USDA or Rural Housing Loans

USDA or Rural Housing Loans

USDA loans are made on properties within a qualifying rural area. USDA is the agency that offers the loan program. Rural Development (or RD) is the name of the product offered and is sometimes referred to as Farm Loans. The property must be located in a USDA qualifying area which can be found using the USDA website.

Applicants with very low to moderate incomes typically can qualify for these loans but must meet a strict Debt-to-income ratio requirement, along with a residual income qualification (Money left over after all debts are paid monthly). There are income and asset requirements. The total household income of adult members is considered as well as any children, or disabled persons in the home.

USDA loans require an upfront guarantee fee and an annual guarantee fee, similar to upfront mortgage insurance (UFMIP) and monthly mortgage insurance (MIP) for FHA loans. These guarantee fees are generally lower than mortgage insurance premiums for FHA.

Other Facts of a USDA Loan

  • Available to those with lower incomes and good credit histories.
  • No required down payment.
  • New Manufactured homes are acceptable as long as conditions are met.
  • Available in 30-year or 15-year fixed rates.
  • A minimum credit score of 620
  • Debt-to-Income ratio requirements are more conservative than FHA, Conventional, and VA Products
  • Closing costs and lender fees can be rolled into the loan.
  • Renovation and Repair costs can be rolled into the loan amount.
  • The property doesn’t have to be a farm or open land to qualify for this type of loan. It just has to be in a qualifying area.
  • Non-occupied borrowers are allowed
  • You cannot own more than one property with a USDA loan
  • You can own vacant land and commercial property

Apply Now

Whether you are looking to purchase a home, or refinance an existing mortgage, apply online today.

Have a Question?

If you have any questions or concerns about what we provide, please fill out the form below and we would be happy to help you!