What is a usda mortgage
What is a USDA Mortgage?
What is a USDA Mortgage?
USDA, it isn’t just for that prime steak you’re looking to throw on your BBQ. It stands for United States Department of Agriculture.
How does that have anything to do with a mortgage? A USDA Mortgage provides low-cost, low rate, insured home mortgages for people who want to become home owners in rural areas.
A USDA home loan might be right for you if you want to live in a rural area and purchase a home with no down payment. The other great thing about a no money down USDA mortgage is that it’s very similar to an FHA Mortgage when it comes to your credit. A USDA home loan from http://www.usdamortgageonline.com can give you peace of mind with no down payment and great 30 year fixed interest rates.
What Types of Loans does USDA offer?
Currently, there are two kinds of USDA home loans available for single family households:
USDA Guaranteed Rural Housing Loans:
USDA Guaranteed Loans are the most common type of USDA home loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area.
Contact Us to see if you qualify under your area’s income limits for this program.
USDA Direct Rural Housing Loans:
USDA Direct Housing Loans are only available for low and very low income households to obtain home-ownership, as defined by the USDA. Very low income is defined as below 50 percent
of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Contact Us to find out what the area income limits are for this program in your area.
What are the advantages of USDA home loans versus Conventional Loans?
USDA home loans offer many benefits and protections that you won’t find in other loans including:
USDA loan requirements are not totally credit score driven, although it is required to have at least a 620 FICO score to obtain an approval with most lenders. USDA loan guidelines are written in a way that provides the borrower the benefit of the doubt that there had been, at some point in their past, circumstances beyond their control, and as long as the borrower has recovered from those circumstances in a reasonable manner, they’re generally going to be credit-eligible for a USDA mortgage.
USDA Rural Loans NOW require Monthly Mortgage Insurance:
As of October 1st, 2011, all USDA loans require monthly mortgage insurance (MI). The daily USDA Mortgage Rates are usually lower than a conforming 30-Year Fixed loan and very comparable to a 30 year fixed FHA Mortgage !
USDA loans do not require a Down Payment:
USDA Mortgages do not require a down payment making it one of the two true No Money Down mortgage programs available. Other loan programs don’t allow this. A conventional loan will require anywhere from 3% to 5% down, an FHA Mortgage is going to require 3.5% and a VA Mortgage is the other no money down option available.Source: usdamortgageonline.com