You don’t have to live out in the country to qualify for USDA Rural Development Loans!
USDA home loans have been helping rural Americans become homeowners since 1949. It has invested well over $54 billion in helping people purchase their own homes.
Owning your own home is a part of the American dream, but in rural areas, financing a home can be difficult. Jobs often pay less than in more populated areas, making it harder to obtain credit. Also, rural lenders generally require a large down payment, and often, interest rates and construction costs are higher than in urban areas. However, if you want to own a home in a rural area*, the U.S. Department of Agriculture (USDA) Rural Development may be able to help.
The Guaranteed USDA Rural Housing program agrees to guarantee a loan so the lending institutions can help buyers while incurring less risk.
USDA Rural Housing program highlights:
- Moderate income limits apply – based on family size (see below)
- No down payment required.
- No Prepayment Penalties.
- Purchase: 2% upfront fee that can be rolled into the loan
- Refinance: 2% upfront fee that can be rolled into the loan
- 0.5% Yearly fee paid monthly – Effective 10/01/14 USDA Rural Housing to increase Annual Fee
- A one-time guarantee fee is paid at closing. In some cases, this fee, closing costs and repairs may be included in the loan.
- Competitive 30 year fixed interest rates.
- No maximum loan amount.
- No limits on cash contributions.
- Not restricted to first time home buyers
- Home must be occupied as your permanent residence.
See if your income qualifies for a USDA Rural Housing loan
Check to see if the property is in an Eligible Area for Rural Housing Loans
Income Qualification Information:
The most accurate way to check your income for qualification is to use the USDA Income Calculator. The calculator on USDA’s website is most accurate because it is based on area income limits minus any deduction you can take to offset your income. The most common income deduction is for child care expenses. For general purposes, you can also view the most recent income limits with a county by county breakdown by family size from the pdf files below.
Ineligible Areas for USDA Rural Housing loans:
if you know the address of a property that you are interested in, you can go to USDA’s website to determine if a specific address is eligible (click the accept button and then type in the address). If the system is unable to determine eligibility based on the address you entered, that does not mean it is not eligible. It just means the system couldn’t find the address, so it is unable to determine eligibility. At this point, you can either contact us us and we will help in determining if the property is eligible or sometimes it is just a matter of entering the correct format of the street to get the system to find the property (what I call HWY M is really County Road M according to the system).