Not everyone wants to live in a big city. That’s where USDA Loans come in! For those that want to live in the country, or even a small town, these loans can help you get the home you’re looking for!
What Is A USDA Loan?
This is a loan that is insured through the United States Department of Agriculture, or USDA. The goal of these loans is to improve rural development in smaller towns and can help with lower-income people in these areas.
What Are The Requirements For A USDA Loan?
There are a few things to keep in mind when it comes to meeting the requirements for a USDA Loan.
As stated above, the property needs to be within a rural area. Each state has different requirements as to what qualifies as a rural area, but generally, if the town has a population less than 35,000 people, it would qualify.
This property must also function as the primary residence. Vacation homes, farms, and business properties wouldn’t qualify.
There are also some properties that will not fit within USDA requirements, such as modular homes.
USDA Loans tend to be geared specifically to low-income families. The requirements differ from county to county, but generally a household of between 1-4 people can make less than $90,000 and qualify for a USDA Loan.
This is where the USDA Loan can be helpful, especially for those who are considered low income. While it’s helpful to have as much of a down payment as possible, some lenders can allow for a $0 down payment. Keep in mind, this doesn’t include closing costs and other expenses, but this can be a short term help for those in a tight financial spot.
However, this does mean that mortgage insurance will be required to insure the loan in the event of non-payment. This isn’t anything to worry about, though, as it’s not likely to break the bank, typically being only about $35 per month for every $100,000 borrowed.