In order to develop more rural areas across the nation, the United States Department of Agriculture (USDA) has started offering a very attractive home loan program. This home loan is targeted not only to first time home buyers like most programs, but is designated to certain areas. Of course, as with all loans, there are certain stipulations and criteria that you must meet to qualify.
The most important qualification is the household income. Based on the household gross income (income before taxes), the maximum allowable income for a family of 1-4 members is $88,400. For a household with 5-8 members, the maximum income amount to qualify for this loan is $116,700.
Another qualification for this loan will be your credit score. Now, it doesn’t have to be perfect or close to it like it does with other loan programs so don’t stress! As long as your score is close to 620 or higher, you should be able to qualify for the loan.
If you qualify for the USDA home loan, you will find many benefits. First of all, other loans require a down payment of 3.5% or higher. The USDA loan program has a zero down payment. That’s right; you can finance 100% of your new home and don’t have to put any money down! That being said, another great factor in the USDA loan program is that you can roll your closing costs into the loan (up to the appraised value). This is the only loan in which it is possible to finance the closing costs.
Another great aspect of the USDA home loan is that you will receive phenomenal interest rates! These rates are extremely low and will be fixed so your payment will not increase for years to come. Also, the monthly PMI (private mortgage insurance) will be low. This makes purchasing a new home more affordable than ever! In addition, there is no cap on this loan. Both conventional and FHA loans have maximum loan amounts, but not the USDA loan.
With all of the benefits of the USDA home loan it is definitely easier today to purchase a new home. Many factors in this loan will not only help you to get approved for the loan, but also to save money which will make the entire home buying process more affordable.