Savings

$0 Down Home Loans

For many home buyers, saving the funds for a down payment is the largest obstacle to homeownership. Between monthly expenses, retirement funds and emergency funds, among others, being able to build the funds needed for a down payment ranging up to 20 percent can be nearly impossible.

Fortunately, the USDA Rural Housing Loan – or USDA Loan – allows homebuyers to purchase the home of their dreams without the need for a down payment.

The continuation of this incredible benefit is the result of USDA homebuyers partially funding the program through the USDA insurance fee. This mortgage insurance premium is similar to that of the FHA Loan, but is much less expensive.

The USDA charges 2.75% of the home’s price upfront, which can be rolled into the entire loan amount, and an additional .50% of the principle yearly over the life of the loan. Conversely, FHA Loans charge 1.75% upfront, and an additional 1.55% in mortgage insurance yearly.

To see the savings, let’s take a $100,000 mortgage and apply each. With the USDA Loan, a homebuyer would have to pay $2,000 upfront (which can be financed into the loan) and an additional $33.33 a month, decreasing with the principle of the loan.

Now, with the FHA Loan, a borrower would have to pay $1,750 upfront, but an additional 129.16 a month over the life of the loan.

Getting Started with a USDA Rural Development Home Loan

To get started with your USDA $0 down home loan, fill out this form. After filling out our short 2 minute form, a USDA Loan expert will be in contact to help you take your first steps to becoming a homeowner.