Making the Case for the USDA Purchase Loan

USDA Purchase Loan

If you are thinking about buying a home in the near future you likely want to get the best rate along with the lowest down payment. Basically, you are looking for a deal similar to buying an automobile. The type of mortgage you get will be based on quite a few factors such as:

  • How much money can you reasonably afford for the down payment?
  • What area would you like to live in?
  • How much will you be able to afford monthly for the principal and interest payments along with home owner’s insurance and property taxes?
  • How strong is your credit score?
  • Are you considering a loan higher than $424,000? (loans higher than this amount require a Jumbo mortgage)

For a wide range of people, the USDA rural housing loan will actually be a wise choice. Here are some of the advantages of the USDA loan.

  • No Down Payment Required – This is the most well known advantage of the USDA mortgage. It is possible for the borrower to get a loan equal to the appraised value. This means that if the home appraises for $165,000 and the seller is only asking $160,000 for the home then the buyer has $5,000 that can be used for closing costs (cash back for other things is not possible).
  • Extremely competitive interest rates – Over the last 3 years the mortgage rates offered by the USDA program rival the rates for FHA loans.
  • High income not needed – The USDA has rules about who can qualify for the loan. In general, people with moderate to lower incomes are ideal applicants for this type of loan. Borrowers that have a high monthly income usually make too much money to qualify for the loan.

It is important that potential borrowers understand that the home they wish to buy via the USDA mortgage is located in a rural zone designated by USDA. Your lender can look up the home by the address and let you know if the property is within such a zone.

In general, the USDA loan has fewer fees than an FHA mortgage and provides an opportunity to buy a home with no down payment. For many potential home buyers that is a match made in heaven.

Contact us below or apply online to see if you qualify for the USDA Rural Housing Mortgage!

Important Disclosure

For all USDA mortgage loans, property and income restrictions apply.

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Filed under: Minnesota Blog, USDA Rural Housing

Luke Skar

Luke Skar is the web developer and content strategist for Inlanta Mortgage in Madison, serving Wisconsin, Illinois, Minnesota and Florida. Guided by his 12-plus years of various mortgage marketing experience, Luke provides top-quality SEO services, effective social media management, and web development and maintenance. Luke’s career in the mortgage industry began back in 2001, as a loan processor. After becoming a loan officer for a number of years, Luke is now the sole owner/operator of To ensure that all the information he posts is fresh, accurate, and up-to-date, Luke relies on the knowledge which his years of dedication to keeping up with the constant change that the mortgage industry provides.


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