USDA Home Loans

USDA loans are a type of mortgage guaranteed by the U.S. Department of Agriculture (USDA). They're meant to make it easier for people in rural and suburban areas to become homeowners. In this guide, we'll talk about USDA loans' essential features and advantages.

  • A USDA loan is great because you don't need to make a down payment. You can buy a home without putting any money upfront. But keep in mind, that you'll still have to pay for things like closing costs and other expenses.

  • A USDA loan requires an appraisal to determine the home's value. This is done by a licensed appraiser and paid for by the borrower. The appraisal helps make sure the loan amount matches the home's value.

  • To get a USDA loan, most borrowers usually need a credit score of 640 or higher.

  • USDA loans aid low to moderate-income borrowers in buying a home. Eligibility relies on meeting income criteria based on location and family size.

  • USDA loans come with fees, which include an upfront guarantee fee and an annual fee. The upfront guarantee fee is usually 1% of the loan amount and can be added to the loan. The annual fee is typically 0.35% of the loan balance and is spread out into 12 monthly payments included in the borrower's mortgage payment.

  • USDA loans are meant to assist borrowers in buying homes in rural and suburban areas. To qualify for a USDA loan, the property you want to buy must be in a designated rural or suburban area. You can visit the USDA website to check if the property you're interested in qualifies.