As one of Colorado’s leading mortgage specialists, from time to time we hear from potential homeowners interested in learning more about USDA home loan eligibility. An exciting mortgage opportunity that many American’s simply do not know about, there are many benefits to the USDA rural loan program. Before we dive into eligibility requirements, let’s first take a look at the many benefits of this type of home loan.
The Benefits of a USDA Home Loan
The Section 502 Guaranteed Rural Housing Loan Program was created to help rural residents, with a steady income, who are unable to secure conventional mortgage financing. Only offered in particular counties in the US, the USDA rural home loan program requires no down payment and typically comes with a more competitive interest rate than other products on the market. That’s right, in most cases, the USDA rural home loan program enables eligible individuals to secure their piece of the American Dream at a below market interest rate and with no money down. It is important to note that USDA Mortgages do require an upfront mortgage Insurance payment of 2% of the purchase value of the home. This fee is used to cover the cost of the rare instance in which an individual defaults on a USDA loan. This 2% fee can be wrapped into the total loan amount and comes at a much lower cost than PMI coverage which is required on FHA loans.
USDA Home Loan Eligibility
The USDA Guaranteed Housing Loan is designed to cater to the average borrower with a steady, low to modest income. USDA home loan eligibility requirements:
- The home must serve as an owner-occupied, primary residence
- The borrower’s must meet USDA income limits
- The borrower must be a US citizen or permanent resident
- The borrower must meet credit and income requirements, set forth by the lender and the USDA. In most cases this includes a minimum credit score of 620 and no foreclosures or major delinquencies in the recent past
- The property must be in an area deemed eligible by the USDA
If you meet the above USDA home loan eligibility requirements, and you are ready to explore the opportunities available to you through this program, we encourage you to contact us today! At Banner Mortgage, we are seasoned professionals, with extensive experience in USDA mortgages. We have the knowledge and experience to walk you through the entire process. Allow us to help you claim your piece of the American Dream!