A USDA Loan is a mortgage loan that is insured by the US Department of Agriculture and available to qualified individuals who are purchasing their home loan in an area that is not considered a major metropolitan area by USDA.
- Great for First-time Home Buyers
- 100% Financing (including Closing Costs)
- No Down Payment Requirements
- No Prepayment Penalties
Benefits of USDA Loans
- 100% Financing - you can buy a home with no money down. In some cases you can even finance your closing costs.
- Low Fixed Rate Mortgage Options.
- They are usually easier to get because the Government insures the loan so that there is much less risk to the lender.
- They can be used for Existing Homes, Foreclosures or New Construction.
- Simple Loan Process.
- No Loan Limit.
- There is No Prepayment Penalty.
- Flexible Credit Requirements.
Who is eligible for a USDA Loan?
Generally these loans are available to anyone who meets minimum credit guidelines and local area income requirements and is purchasing a home in an area that is not considered a major metropolitan area by USDA.
Some common misconceptions of USDA Loans:
- They are just for farmers - USDA Loans are not "just for farmers," millions of people from all walks of life already qualify.
- Only certain people can qualify - Anyone who meets the income and credit guidelines can qualify for a USDA Home Loan.
- They are only for rural areas - Actually, USDA Loans are available in many areas that most people would not consider rural. For example, many small communities just outside of metropolitan areas qualify as rural areas according to the US Department of Agriculture.