Here, we’ll take a look at some of the key facts surrounding USDA loans, so you can see if you qualify and get a better idea of what you’re signing up for.
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What Is a USDA Home Loan?
A USDA loan is a loan that is granted by the United States Department of Agriculture (USDA). Whether you’re looking for a new home or are in need of a way to upgrade (or repair) the home you already have, a USDA loan is one way the federal government provides aid to those in rural areas. Each year, the government provides aid to tens of thousands of families in lower-income areas in the form of USDA loans.
In general, these loans require zero down payment and have very low interest rates, so if you qualify, they can go a long way toward helping you realize your dreams of homeownership.
Beyond the general criteria listed above, USDA loans exist in different forms– specifically in three different loan programs:
- Loan guarantees. If you’re applying for a more traditional mortgage but qualify for a USDA loan and want to take advantage of the low rates and zero down payment, the government may guarantee your loan with a conventional lender. It is important to note that in these situations, you will be required to pay a mortgage insurance premium on top of your monthly payment.
- Direct loan. These are loans issued directly from the government, where you can enjoy interest rates as low as 1% after subsidies.
- Home improvement loans or grants. If you’re already a homeowner but want or need money for upkeep, the USDA may issue qualifying borrowers a loan or financial award up to $27,500.
Another detail to keep in mind is that USDA loans are for houses valued under the area home limit. Depending on what part of the country you’re in, this could mean a loan amount of anywhere from $100,000 to $500,000 (or even higher in certain areas, like California).
And before you assume that you don’t qualify for this type of loan because of the name: no, you do not need to be in an agricultural profession to receive a USDA loan! So long as you live in a rural area (and in some cases, even a suburban one), you may be eligible if you meet the conditions below.
How Can the Home Loan Expert Help?
If you think you may be eligible for a USDA loan or a USDA refinance but aren’t sure how to go about getting approved, we are more than happy to lend a hand. The Home Loan Expert team is here to provide mortgage help quickly; whether you want to purchase a home or refinance your existing mortgage, our 5-Minute Loan Approval*will get the process started in no time!
If you’re unsure of whether or not you may qualify for a USDA loan, our Experts are happy to walk you through your qualifications and all of your potential mortgage options. So give us a call or take advantage of the Live Chat option today!