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USDA Home Loans: The Best Kept Secret In Town

What Is The Big Secret About A USDA Home Loan?

The real name for this type of loan is: USDA Guaranteed Loan Program and is a federal program offered via the United States Department of Agriculture. Yes, we know it sounds kind of strange that an agriculture department would be in the lending business; but it\'s a fact. And quite frankly, it\'s also one of the best loan programs available today. Basically, it is for "small town" homes that sit outside larger metropolitan areas and suburbs. And whether you are eligible to avail yourself of this unique program will ultimately depend on the population maps. Some areas may be included; some not. For example, a property in a city with a population of, say, 44,000, would not be eligible. However, if you travel outside the city limits to a neighboring community of 18,000 population, you can use this USDA home loan program.

Who Can Get A USDA Housing Loan?

Well, first your qualifying will depend on the approved lender and there aren\'t many who even know about this loan program or even have employees who understand the paperwork involved. The reason you need to search for a lender is that the USDA, like FHA, only guarantees the loan the approved lender makes. The funds do not come from any government site. This means that on several occasions and areas of the country, the fed\'s have stopped funding the program entirely or are providing less money. This is why you should contact any local approved lender to see if money is still available. Just make sure your query includes these words: USDA Rural Housing Guaranteed Loan Program.

What Are Some Advantages In Seeking A USDA Home Loan?

For starters this excellent loan product offers benefits for those who qualify and you\'ll certainly like these numbers:

  • USDA 100 percent loan financing with NO gimmicks.
  • Low monthly MI (mortgage insurance).
  • Lower interest rates than most conventional lenders can offer.
  • Lower qualifying ratios than conventional lenders.
  • Low closing costs.
  • Zero, Nada, Zip down payment.
  • Never any pre-payment penalties with this program.
  • Qualifying credit ratios are much easier for those with a marginal credit history.

In many cases, qualifying will or can involve "mitigating factors" such as job tenure.There is no doubt that the USDA Home Loan program is one of the best purchase programs available anywhere in the country. Also, if you had at one time or another used the USDA Rural Housing Guaranteed program and don\'t particularly care for the interest rate, you are eligible for a USDA home "streamline" refinance much like what is currently being offered via FHA. You can use the Internet to fill out a quick and easy refinance application to see if your home qualifies. Knowing that this USDA loan exists, there is no reason for you to keep twiddling your thumbs waiting to get funds for a down payment. With this program, you don\'t need any.