USDA Loans

USDA loans are designed to help creditworthy lower and moderate income individuals and families to buy a home in a rural designated area. These loans are beneficial to those borrowers that wish to by a home with no money down.

Many people think of rural home being farms way out in the country. But a lot of people are surprised when they find that a property within close driving distance is actually considered rural according to the USDA.

Some key advantages of USDA Rural Loans:

1. No down payment
2. Bona fide gifts allowed
3. Seller contributions allowed
4. Closing costs that lenders can charge are restricted (e.g. Loan Origination Fee cannot exceed 1%)
5. Some closing costs (including the USDA Fee) may be financed (less out of pocket expenses)
6. No monthly mortgage insurance (MIP)
7. Non-purchasing spouse allowed
8. Borrower allowed to borrow closing costs on an unsecured basis

To find out whether you qualify from an Income standpoint or the Property qualifies as rural you can go to the USDA Income Eligibility or the USDA Property Eligibility website.