USDA Loan Programs Overview
What Is A USDA Rural Home Loan?
In short, a USDA Home Loan is similar to a VA or FHA home loan in that it is backed and insured by the government body of the United States Department of Agriculture. This program only works in areas that the USDA designates.
These programs were designed to attract people in more congested areas to move and keep the population counts high in rural areas. With cheaper costs than the cities surrounding them, they have become more and more popular as FHA requires 3.5% down for a purchase, and not everyone has a VA status to take part in VA home financing options.
When you are sifting through all your home loan options, applying for the loan that best fits your needs is essential. When considering the help of USDA Nationwide, that’s precisely what we will help you determine.
Operating like a well-oiled machine, our team has worked together for over 25 years. USDA Rural Home Loans are the go-to solution for countless Americans, making home buying possible for middle-income families in rural and suburban communities across the nation.
Established in 1991 by the US Department of Agriculture, USDA Rural Home Loans are one of the most competitive loan options in the marketplace. Because zero-down payments and interest rates are generally lower than your typical conventional loan options, working with a qualified and seasoned USDA lender is a must to help close your deal on time at your desired target rate.
Who Is Eligible For A USDA Loan?
Your USDA Loan Eligibility is mainly based on the geographical location of the home you are looking to purchase or currently own.
The USDA Rural Development Department publishes maps detailing areas where applicants can buy a house using a USDA loan. It’s as simple as putting in your property address and confirming you’re ready. Many find it surprising that nearly 97% of U.S. land is eligible for the USDA loan programs.
Besides the USDA rural property location requirement, an applicant must:
Meet the minimum USDA income eligibility.
Have no more than a maximum of 44% total debt ratio.
Meet a minimum score requirement of 640 with no mortgage delinquency.*
Occupy the dwelling as their primary residence; no second homes or rental investments are allowed with this program; however, we have other options that fit if required.
Be a U.S. citizen, foreign national, or qualified resident alien.
Purchase a safe, livable property that meets USDA guidelines.
Home buyers often opt for the more expensive FHA loan program, even in USDA-eligible areas. Consumers often don’t know this program exists or would apply to them. It pays to check USDA address eligibility maps if you buy in a suburban or rural area.
Choosing the USDA rural development loan saves the 3.5% down payment that FHA requires. And, now that reduced mortgage insurance fees are in effect, you’ll save money each month over FHA as long you hold the home and mortgage.
Getting you the right USDA loan.
Working with you side-by-side throughout the entire home loan process, we ensure you understand what’s happening at all times and that you’re confident in your decisions.
Bankers you can count on, true specialists who love & know USDA loans. You can rest assured that we keep your best interest in mind no matter how challenging the loan may seem. We take great pride in our ability to help make your home dreams come true.
Luckily for all of us, the USDA Rural Development Loan Program offers multiple programs such as the 100% USDA Purchase, the USDA Take-Out and Two-Time Close Construction Loan, and a great alternative to the USDA Repair Escrow Renovation.
Unfortunately, the USDA does not offer cash out on your home loan. However, you can lower your interest rate and possibly your mortgage insurance premium on the USDA streamline assist refi loans if you close your loan before October 1, 2016.
5 Star USDA Lender Reviews That WOW!
"Richie, OK... so you've officially done something I've never seen in 22+ years selling real estate. Closed a Loan on 224 Acres, with a Manufactured Home. CONGRATULATIONS! and THANK YOU!!! Admittedly, I was skeptical (more like pessimistic) when James told me you were going to get this Loan completed. And I had many doubts along the way, because I'd seen so many Lenders fall flat on their faces, just before the Closing. BUT... You got the Job DONE! Occasionally, I find someone out there who has done an Outstanding Job, helping my Clients... and You are one of these! I'm now officially a FAN of You and Your Work. I would be honored to promote you and your services to other Agents within our company, and I intend to do so. I will call you when I've caught up on my work a bit... and learn more about how I can do my job better on the next VA transaction." ~ Tom K. Licensed Realtor
USDA Upfront & Monthly Fees Lowered For Those With USDA Home Loans Closed Before October 2016.
