Qualifying for a USDA Loan

There are many loan programs, and it can be hard to know which is the right choice for you. We can educate you on what loan fits your lifestyle, budget and needs. If you’re looking at homes in a rural area, you might qualify for a USDA loan.

What is a USDA Loan?

The U.S. Department of Agriculture (USDA) grants or guarantees loans for those looking to buy homes in rural or suburban areas. Through this loan program, a borrower can qualify for as little as zero percent down. Millions of people relocate from cities to these areas each year, and if you’re one of them it might be an excellent opportunity to explore a USDA loan.

USDA Loan Programs

There are three ways to qualify for a USDA loan. First, you can qualify through a local lender. This loan is similar to an FHA or VA loan since they have low-interest rates for little or no money down. However, this means you will have to pay mortgage insurance. The second method is getting a direct loan through the USDA. Some income thresholds depend on the region, but interest rates can be as low as 1%. As a last option, you can use a USDA loan to enhance your home. Sometimes these home improvement programs use a combination of loans and grants.

USDA Loan Eligibility  

USDA loans are specifically for lower-income rural and suburban areas. There is a map and table, along with a portal, to help determine USDA eligibility depending on income levels. Typically, U.S. citizenship, proving you can successfully make monthly payments, proof of income for at least 24 months and a good credit history are all requirements. Direct USDA loans are available for those with a certain circumstance. If you are without decent, sanitary living or have an income at or below your area’s limit, you may qualify for a USDA loan.

If you have questions regarding a USDA loan, please contact one of our Loan Advisors today to learn more about our programs.