which shouldn’t be more than 115% of median income of the area.
Things to do
Typically, you will have to look for USDA-approved lenders and get approved, and once that’s done, you will get a letter from the lender, which gives an idea of how much you can afford. As mentioned, these loans are only available for areas and homes that have been approved by USDA, so make sure that you are working with an agent, who can identify properties that have been approved. It is also important to check for USDA loan appraisal, for which details can be found online. Once the USDA appraisal has been checked and reviewed by the lender, a call will be taken on the loan.
Check online now and find more details on USDA loans to know if you can qualify.