Designed for low-to-moderate income borrowers, a USDA loan offers flexible guidelines and no down payment.
What is a USDA Loan?
USDA loans are government insured for purchasing within a designated rural area. USDA loans help low- and moderate-income borrowers in rural areas buy a home.
Here are some situations when you might consider getting a USDA loan:
- You’re looking to buy a home in a rural area: USDA loans are only available for properties located in eligible rural areas. If you’re looking to buy a home in a rural area and meet the income and credit requirements, a USDA loan can be a great option.
- You have a lower income: USDA loans are designed to help low- and moderate-income borrowers. If your income falls below the limit for your area, you may be eligible for a USDA loan.
- You want to buy a home with no down payment: USDA loans offer 100% financing, which means you can buy a home without making a down payment. This can be a huge advantage, especially for first-time homebuyers who may not have a lot of money saved up.
- You have a less-than-perfect credit score: USDA loans have more lenient credit requirements than conventional loans. If you have a lower credit score, a USDA loan may be a good option.
- You want a competitive interest rate: USDA loans typically offer lower interest rates than conventional loans. This can save you a significant amount of money over the life of your loan.
It’s important to note that USDA loans come with some requirements, such as income and property eligibility restrictions, that can limit who qualifies for this type of loan. However, if you meet the requirements and are looking to buy a home in a rural area, a USDA loan can be a great option. Be sure to consult with a mortgage professional to determine whether a USDA loan is right for you.