Subscribe via RSS Feed Connect with us on LinkedIn Connect with us on Flickr
Apply Online

USDA Rural Housing Loans

The United States Department of Agriculture (USDA) offers mortgages for people that wish to purchase or refinance a home located in a rural area. The USDA offers these loans through mortgage bankers, banks and credit unions. The general process is to have the file reviewed and underwritten by the mortgage banker or bank. Then the completed file is forwarded to the nearest USDA field office for final review.

USDA allows borrowers to take out a loan up to 100% of the appraised value of the home. The closing costs, as well as the funding fee, can be added to the loan amount if the appraised value is high enough. This means that a borrower can purchase a home with absolutely no money out of pocket.
Effective October 1, 2014, USDA now charges a 0.5% yearly fee that is paid monthly. The credit guidelines for the USDA loans are very similar to the FHA and VA guidelines.

USDA Rural Housing Purchase

In order to buy a home using a USDA mortgage there are two pre-requisite criteria that must be met. First, the home must be located in a rural zone, as defined by the current USDA mapping system. Secondly, the borrower’s income cannot be higher than the income guidelines established by USDA for that particular area. A mortgage loan officer can help the borrower find the information for both of these requirements.

USDA Rural Housing Refinance

Homeowners who currently have a USDA mortgage and are current on their mortgage payments may apply for a streamline refinance. This refinance is designed to lower the monthly payments by taking advantage of rates that are better than the homeowner’s current interest rate. The streamline refinance does not allow the borrower to receive any cash for other purposes.

Additional Resources
Guarantee Fee
Income Limits
Ineligible Areas

 

 



Related Blog Posts:

  • Who and What is Eligible for the USDA Home Loan? People have a natural desire to belong. Clubs, civic organizations and even companies tap into the basic nature of wanting to be associated with a particular group. Each group has its own requirements for allowing people to join. Some are quite exclusive while others will allow a diverse range of members. Along the same lines, certain people are eligible to participate in the USDA rural housing program and others are not.
  • New USDA Program Wants to Help Improve the Economy The fine people at the USDA office are doing their part to help America push itself out of the recession and return to a position of prosperity. In order to help people that may be struggling financially, the USDA launched the Single Family Housing Guaranteed Rural Refinance.
  • USDA Rural Housing: A True No Money Down Mortgage Thanks to the USDA home loan program it is still possible for people to purchase a home without the need for a large down payment. The major requirement for this loan is the location of the property. Only homes located in the areas deemed rural by the USDA will qualify. However, rural does not have the meaning that is typically considered by most people.
  • How Do You Qualify for a Rural Housing Mortgage? The USDA Rural Housing home loan is a great way for people to buy a home with a competitive interest rate and no down payment. In order to qualify for the loan there are a few requirements. Here is a guide to some of the basics of these qualifying rules:
  • USDA Mortgage: Common Questions Concerning a Home Purchase Potential homeowners who are interested in buying a property that is outside of traditional city limits may find that the best loan for their situation is the USDA Rural Housing home mortgage program. Here are some of the most common questions concerning this program.
  • Just What Is a USDA Home Loan? Most people hear the term USDA and they usually think of choice cuts of beef served at a fine restaurant. But there is another reference for the term USDA and that is the term of home loan. USDA actually stands for United States Department of Agriculture. The USDA offers home loans in rural areas all across the country. The most attractive feature of the USDA loan is the 100% loan limit. Home buyers can possibly obtain a loan up to 100% of the appraised value of the home.