It's now cheaper than ever to purchase or refinance your USDA Home.
Similar to an FHA Loan, the USDA has two types of mortgage insurance they require since they offer 100% financing: an upfront guarantee fee and a monthly fee. The “upfront guarantee” is the fee added to the loan on top of the purchase or refinance amount. The USDA’s loan backing fee allows lenders to issue loans according to its guidelines.
The upfront guarantee fee before the change was 2.75 percent of the loan amount; this was a substantial premium at the time. The “annual fee” was 0.50 percent, paid in twelve equal installments, which is included in each monthly mortgage payment.
October 1, 2016, the USDA upfront fee has been updated. (The Up-Front Premium & Annual Fee listed below is still in effect as of December 2, 2022.)
Former upfront fee: 2.75%
New upfront fee: 1.00%
The USDA mortgage premium also has been lowered.
Former annual fee: 0.50%
New annual fee: 0.35%
The changes will be effective from October 1, 2016, to September 30, 2017, and extend unless changed. Typically, the USDA reviews financials of previous fee changes annually and then raises, holds, or reduces fees accordingly.
Why Choose USDA Nationwide Rural Home Loans?
Ask this question first… Can you reach your normal bankers 7-days a week?
Most likely you can’t, and we know our clients love reaching us on their schedule, not making them conform to ours. That’s why the banker you work with also provides you with their personal and direct cell phone number to facilitate your questions and concerns when you need answers.
Google “home loans” and you’re instantly swamped by the vast number of options you run across. There are endless companies claiming to be able to qualify you for them, but not everyone does them or if they do, not everyone has closed one before.
It’s okay, we understand that this process can be confusing, but when you work with USDA Nationwide, you have a team of committed, direct bankers, processors, analysts, underwriters, and closers at your fingertips.
Once considered a ”farm loan”, USDA Rural Development Home Loans are the perfect loan for anyone looking to buy property outside of a major metropolitan area. Especially if that property you’re looking for is new construction, modular, to double-wide manufactured home. We love helping homeowners with unique properties and scenarios find the perfect loan for them.
If you think a USDA Rural Home Loan may be the right fit for you, ask yourself these simple questions first:
Is the home located in a qualifying rural or suburban town, with a population of less than 20,000?
Does the property have acreage?
Is it outside of any major city?
If you can answer yes to any of the above, consider what working with USDA Nationwide can do for you.
As a direct lender serving all 50 states, we bring you competitive rates, and programs backed and supported by the U.S. government. We bring the big-bank reach to the small banker feel.
Working directly with our lender, not some middle man, we’ll help you from start to finish. From the initial consultation to underwriting and closing, you can count on USDA Nationwide to be there for you. From single-family modular homes to manufactured properties, and construction loan options, we have your USDA Rural Home Loan covered. Contact us today at 1-844-999-0639 or apply online.
How much Do You Qualify For?
We Work Hard To Obtain Your Dream Loan, For Your Dream Home!
We have over 25 years working together as a team, and over 100 years combined experience as an A+ rated FDIC bank helping our clients get competitive, low fixed-rate mortgages. By pre-approving you for your maximum amount to start, we work to get you a mostly underwritten loan approval, possibly even before you have a home picked out. We also promise to never spam you, sell your information, bombard you with robocalls, or provide anything but a clear, transparent conversation, from start to close.
TOUGH LOANS DON'T SCARE US, Not USDA, Nor Do Any Of The Hundreds Of Loan Programs We Have Available!
Aside from USDA Home Loans, we offer so many options. From Construction To Bridge Loans, Down Payment Assistance Programs, Doctor Loans, Veterinarian Loans, Nurse Practitioner Loans, First Responder Loans, Foreign National, ITIN, and Extensive Renovation Projects, even Manufactured Homes, each loan is as unique as the home! Treating our customers with extreme care and attention to detail, we can’t wait to serve you. We’re solution-oriented, efficiency-motivated, and highly skilled bankers working for you; let us help you today!