USDA Loans

To be eligible for a USDA loan, a property must be located in a rural area designated by the USDA. Borrowers should check the USDA’s eligibility map to determine if the property they are interested in purchasing is eligible for financing.

One of the biggest benefits of a USDA loan is that it allows borrowers to finance 100% of the purchase price of a home. This means that there is no required down payment, which can make it easier for borrowers to afford a home, especially for those who may not have a large amount of savings.

USDA loans require a monthly mortgage insurance premium, but this premium is typically lower than the mortgage insurance required for other types of government-backed loans, such as FHA loans. Borrowers who are taking out a USDA loan should be prepared to pay this monthly fee, which can result in a slightly higher monthly payment.

USDA loans have income limits that are based on the household size and the area in which the property is located. Borrowers who are taking out a USDA loan should be prepared to provide information about their income and household size, and they should be aware that they may not be eligible for financing if their income exceeds the limit for their area. Additionally, USDA loans are only available to borrowers who do not own other properties, so those who already own a home may not be eligible for financing.