USDA Loan Versus a Conventional Loan

USDA versus Conventional Mortgage

Owning a car does not make the owner a mechanic. Using a computer does not make a person an electrical engineer or a software engineer. And buying a home does not make someone a lending expert. That is why it is so important for people to get solid information about the different types of loans available before they make their final decision on a home purchase. The USDA mortgage is simple to understand once the facts are laid out.

Understanding the Term “Rural”

Rural has lots of different meanings to lots of people. In the context of the USDA home loan program it simply means an area has been designated as an eligible lending area. Any single family home that is within a rural boundary, as determined by USDA, can be eligible for a home loan. Some of these areas are on the outskirts of major towns like Madison, WI or Chicago, IL. Other times a whole county may be labeled as rural.

Limits on Income

The other main point to understand is the income limitations. In a nutshell, people with low to moderate incomes will be eligible for the USDA loan. This loan is not for the top earners in a given area. The number of people living within the residence also plays a role in determining the overall income. A mortgage lender with experience handling USDA loans can provide more insight into the exact rules and guidelines for this type of mortgage.

Potential for No Down Payment

One of the biggest selling points of the USDA loan is the possibility of no down payment. USDA will allow borrowers to receive a loan up to the appraised value. If the seller is willing to negotiate it is possible to have most, if not all, of the closing costs included in this amount as well.

The credit guidelines, as well as interest rates, compare favorably to the rules and rates used for an FHA loan. People who don’t mind living just outside the city, and have a modest income, would be wise to consider a USDA mortgage as their means to purchase their next home.

Contact us below or apply online to see if you qualify for a USDA Mortgage!
Important Disclosure

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

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Filed under: USDA Rural Housing, Wisconsin Blog

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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