What Is A USDA Loan?

The US Department of Agriculture created a loan available to rural residents who are in need of owning a home while promoting rural development in areas that are underdeveloped. Most USDA loans are financed through the USDA Rural Housing program.

For any person who qualifies for this type of loan, 100 percent financing is offered. The opportunity for this loan is often overlooked as a wonderful opportunity offered to prospective home buyers. For those who do not want to consider a rural area to live in, surprisingly, there are usually other eligible properties nearby. Rural does not always mean remote. In fact, most are very close to metro areas.

To be eligible, the borrower and property are both factors. The property must be within the eligibility requirements of residence. Any borrower applying for a USDA loan must meet all income requirements as there are some people who have an income which exceeds the allowable limit. Employment and proof of being a United States citizen or being a national non-citizen are necessary to apply.

In 2009, the American Recovery and Reinvestment Act set guidelines for this loan which made it more streamlined while opening doors for higher rates of eligibility. It is necessary that any buyer meet the income requirements as well as provide a recent credit report for review. Keep in mind that the guidelines aren’t as strict as in the past.

In summary, it is imperative to know that this loan program varies from state to state but generally falls into any area with at least 20,000 residents. Many smaller suburban communities may qualify. Meeting the program requirements varies from county to county based off of the median average income for the particular area.

Contact A Professional Today