8 USDA Rural Housing Mortgage Myths

8 USDA Mortgage Myths

When a mortgage lender or real estate agent suggests the USDA Rural Home loan to a new client, the offer is typically met with an eye roll and general avoidance. Here are some of the reasons why people avoid the USDA Rural Housing program and why they shouldn’t.

No Intention of Becoming a Farmer – This is one of the worst excuses available since the USDA program does not provide financing for a legitimate, income producing farm. The program is aimed at providing affordable home loans to qualified borrowers in areas that are deemed rural by the United States Department of Agriculture.

My idea of a home is within a nice neighborhood, not miles away from civilization – In reality, there are a number of neighborhoods and subdivision that fall within the “rural” designations of many counties. Most major cities around the country have areas on the outskirt that qualify for USDA financing.

I previously owned a home so I can’t use USDA – USDA can be used by people buying their first home or their 101st home. The qualifying rules do not discriminate against new buyers or experienced buyers.

There is no such thing as buying a home with no down payment – Other than the VA loan the USDA home loan program is one of the true programs that will give home buyers a chance to purchase a property without the need for a down payment.

Only people with perfect credit can qualify for true, no money down loans – The credit requirements for a USDA loan are quite similar to the guidelines for FHA. This means that people with scores below 680 have a good chance of getting approved for the mortgage.

If I don’t put money down then the interest rate will be much higher – There are cases in which the private mortgage insurance and even the actual interest rate on a conventional loan are higher for people who only pay the minimum down payment. However, the USDA rates are comparable to FHA mortgage rates regardless of the down payment.

My household income is just average – The USDA guidelines were specifically written for folks with income that is average for their area. In fact, people with high incomes often do not qualify for the USDA program because they actually make too much money.

I don’t own any coveralls and I can’t drive a tractor – once again, the term “rural” does not mean “farm.” Don’t worry, nobody is going to ask you to do any plowing or tend to any livestock if you get approved for a USDA loan.

To prove that there are a number of areas right around you that qualify for the USDA home loan, contact your mortgage lender today and ask them for a map of the rural zones. You will be pleasantly surprised.

Contact us below or apply online to see if you qualify for the USDA Rural Housing Mortgage in Wisconsin, Illinois, Minnesota or Florida!

Important Disclosure

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

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Filed under: 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 madisonmortgageguys.com. 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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