Potential homebuyers today have many options available to them in the way of mortgage loan programs.
One loan program that offers many benefits to potential homebuyers is the USDA Mortgage Loan. Here is some information on the USDA mortgage, including what it is, who it’s for and steps to take if interested.
Officially referred to as the Section 502 Single Family Housing Guaranteed Loan Program, the USDA mortgage loan is a mortgage option offered to individuals or families living in rural and certain suburban areas in the United States.
Although the finance comes from lenders, the loans are guaranteed by the U.S. Department of Agriculture.
The purpose of the USDA’s loan program is to provide families with low-to-moderate income the chance to purchase a home in rural areas.
USDA loans do not require the borrower to have a down payment. However, because you’re not putting a 20 percent down payment, you’ll need to purchase private mortgage insurance (PMI).
Although the main eligibility requirement for a USDA mortgage is low-to-moderate income, there are other requirements applicants must meet to be eligible for the loan.
Although the home you’re hoping to buy must be in an area that is considered rural, you do not have to live on a farm.
What many don’t realize is that in almost every county throughout the nation, there are parts that are deemed rural. You can live only a mile or so from a large city and still be living in an area that’s zoned rural.
If the property you wish to buy includes a lot of acreage, the property may still be eligible as long as it’s not going to be used primarily for income-producing reasons. Properties used to produce income and vacation homes cannot be purchased with a USDA mortgage.
Here are some of the benefits of a USDA mortgage loan.