USDA Loan Benefits

USDA Rural Housing Loans are one of the most powerful mortgage options available to rural and suburban homebuyers. This USDA-backed mortgage option comes with benefits that are not found in any other mortgage option, opening the doors of homeownership to many that may not have qualified with other major mortgage options.

Since every USDA Loan is guaranteed by the federal government, lenders are more willing to provide benefits that include:

No Down Payment

Don’t let high down payment requirements crush your dream. Most mortgage products require some type of down payment, sometimes reaching as high as 20 percent. In today’s economy, saving for even a 5% down payment can be a struggle, delaying your ability to purchase a home.

Lenient Credit Requirements

With the USDA Rural Housing Loan, there are no credit requirements. Lenders do prefer a credit score of 620 or better, but lower may qualify. Additionally, those with no credit or non-traditional credit may qualify if they show willingness to repay their debts.

No Max Loan Amount

Although borrowers have to fall within the USDA income limits to qualify for a loan, there is no maximum purchase price; only the requirement is that housing must be modest in size. And, after a review of a borrower’s income and existing debt, lenders determine loan amounts based on the borrower’s ability to repay.

Closing Costs Assistance

Closing costs range between 2% and 5% of the purchase price – another big expense when buying a house. With a USDA loan, the seller can pay your closing costs, or you can ask your lender to include closing costs in your mortgage loan. Closing costs can be financed up to the appraised value of the home. Additionally, gift funds can be used to pay closing costs.